Korean carmakers fighting back with small SUVs

Local automakers, which had a hard time last year due to aggressive market expansion by foreign brands, are preparing a counterattack. Their weapon of choice? Small SUVs.
Last year, total SUV sales by Korea’s five automakers totaled 337,755 vehicles, breaking the previous record of 297,000 in 2002. In the SUV market, small SUVs accounted for only 18 percent of overall sales in 2008, compared to 30 percent last year.
The surge in market share was led by Renault Samsung’s QM3, with sales of 18,191 units last year. Now, other automakers are looking for a piece of the SUV pie by rolling out new models, starting with Ssangyong Motor.
Ssangyong, part of India’s Mahindra Group, started selling the compact Tivoli after a launch event Tuesday at Dongdaemun Design Plaza in central Seoul. It is the company’s first new vehicle since the Korando C SUV in 2010, and also the first since the company was acquired by Mahindra.
Its launch attracted considerable attention in the industry and the press, with the event drawing about 800 guests and VIPs, including Yoon Sang-jick, the minister of trade, industry and energy, and Mahindra Chairman Anand Mahindra.
“The Tivoli marks a significant new milestone in the growing partnership between Mahindra and Ssangyong,” said Mahindra. “This new SUV emphasizes Ssanyong’s great legacy of innovation in product development. We are confident the Tivoli is poised to drive Ssangyong’s growth.”
The company said it invested 350 billion won ($323 million) over 42 months to develop the vehicle.
“Tivoli is a strategic global model that SSangyong has developed with great devotion,” said Ssangyong CEO Lee Yoo-il. “As Ssangyong’s first compact SUV with a 1.6-liter engine and on a platform that will achieve 100,000 units of annual production, Tivoli will be a solid driver for the company’s turnaround and development strategy. We will also introduce the vehicle’s diesel engine and long-body model to target the global market later this year.”
Its most significant technological feature is its new power train that took three years to develop. The e-XGi 160 provides 126 horsepower and a maximum torque of 16 kilogram/meter. The fuel efficiency for the automatic transmission model is 12 kilometers per liter (33.9 miles per gallon) and 12.3 kilometers per liter for manual transmission.
“We expect to sell 38,500 Tivolis this year,” said Lee. “Globally, we are preparing to export the model to China in April, but our ultimate target market is the United States.”
Tivoli is expected to compete with Renault-Samsung’s QM3, which was introduced in December 2013. Considering that Tivoli’s price is 2 million won to 4 million won less, industry insiders say competition between the two models will be intense.
Joining the competition, Hyundai Motor will introduce the Tucson TL in March, a makeover of the second-generation Tucson ix introduced in 2009. Sources say the vehicle might have a 1.6-liter engine for better fuel economy.

BY KWON SANG-SOO [sakwon80@joongang.co.kr]