Tivoli sparks a turnaround dream
“If the Korando C was our very last hope while the company was in a financial hardship, we consider the Tivoli a last chance given by consumers who have been looking for Ssangyong’s revival,” said Ha Kwang-yong, an executive director in charge of production. “It is the car that will save the company’s reputation as a decent SUV maker.”
The Tivoli production line in Pyeongtaek, Gyeonggi, has a hopeful spirit. Employees work briskly and confidently. A total of 150 machines look like Dummy, the robotic assistant to Tony Stark in the “Iron Man” series, move from side to side and even shoot flames to weld car plates.
The sound of workers tightening screws with automatic hand tools was all around.
The No. 1 assembly line, which produces both the Tivoli and Korando C SUVs, is operating on a double-shift system, 24 hours a day, six days a week, excluding Wednesday. The line produces 19 cars per hour.
The company sold 69,036 vehicles last year in Korea, a 7 percent rise from a year earlier and the most since 2005, when it sold 73,543 cars. With the Tivoli leading sales, the company expects to break that number this year. Since it was introduced in January, the Tivoli has had a tough battle against Hyundai Motor’s new Tucson and Renault Samsung’s QM3 in the small-size, or B-segment, SUV market.
A total of 11,457 Tivolis were sold through the first quarter and more than 5,000 customers are waiting for deliveries. The Tivoli continued to lead the company’s sales in April as the company sold more than 8,000 cars that month in Korea, a 35.3 percent rise from a year ago.
The company says its good fortune is partly the result of Ssangyong having no dispute with its union over wage negotiations for the past five years. The company also unveiled a new plan for Tivoli. It will start exporting a diesel Tivoli in June and introducing the diesel model in Korea in July. Currently there’s only a gasoline engine Tivoli.
“We’re testing a Tivoli diesel that satisfies the Euro 6 standard,” said Ha, the production director. “Since local consumers are more sensitive to fuel efficiency and noise issues, we are checking to see if there is anything more to improve. The diesel model will offer better fuel efficiency than GM Korea’s Trax.”
Fuel efficiency for the Trax gasoline model is 12.2 kilometers per liter (28.7 miles per gallon) and it is expected to be around 14 kilometers per liter for a diesel model to be introduced to the market in the second half of the year.
Ssangyong Motor wants to expand its global market share with Tivoli. The company shipped 2,000 units in March to Belgium, the U.K., Spain, Italy, Chile and Peru, and actual selling will begin in June. The company predicts exports of 25,000 Tivolis to the global market in the future, including 13,500 units for Europe, the primary export market for the company. Ssangyong previously relied on the Russian market. More than 30 percent of the company’s exports last year were to Russia, some 20,000 cars. But sales to Russia have collapsed because of the devaluation of the rubble.
“In order to become a global leading automaker, we need to increase our sales in foreign markets,” said Ssangyong Motor CEO Choi Johng-sik when he met reporters at April’s Seoul Motor Show. “We aim to sell 100,000 cars in the domestic market and 150,000 units in the global market in the future. Europe is a good market as it is more stable both economically and politically than Russia.”
The company added that it will try to promote the Tivoli as a premium SUV in China in cooperation with Pangda Automobile, the company’s sales network in China. The Chinese B-segment SUV market grew by 90 percent last year from a year earlier in terms of production, and total SUV production is expected to grow by 22.5 percent this year from last year. Ssangyong Motor aims to sell 15,000 cars including 5,000 units of the Tivoli this year in China, which will be a 20 percent rise from 2014.
In order to target the U.S. market, the biggest auto market in the world, the company unveiled the concept car XAV, which uses the same body platform of the Tivoli, at the Seoul Motor Show in April. CEO Choi said the company was considering developing the XAV for the U.S. market. A total of 5.75 million SUVs were sold last year in the country, up from 5.12 million units in 2013.
With oil prices down, global automakers are expected to increase their investment in SUVs. GM, for instance, is expected to spend $1.3 billion to expand production capacity in Texas to meet growing consumer demand. As part of the global expansion, Ssangyong is also considering changing the company’s name to something foreigners can remember more easily. The company said that plan won’t be realized soon as it will cost $100 million.
Some work remains at the Pyeongtaek plant. The No. 2 and No. 3 assembly lines, which make the Chairman sedan and Rexton and Actyon SUVs, are not fully operating. Only 19 percent of the No. 2 line is operating and 55 percent of the No. 3 line.
BY KWON SANG-SOO [firstname.lastname@example.org]
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