Pressure’s on for Ssangyong to duplicate success of TivoliSsangyong Motor made a dramatic rebound last year on the strength of one brand-new car, the Tivoli. With the success of the small SUV, the nation’s smallest automaker has built a foundation for the recovery of its reputation as a decent SUV maker. But the future of Ssangyong is still uncertain, as it won’t be easy to find another growth engine capable of powering the company’s continued rise.
According to Ssangyong on Monday, it had sold a total of 144,764 cars last year, a 2.6 percent rise from a year ago. The growth doesn’t seem huge at first, but that changes when the focus is narrowed to just the domestic market. In Korea, Ssangyong sold 99,664 cars last year, a 44.4 percent rise year on year and the highest among the five local automakers - including Hyundai Motor and Kia Motors.
The success was all thanks to the Tivoli, which accounted for 45.1 percent of the automaker’s domestic sales last year. Adding up the 45,021 units sold in Korea and 18,672 in the global market, Tivoli became the automaker’s best-selling car after the Rexton SUV, of which the automaker sold 54,274 units in 2004.
“It was all about the Tivoli last year,” Ssangyong CEO Choi Johng-sik said in a statement on Monday. “With the Tivoli, Ssangyong sales have hit the highest in 12 years in the country.”
The year was also meaningful for Ssangyong, as the company and its labor union eventually decided to rehire, in stages, about 1,600 workers that had been laid off. Anand Mahindra, chairman of Mahindra Group, the major shareholder of the automaker, had said early last year that he would consider a rehire if Ssangyong’s sales improved and it looks like he wants to keep his word, though the company has yet to decide how many people it will bring back in the first round.
In 2009, the automaker laid off a total of 2,614 workers due to financial hardships.
Increasing the number of production workers is clearly a good sign, but concerns remain because the company has yet to announce a specific item that could boost this year’s sales as the Tivoli did last year.
“It is true that besides the Tivoli’s long body model [expected to be rolled out in the first quarter], there is no new car scheduled to meet consumers this year,” a spokesman of Ssangyong said.
It seems like the key to maintaining sales growth for Ssangyong is the export market, in which the automaker has much room to improve.
Total sales in the global market in 2015 dropped 37.4 percent year on year, from 72,011 to 45,100. The nightmare began after the value of the Russian ruble and currencies of other emerging markets plunged in 2015. After seeing the Russian economy worsen, the automaker decided to bow out of the market, but it hasn’t successfully expanded its sales in other countries to make up for the losses it accrued as a result.
In 2013, the Russian market accounted for 41.5 percent of Ssangyong’s global sales, and it was also the biggest market last year, as 33.5 percent of the company’s overseas sales were made there.
As part of its work to expand its sales territory overseas, Ssangyong appointed Choi, known as an expert in exports, as the head of the company last year. After joining Ssangyong in 2010, he worked as the global marketing director before being promoted as chief of sales next year. He was in charge of the Tivoli’s launch in Western Europe and China before being named CEO in March last year.
The company has rolled out the Tivoli in global markets, including China, but it hasn’t been successful there yet due to the slumping economy, and sales in Europe - the region that should make up for the losses generated in Russia - are not big enough. Still, the company expects the Tivoli, which the automaker started selling in export markets from the second half, will continue to grow.
“At this point, it looks like Ssangyong needs little help from investors,” an analyst at a financial institution said on the condition of anonymity. “Ssangyong proved that it has the ability to make a decent car and is finally free from the biggest headache [the rehiring issue], and it looks like it is time for investors to show that they truly want to make the company grow more.”
BY KWON SANG-SOO [email@example.com]
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