SNAM CEO Dr. Fahd S. Al-Dohish and Ssangyong Motor CEO Choi Johng-sik shake hands after signing a product licensing agreement in Seoul Friday. [Photo: Ssangyong Motor Co.]
Ssangyong Motor Co., South Korean unit of India’s Mahindra & Mahindra Ltd., is venturing into the Middle East by granting a local firm a license to assemble and ship its vehicles in Saudi Arabia from 2020.
Ssangyong Motor said Monday it signed a product licensing agreement with Saudi National Automobile Manufacturing Co. (SNAM) last Friday to allow the Saudi firm to manufacture its new premium pickup truck codenamed Q200 in the country starting 2020. SNAM plans to boost the annual capacity to 25,000 units later. Ssangyong Motor expects the latest deal would benefit its Korean suppliers as the deal would involve an auto cluster for tier 1 auto part suppliers in Jubail, an industrial city in Saudi Arabia.
SNAM, an automotive affiliate of Saudi Arabia’s Safari Group, was founded with a long-term plan to foster the country’s automotive industry under the tagline of “Saudi Vision 2030.” SNAM already secured land totaling 1 million square meters in Jubail to build an auto manufacturing plant and an additional site of the same size for local suppliers.
“This product licensing agreement with SNAM will give us a foothold in the region to boost global sales and growth,” Ssanyong Motor chief executive Choi Johng-sik said in a statement. He added the deal will also help suppliers to tap into overseas opportunities.
Ssangyong Motor previously posted record revenue of 3.63 trillion won ($3.2 billion) last year with a dramatic turnaround for the first time in nine years, mainly driven by upbeat sales of its flagship compact sport utility vehicle (SUV) Tivoli in Korea. The automaker, however, suffers from a setback overseas due to a lack of demand in emerging markets such as Russia and tough competition from Chinese rivals.
Ssangyong Motor said it pins high hopes on the latest deal and it will accelerate efforts to expand global sales.
By Park Chang-young
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