Ssangyong to Produce S-100 Model in Chinese Plant Next Year

SHANGHAI - October 29, 2007:

Ssangyong Motors' new plant in Yizheng, Jiangsu Province, will start volume production early next year and its first car will roll off the production line by next April, China's Nanfang Daily (Guangdong-based newspaper) reported today.

Code-named S100, the first car to be made at Yizheng plant is a redesigned Kyron model made by Ssangyong, a Korean company controlled by Chinese automaker Shanghai Auto Industry Corp (SAIC), according to the report.

Ssangyong and SAIC had reached an agreement in 2005 to open a 50:50 joint venture in China to develop SAIC's own brand vehicles, but the plan was postponed due to a union strike last year at Ssangyong, where workers worried that SAIC may finally move Ssangyong's production to China.

SAIC said now that it owns the intellectual property rights of both Ssangyong and MG Rover, it expects the new plant will make Ssangyang more competitive globally by reducing production costs.

An auto industry analyst said that when the S100 starts production in China, its cost will be cut by 30 percent to 40 percent due to lower auto parts import tariff and lower costs of Chinese-made auto parts.

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