Ssangyong Motor Co. is launching a new car for the first time in four years, as the South Korean car maker seeks to strengthen its foothold in the country’s thriving sport utility-vehicle market.
The South Korean unit of India’s Mahindra & Mahindra Ltd. plans to launch the Tivoli, named after an Italian resort city, in January to compete with brands like General Motors Co. ’s Buick Encore and Chevy Trax, and Renault Samsung Motors’ QM3 crossovers.
Ssangyong, which holds a fifth of the domestic SUV market, hopes its latest model will secure its place in the compact crossover segment, which has grown in recent years given its better mileage than larger vehicles. About a third of some 95,000 new cars sold in Korea in September were SUVS, according to the Korean Automobile Manufacturers’ Association.
The Tivoli, with a 1.6-liter gasoline-powered engine, will be part of Ssangyong’s popular Korando C model lineup, which has a 2-liter diesel engine. Ssangyong also plans to launch a diesel-powered Tivoli model in the second half of next year.
Growing demand for the Korando Sports model helped lift Ssangyong’s domestic sales 6% in the third quarter, while the company’s overall sales fell 8% to 767.8 billion won ($692 million) as a stronger local currency hurt exports.
Tivoli’s launch comes as Ssangyong and local peers are losing ground to imported foreign brands such as BMW AG and Daimler AG’s Mercedes-Benz, which have gained appeal among South Korea’s consumers.
Foreign car makers have more than doubled their sales over the past five years and currently account for a record 15% of the local market, up sharply from 2% just a decade ago.
Tivoli sales in key Chinese and European markets could start as soon as April, according to company officials. Ssangyong, whose exports comprise half of the company’s total revenue, aims to increase sales in emerging markets including Russia, China and Latin America, where an affluent middle class and poor road quality result in a strong market for SUVs.
The company also intends to enter the U.S. market within the next three years or so under a new name. Critics and company officials have said the name Ssangyong, which means “double dragons” in Korean, is hard to pronounce, especially for non-Korean speakers, and has sometimes been mistaken for being Chinese in origin.
Since it was established in 1954, the auto maker has changed hands several times: China’s Shanghai Automotive Industry Corp. owned the company until its current Indian owner took over in 2010.
The present name was adopted in 1986 when it was incorporated into the Ssangyong Group, a conglomerate that specialized in construction, shipping and telecommunications before it dissolved in the wake of the Asian financial crisis of the 1990s.