SsangYong has confessed that addressing the mistakes made by its past Australian distributorships will be key to ensuring the South Korean brand does not again fail locally.
A global minnow that was bailed out of bankruptcy by Indian giant Mahindra, SsangYong sold SUVs, utes and the odd sedan and people mover here in the late 1990s, then between 2005 and 2016, through a third-party distributor.
Now, Australia becomes the first country outside South Korea to sell SsangYong via a factory-owned office. From local annual sales of 2645 units in 2005, it kept in the 2000-unit bracket for two years but never returned to that high, with 1507 sales in 2013, 1000 in 2015 and 371 in 2016.
However, SsangYong managing director of exports Sanjeev Saksena explained that, given Australia’s love of SUVs and utes, the time was right for the South Korean brand to return and address past errors even if it meant forgoing short-term profits and sales to build the brand.
“We did not spend a lot on marketing because in the past we expected the distributor to spend a lot on marketing, and [now] we are correcting that,” Saksena said in an interview at the brand’s headquarters outside of Seoul.
“These things [marketing] are long-term investments which the distributor cannot undertake, so the factory is going to do it, and that is why we are going to ensure the marketing is good, which will ensure that the product information reaches the right target.
“If we get into the market with low prices, which is what everybody is expecting, then you start from [a low base] and then the resale value also drops. That is where the problem is also. Our experience with Ateco [Automotive – former third-party distributor] was that for certain products … the price kept getting reduced, and they cut the price and cut the price, and so that that product became cheap.
“So we might have to sacrifice the short-term to ensure that the long-term is good.”
Indeed Saksena suggested that SsangYong products would be “up to 7 per cent” cheaper than mainstream rivals, including the Mazda CX-3-challenging Tivoli, Ford Everest-rivalling Rexton and Mitsubishi Triton-baiting Musso dual cab.
Saksena also insisted that SsangYong has looked after its customers with warranty and servicing support in the two years since it last had a retail presence, while “20-plus” of its existing dealerships had been in a holding pattern awaiting to re-sign with the factory outfit – although he also admitted that some customers may have been burnt by resale values.
“We have not deceived our customers, we have looked after them and so, in that sense, to say that we left the market is not okay,” he continued.
“Our dealers have been engaged in the market, it’s not like it was a big farewell and now we are coming back after two years.
“We have never conveyed in the market that we are not coming back, so in the case customers sold SsangYong vehicles in the past two years, perhaps some of them would definitely have got affected [by resale value].
“But those who are continuing to hold on, definitely the after-sales processes [will be] addressing the resale value.”
Newly appointed SsangYong Australia managing director Tim Smith added that the newest range of models are good enough to both build the brand and increase dealers in future, while customers will be supported by a strong warranty and local suspension tuning program – the details of which, however, have not yet been confirmed.
“Our dealer network and the products will be doing all our heavy lifting,” he said.
“But we also want to be comprehensive. Our offer to the market will be comprehensive: strong warranty, local tuning. Everyone wants to be the best [with warranty] but there’s got to be the right balance, you don’t want to make it ridiculously expensive to operate.
“We will be doing everything in our power ensuring products, franchise offering and customer service will be as good and better than our competition. We certainly think we’ve learnt a lot from previous experiences and distributors in Australia. We would love to offer our brand as a real alternative to our competitors [and] that has to be balanced by infrastructure, resources, investment and profitability.
“But we’re not going away, we’re here for the long term.”
SsangYong re-launches in Australia in November 2018 and it will target annual sales in line with its 2011 figure of 1700 units.