KG Mobility will cooperate with Kim Long Motors to distribute and assemble cars with a goal of 210,000 cars and a revenue of 4.6 billion USD.
In mid-November, the Korean automobile manufacturer KG Mobility had a meeting to discuss plans to expand cooperation with Vietnamese automobile manufacturer Kim Long Motors by assembling and manufacturing KG Mobility cars in Vietnam.
The two sides reached a consensus on cooperation at this week's meeting at the Vietnamese enterprise's factory in Thua Thien-Hue province. They also checked the progress of the KG Mobility factory that Kim Long Motors is building in the Chan May-Lang Co Economic Zone.
In March 2023, in KG Mobility's announcement about signing an agreement with Kim Long, KG Mobility said the goal is to achieve annual output at the factory of 15,000 cars in 2024 and 60,000 cars in 2029, with a maximum of 210,000 cars by the end of 2029 and revenue up to 4.6 billion USD. These models include the Tivoli, Korando, and Torres from 2024 and the Rexton and Rexton Sports Khan from 2025.
The two companies also discussed plans to bring Torres EVX and KGMC, newly launched electric buses in Korea, to Vietnam.
This cooperation is an expansion of the agreement signed between KG Mobility and Kim Long Motors in March to export knock-down (KD) cars to Vietnam for further assembly. This is KG Mobility's first global operation since changing its name from SsangYong Motor.
KG Mobility was established in 1954 in Korea under the original name Dong-A Motor, specializing in manufacturing personal and commercial cars. This car company is present worldwide, except for the US and Japanese markets.
After being acquired by Ssangyong Business Group, Dong-A Motor changed its name to resemble the parent company and began to cooperate with major car manufacturers. In 1991, Ssangyong and Daimler cooperated on technology, allowing the Korean automaker to gain a presence in many new markets without having to build infrastructure. This combination gave birth to the Musso car sold by both Mercedes-Benz and Ssangyong.
Ssangyong was continuously sold to other companies in subsequent periods, with the owners being Daewoo (1997), SAIC - China's largest state-owned car manufacturer (2004), and Mahindra - an automobile manufacturing enterprise (2011).
Financial difficulties constantly forced the Korean automaker to sell itself, and only after Mahindra became the owner did the company begin to get back on track.
In 2015, Ssangyong launched the Tivoli, and just a year later, they made a profit for the first time after 9 years of losses. 50,000 Tivoli cars out of nearly 107,000 cars sold in 2017 showed the importance of this car type in the company's strategy.
This is also the largest number that Ssangyong has achieved since 2003, when they sold more than 130,000 cars in that year. Also that year, the Korean car company also sold its best-selling models, such as the Rexton or Tivoli, in Vietnam, but did not achieve positive results and had to withdraw after more than a year.
In the following years, the financial situation of this car company was not good. In 2019, Ssangyong sold over 135,000 cars globally (decreasing by 6% compared to the previous year, of which the number of cars sold in the non-Korean market decreased by 20%), causing their revenue to decline sharply and leading to losses.
In 2020, SsangYong filed for bankruptcy in a Korean court because it could not repay a 54.4 million USD loan.
The company had to sell itself once again, with Edison Motors as its partner; however, this transaction failed due to payment problems. Therefore, under the choice of the Seoul Bankruptcy Court, the KG Group was appointed as an investor to take over Ssangyong to restructure this car company in 2022. The transfer was officially completed in last November after receiving court approval.
Before the KG Group took over, the number of cars that Ssangyong sold in 2022 had a great improvement, especially in the international market with the number nearly doubling compared to 2021. The company's losses also improved significantly, from 265 billion KRW (204 million USD) to only about 60 billion KRW (46 million USD). Ssangyong is expected to recreate the miracle it once did after being acquired by Mahindra.
The number of cars sold by Ssangyong before changing its name to KG Mobility (Cre: KG Mobility)
Since March 2023, the company officially changed its name to KG Mobility and intended to completely remove the name Ssangyong to avoid the current relatively negative brand recognition. Besides, the company has also taken strategic steps to expand its business market, including returning to the Vietnamese market.
As a market with great potential, it is understandable why Vietnam has received so much attention from this Korean car company. The meeting to plan specifically for production is an affirmation of the plan in Vietnam.