Mahindra, SsangYong to launch jointly developed engine in 2015

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GREATER NOIDA, India, (Reuters) -- Mahindra and Mahindra, India's largest SUV maker, and subsidiary SsangYong Motor Co. will launch their first jointly developed engine in the first quarter of 2015, a senior executive of the Indian company said.

The South Korean company, which Mahindra acquired in 2011, will use the engine in its X100 compact SUV to be launched next year, Pawan Goenka, president of Mahindra's automotive and farm equipment sectors, said on Thursday.

"Mahindra most likely will have a ... version of it on that [X100] platform," he said. "There are future products that we will collaborate on where a common platform either of Mahindra or SsangYong could potentially be used for both."

He expects the two companies to eventually produce six engines, which will include gasoline and diesel variants.

Mahindra also will roll out two of its own compact SUVs and a commercial vehicle in 2015, he said. The company has no plans to launch any passenger vehicles this year.

Small SUVs, such as Ford Motor Co.'s EcoSport and Renault's Duster, have remained one of the few bright spots in a local auto market that is bracing for weak demand on the back of a slowing economy, combined with high interest rates and fuel costs.

Mahindra has seen demand for its SUVs fall about 17 percent in April-December, industry data shows. However, strong sales of tractors in the domestic and overseas markets such as China and the United States have more than offset that, helping profits grow in the first two quarters of this year.

The company, which scrapped plans to sell a pickup truck in the United States in 2012, is looking to enter the country's passenger vehicle market through SsangYong, though Goenka, who is the Korean company's chairman, said it could take at least two to three years for SsangYong to enter the U.S. market.

He said SsangYong is focusing on strengthening its position in western Europe and China. He forecasts sales volume in China to double in 2014 from last year's 6,300. SsangYong sold 36,000 vehicles in Russia, its biggest market, last year.

"China certainly has the potential to overtake Russia for SsangYong," he said.

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