(Bloomberg) -- Mahindra & Mahindra Ltd., the preferred bidder for Ssangyong Motor Co., said the South Korean automaker may introduce as many as three models within four years in a bid to return to profit.
Ssangyong will develop the vehicles based on designs that it hasn’t yet used, said Pawan Goenka, president of Mahindra’s automotive and farm equipment division. The Mumbai-based company may also build Ssangyong models in India, he said in an interview at his office yesterday.
“The easy part is buying the company,” Goenka said. “The more difficult part is turning it around.”
The Indian automaker may also use Ssangyong engines in pickups it plans to sell in the United States as the company works to pare its reliance on domestic sales. Mahindra agreed to buy the Korean sport-utility vehicle maker last month to access technology and an international dealer network.
“One big thrust for us is to become more global than we are,” Goenka said. “Ssangyong fits into that.”
Developing new models in South Korea will cost more than in India, Goenka said. Mahindra spends about 8 billion rupees ($172 million) to develop a vehicle in India, he said.
Mahindra aims to complete the acquisition of a controlling stake in Ssangyong by end of the year, Goenka said. The Pyeongtaek, South Korea-based automaker, previously controlled by SAIC Motor Corp., China’s biggest carmaker, entered court protection from creditors in February 2009 after losses caused by plunging SUV sales.
Rexton, Korando C
The Ssangyong models that may be built in India could include Rexton and Korando C SUVs, Goenka said, without specifying a timeframe.
Mahindra rose 0.8 percent in Mumbai trading to close at 676.1 rupees, the highest since at least January 1991. The stock has gained 25 percent this year, compared with the benchmark Sensitive Index’s 12 percent advance. Ssangyong fell 1.1 percent to 8,380 won in Seoul.
Ssangyong plans to export about 10,000 Korando C SUVs this year, South Korea’s smallest carmaker said in an e-mailed statement today. The company has shipped about 450 of the vehicles, its first new model in more than two and a half years, to western Europe, it said.
Mahindra said last month that had it won approval from the U.S. Environmental Protection Agency to begin pickup sales. Goenka declined to comment on when U.S. sales will begin, citing a pending lawsuit filed by a Georgia dealer in June.
Global Vehicles USA Inc. said in its lawsuit that Mahindra breached a 2006 agreement by twice rejecting its purchase orders for the company’s vehicles.