With a slew of new dealerships begun and ambitions to increase new sales tenfold in 2012, SsangYong Motor UK is aiming high at a time when many manufacturers are just crawling out of a collective credit crisis hangover. CEO Paul Williams talks to Richard Brown.
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Korean brand SsangYong is a relative newcomer to the UK market, only trading under the name since 1987 and having its assets taken over in 2007 by Koelliker UK, of which Williams was a part, with an aim to distribute.
Re-launch of the marque was planned for 2008 but thwarted by what Williams admits was "a tough year". The rearranged re-launch was again halted when SsangYong Motor Company in Korea filed for bankruptcy protection.
"Obviously, that put a spanner in the works of our ongoing development," says Williams with equal understatement.
Williams initiated a holding position until SsangYong in Korea was bought out by Indian manufacturer Mahindra & Mahindra in 2011. The new owners were keen to re-launch in global markets and Williams facilitated the transfer of UK interests from Koelliker, mainly an Italian concern, to The Bassadone Automotive Group based in Gibraltar.
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By GlobalDataThe company was renamed SsangYong Motor UK and Williams took on an expanded workforce including Steve Gray from Chrysler Jeep nominally as marketing communications director but crucially as Williams senior and strategic wingman.
"Basically, we reorganised, re-established and basically set out our stall to be able to launch the new Korando, which we did in September of last year.
"We got our dealers together, had a dealer demo, drive-away day, and in the back end of the year we got everything organised to kick off in earnest in 2012."
The unknown brand
That kick off has seen a rapid rejuvenation of SsangYongs UK dealer network, including new liveries for 15 outlets. Seven new dealerships have been recruited since the start of the year, from Wolverhampton to Strabane, taking the total (at time of press) to 51, with up to 11 more prospects to be decided by the end of April.
"Were pretty confident that, going into quarter two, well be up to 60 sales points," enthuses Williams. "On a long-term basis we expect to get to between 70 and 80 dealers. That will take us time and will be driven by the pace with which we introduce new models.
"It gives us geographical coverage, a basic thing that you have to have, it also gives customers confidence that theyre dealing with a brand that is going to be around."
Williams emphasises that, despite the rampant expansion, he wants to take his time to find the right people, with the right attitude and approach.
"It isnt necessarily down to having the best location or being in Motor Alley. What we tend to find with the small franchise is down to how much the individual has got an appetite for doing business with a small company.
"Often people will buy an unknown brand or a developing brand from an individual, not necessarily from a big company."
Williams is also cautious to avoid tipping what he calls "critical mass" of forecourt development.
"Its always a balance with dealer headcount. Youve got to have enough dealers to give customers confidence that, if theres a problem, theyre going to get their vehicle fixed, but not too many that it doesnt detract from dealers wanting to represent your franchise."
The multiplying presence of SsangYong showrooms in the UK is part of what Williams sees as making people both "confident" and "aware" of the brand and, for him, the balance comes down to dealer numbers versus profitability, or simply "too many dealers chasing too little business."
Not homogenised but perfectly formed
Referring to "little" business and "small" franchises, Williams is happy, almost pugnacious, about the size and purpose of SsangYong, which only manufactures SUVs and luxury sedans.
"Were never going to be a player thats seen on every street.
"As a distribution business, were quite happy with that because that gives us a relatively manageable product portfolio."
Williams conviction to sell 2,500 new units in the UK this year may seem like a lot of work for a tiny slice of a national market of 1.9m new registrations but his confidence, again, is based on being particular.
"Most importantly, were in the strongly-growing crossover market with the Korando, which competes against the Nissan Qashqai, Hyundai ix35, Kia Sportage and Ford Kuga. Which is the right area market to be in if you wanted to develop a niche brand.
"Were not trying to push a homogenised product into a mass market which will only then be sustainable on price. Youve got more opportunity to develop a small, bespoke, relatively profitable business."
300
While SsangYong outlets may be on a phenomenal rise, new car sales have begun in the muted manner the brand is more used to, selling 43 units in January and 19 in February.
Williams, however, predicts 300 sales in March and says the first two months sales are in line with predictions for the year.
"We expect that our sales, our market penetration during the year will increase as we get more dealers, as the product gets better known.
"The finance programme and promotion that were currently doing, supported by a TV campaign, didnt come in to public domain until February. So were starting to see, in March, the benefits of all that hard work. Hence a step change in numbers."
Williams is predicting 400 cars in the first quarter with a sales rate increase across the year, particularly in quarters two and three and the arrival of the Korando Sport model in July.
Of the 2,500 unit sales predicted by Williams in 2012, 1,600 will be Korandos, and the rest will be Rexton and Rodius models, a mix that makes Williams confident that GMAC will see good business from the brand.
"Korando is attracting more finance by virtue of the sector it operates in. Its a retail-orientated car and its stacked up against Sportage and ix35."
For Williams and his team, sinking money and effort in to new dealerships and television advertising and armed with a big-name finance partnership, this year is the start of a strategy based on the SsangYong models that extends at least a further two years.
"The XIV-2 was shown as a concept at Frankfurt last year and the next development was shown at Geneva. That is a vehicle which will compete in the sector that is typified by Nissan Juke, Mini, Kia Soul.
"That is a vehicle which will be available back-end of 2013. So really its a 2014 sales programme."
Best of breed
Of those 2,500 new cars Williams expects two-thirds to be sold using some form of finance, 1,200 of which will be through GMAC."In the great scheme of things, its not a massive amount of vehicles but it represents a reasonable proportion of our business."
Working with GMAC, SsangYong have approached their dealers with a programme to push finance on the forecourt.
"We have put within our tactical programme with our approach to the dealers, finance and the selling of finance, the whole process that goes with it.
"Its the right thing to do in terms of profitability," says Williams. "Its the right thing to do in terms of relationship with the customer.
"In terms of creating databases and use for repeat purchase, youve actually got something you can farm in the future."
And SsangYong dealers were all the more receptive to Williams plans following the GMAC announcement, being as he says "pleasantly surprised because GMAC is a big, well-known and established finance company.
"The level and scale that they operate at is very different to perhaps some of our dealers. What it immediately gave our dealers was best-of-breed systems, service and back up they wouldnt necessarily enjoy if they were with A N Other Company.
"Weve been fortunate enough to negotiate, in terms of GMAC, to put our dealers on a playing field which they couldnt have expected to if they negotiated terms themselves.
"That helps them to be more competitive. If theyre more competitive, theyre more likely to be more successful and profitable as a consequence."
Williams says SsangYong were negotiating with several other financers and were happy they could convince GMAC of the small but high-quality business the marque could bring.
"Theyll find us committed to developing finance business," he says. "Well consequently end up punching above our weight."
"Well consequently end up punching above our weight, in terms of what we do and how we do it."
