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. Last Updated: 07/27/2016

Ssangyong to Sell SUV Kits in Russia

bloombergThe new Kyron automobile being presented at a motor show in Seoul in April. The car may soon be on sale in Russia.
GOYANG, South Korea -- Ssangyong Motor said Thursday that it expected to start making a profit this year and is close to signing a new deal to sell sport utility vehicle kits to Russia.

"We are seeing the effect of various cost cuts, while Ssangyong's exports are offsetting a difficult environment for local sales," Choi Hyung-tak, the carmaker's president and CEO, said in an interview on the sideline of the Seoul Motor Show.

Choi said the company was close to signing the deal to sell more of its mainstream sport utility vehicle kits to Russia following last year's agreement to supply 1.32 trillion won ($1.42 billion) worth of kits over five years.

"I cannot disclose details on that now, but the deal would be a bit smaller than last year's contract," he said.

Last October, Ssangyong said it would sell partially completed car kits for its Kyron and Actyon SUVs to carmaker Severstal-Avto from 2007 to 2011.

Ssangyong may also consider developing a pickup model for the United States in the hope of making inroads there following this week's U.S.-South Korea free trade agreement, which opened up both countries' auto markets, Choi said.

"It is worth considering a pickup there and we are closely watching how the market is going in line with tariff reduction," said Choi.

Ssangyong could begin selling cars in the U.S. in four or five years, once it has prepared a sales network.

On Tuesday, Hyundai Motor, South Korea's top carmaker, said it was considering developing and producing a pickup truck model designed for the United States. But while the trade pact should help lift auto sales on the South Korean market because of lower taxes, Choi echoed the concerns of others that there could also be strong competition from U.S.-made Japanese cars.