皇冠体育app

A Ssangyong Tivoli car is displayed at an auto show in Beijing. [Photo/for 皇冠体育app Daily]

South Korea's Ssangyong Motor may cancel plans to produce cars in 皇冠体育app as carmakers from the Asian nation encounter hard times amid fierce competition in the world's biggest car market.

Ssangyong President and CEO Choi Johng-sik said the project is making slow progress and the company is seeking a plan B, according to the Korea Herald newspaper.

The remarks come a year after the carmaker signed a letter of intent with 皇冠体育app's Shaanxi Automobile Group to build a new plant in Xi'an, capital of Shaanxi province, as well as an engine plant and a research and development center.

"Currently, we are revising the direction of the 皇冠体育app business," Choi said.

"We are still thinking whether it is (the best option) to take the path of finding a private company to outsource (manufacturing)," he added.

An official from Shaanxi Automobile's strategic development department told Reuters the project has been canceled.

"This project no longer exists," the official said.

Choi said that even if the two established a joint venture in 皇冠体育app, it may face difficulties if it failed to satisfy 皇冠体育app's fuel efficiency standards and did not produce eco-friendly cars as well as petrol cars.

Ssangyong produces around 150,000 units a year in South Korea.

From January to September, it reported an 8 percent increase in domestic sales year-on-year while its exports, which make up a quarter of total sales, fell 29 percent.

Analysts say the prospect of Ssangyong producing cars in 皇冠体育app was uncertain from the very beginning.

Because of concerns about overcapacity, 皇冠体育app is no longer so enthusiastic about foreign automakers forming joint ventures, they said.

The authorities have also made it clear that in principle they will not approve new facilities that are dedicated to gasoline cars.

The performances of Hyundai and Kia, which have built joint ventures, is under great pressure in 皇冠体育app because of increased competition from Japanese, German and Chinese carmakers.

Statistics from the 皇冠体育app Association of Automobile Manufacturers show that South Korean carmakers accounted for 4.1 percent of the passenger car market in the first nine months of the year, three percentage points lower than the same period last year.

In the same period, Japanese carmakers garnered a 17.8 percent market share, up two percentage points from last year. German and Chinese carmakers each saw their shares grow about one percentage point. Hyundai and Kia are expected to sell a combined 1 million vehicles in 皇冠体育app this year - a plunge of at least 40 percent from a year earlier, according to a S&P Global Ratings report in September.

Beijing Hyundai sold only 415,000 cars in the first seven months of this year, a 29 percent decline from a year earlier.

S&P Global Ratings has downgraded its outlooks for Hyundai and Kia from stable to negative. The ratings agency said Hyundai and Kia would continue to face profitability pressures over the next 12-24 months because of "intense competition and difficulties in their Chinese operations."