Chery Puts $75 Million Into KG Mobility In Korea

Chinese manufacturer Chery Automobile will invest US$75 million in South Korea’s KG Mobility through convertible bonds, Reuters reports. If the bonds are converted into shares, Chery will acquire an approximately 10 percent ownership stake in the company.

Chery President Zhang Guibing stated that the companies want to explore the possibilities of joint use of production capacity and cooperation in various production segments. He added that there are opportunities for cooperation in distribution and other business areas.

Chinese automakers are increasingly collaborating with established manufacturers to take advantage of existing production facilities outside China and expand their presence in foreign markets. Chery is currently China’s largest car exporter.

Zhang also said that the company is considering various opportunities to enter the US market. In doing so, it will have to satisfy US regulatory and legal requirements.

KG Mobility plans to introduce a new mid-size SUV under the internal designation SE-10 in January. The model will use Chery’s T2X platform and will be available with gasoline and plug-in hybrid powertrains for domestic and foreign markets.

KG Mobility President Kwak Jae-sun said that there are currently no plans to export the model to the US, but that the company does not rule out the possibility in the future.

KG Mobility, formerly known as SsangYong Motor, is the fourth largest automaker in South Korea, behind Hyundai, Kia and General Motors. In the first half of the year, they sold more than 55,000 vehicles on the domestic and foreign markets, approximately 60 percent of which were exported.

Chery and KG Mobility also agreed on the establishment of a joint working group that will explore the possibilities of cooperation in the field of semiconductors, robotics, raw materials, steel and other industrial segments.

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