Barely two months after announcing that it would market SsangYong's products in Johannesburg, Mahindra South Africa (MSA) is now locked in a dispute with local company Twin Dragons Automotive over distribution of the South Korean auto maker's vehicles.
MSA, an affiliate of Indian auto maker Mahindra and Mahindra, had said in April that it would market SsangYong products in Johannesburg, the first country outside India, after M&M acquired a 70 per cent stake in the Korean car maker last year.
"The previous distributor for SsangYong, Twin Dragons Automotive (TDA), a member of the Imperial Group of companies, continues to trade and market themselves as the SsangYong distributor. Mahindra SA would like to inform potential SsangYong customers that the agreement between TDA & SsangYong is no longer valid," MSA said in a statement issued on Monday.
MSA Chief Executive Ashok Thakur said his company has not only represented SsangYong products in South Africa since April 1, but also in neighbouring Namibia, Botswana, Zimbabwe and Mozambique since the agreement between TDA and SsangYong was no longer valid.
But TDA's lawyers have denied this claim, saying that all vehicles sold by TDA now and in the past were purchased from SsangYong Motor Company as per the terms of a distribution agreement, which also gives TDA the right to sell vehicles with a valid manufacturer's warranty.
Anabela da Silva of TWB Attorneys, representing TDA, declined to comment further on the matter. He, however, indicated that the company could go to court, if necessary.
On Monday, MSA also announced 19 new dealers across South Africa for its SsangYong range of products.