Ssangyong Motor Sold For 305 Billion Won: Mahindra No Long Owns Debt-Ridden Company

Ssangyong Motor has been bought by a group of companies for 305 Billion Won (Rs 1,885 Crore). This was a long-pending transaction as the South Korean car manufacturer has been in debt for a while now and vehicle sales have dropped for Ssangyong.

Ssangyong Motor Sold For 305 Billion Won: Mahindra No Long Owns Debt-Ridden Company

In India, Ssangyong is known as the brand that Mahindra acquired a majority stake in. Many would remember the Ssangyong Rexton that Mahindra retailed in India. The Rexton wasn't anywhere close to being called a sales success, but it definitely was a solid SUV and many who bought it, still swear by it.

Ssangyong Motor Sold For 305 Billion Won: Mahindra No Long Owns Debt-Ridden Company

The Mahindra Alturas G4 that is currently on sale in India is based on the latest generation Ssangyong Rexton. The Mahindra XUV300 which is loved by many is based on the Ssangyong Tivoli. Ssangyong then has been an influential brand in India. Well, sort of.

Ssangyong Motor Sold For 305 Billion Won: Mahindra No Long Owns Debt-Ridden Company

In South Korea though, Ssangyong is big business. It is one of the largest automobile manufacturers in a market that is said to be the fifth-largest producer of automobiles. However, in recent times, sales of Ssangyong cars dropped drastically and revenue, in turn, plummeted.

Ssangyong Motor Sold For 305 Billion Won: Mahindra No Long Owns Debt-Ridden Company

In 2021, Ssangyong sold just 84,496 cars which is 21 percent lower than the previous year's sales. Adding to this are the losses the brand faced. Ssangyong reported an operating loss of around Rs 238 Billion Won between January and September 2021 even though revenue was 1.8 Trillion Won for the same period.

Ssangyong Motor Sold For 305 Billion Won: Mahindra No Long Owns Debt-Ridden Company

Indian auto giant Mahindra had bought a majority stake in Ssangyong back in 2010 knowing that the Korean brand was almost bankrupt. Mahindra hoped to turn things around for the brand and was looking to make a full recovery. However, things didn't really work out for Ssangyong as the brand was a sales disaster in the Indian market.

Ssangyong Motor Sold For 305 Billion Won: Mahindra No Long Owns Debt-Ridden Company

At the end of September 2021, Mahindra owned 75 percent stake in Ssangyong even though it had placed Ssangyong under court receivership in April 2021. In October 2021, it was reported that Edison Motors would take over Ssangyong.

Ssangyong Motor Sold For 305 Billion Won: Mahindra No Long Owns Debt-Ridden Company

Now, the deal has finally gone through and a group of companies — a consortium formed by Edison Motors has bought Ssangyong, therefore removing it from court receivership. Edison Motors is a Korean electric bus and truck manufacturer, and plans to rehabilitate Ssangyong by launching the brand in more markets including the Americas and Mexico.

Ssangyong Motor Sold For 305 Billion Won: Mahindra No Long Owns Debt-Ridden Company

Thoughts On Ssangyong Being Bought For 305 Billion Won

Ssangyong has in the past made some brilliant cars. The Tivoli on which the Mahindra XUV300 is based, The Rexton, and the Korando are perfect examples of some good Ssangyong engineering. However, it does seem like all is not well at the business end of things, and under its new owners, Ssangyong will continue to work against all odds in order to turn a profit.

Source: Reuters

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Read more on: #ssangyong #auto news
Article Published On: Monday, January 10, 2022, 18:42 [IST]
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