SsangYong up for sale

Tuesday, 16 June 2020

Take a look at the all-new SsangYong Korando, it might surprise you - it sure surprised us, and in a very good way.

SsangYong's owner, Mahinda & Mahindra, is looking to offload the Korean car-maker after a grim first half of the year.

Over last weekend, managing director of Mahindra, Pawan Goenka, confirmed to Reuters: “SsangYong needs a new investor. We are working with the company to see if we can secure investment.”

The announcement follows news of SsangYong slipping from profitability a year ago to a US$258 million loss (NZ$397.5m), owing to collapsing sales and COVID-19.

SsangYong as we know it might not be long for this world. It's owner, Mahinda and Mahindra, want out.

Mahindra, which owns 75 per cent of SsangYong, bought its stake in 2010. At the beginning of this year, the Indian giant announced it would invest $US423 million (NZ$651.8m) into the Korean as part of a rescue plan, with the main goal being profitability by 2022.

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The tie-up between Ford and Mahindra was expanded to include SsangYong back in January but there's no word of a Ford-backed bailout just yet.

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“If a new investor comes on board, that automatically takes our stake down, or they may even buy our stake,” Mahindra’s deputy managing director, Anish Shah told Reuters.

Mahindra will be reviewing all of its loss-making businesses over the next 12 months in a bid to cut costs and prioritise capital expenditure as it rides out the coronavirus pandemic.

Where there is no clear path to profitability it would either look for a partnership or to close down those businesses. However, in those that can clearly generate equity returns of 18 per cent or those that are of strategic importance, Shah said that Mahindra would continue to invest.

One partnership that has been forced to take a back seat is the tie-up between Ford and Mahindra. The two makers will continue to develop, market and distribute rebadged Ford vehicles for the Indian market but the completion of the merger has been delayed. Interestingly, the agreement was expanded to include the Korean marque SsangYong but there's no word on if Ford will bail out the Korean manufacturer.