Mahindra pulls back on Ssangyong lifeline

Coronavirus forces Mahindra to rethink its investment in Ssangyong.

Mahindra Ssangyong lifeline
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ANYONE who has driven a new vehicle from SsangYong’s current line-up should have been pleasantly surprised by the vehicle’s quality, equipment and the way it drives. Certainly if you had any experience with the marque’s vehicles from 20 years ago.

The South Korean manufacturer of SUVs and utes is no longer just a budget vehicle brand; although, its products remain to be great value. Like other Korean auto brands, its products have stepped up greatly, with some of them challenging the more recognised brands.

Much of this across-the-board improvement stems from a bailout in 2010 by Indian manufacturing leviathan Mahindra & Mahindra, when it bought 70 per cent of SsangYong to pull it out of near-insolvency.

Ssangyong Musso XLV Front Jpg
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Things might change again after Mahindra this week pulled back on its support of SsangYong, cutting back on planned further investment. As recently as February, Mahindra announced a US$423million package to turn SsangYong around to be profitable by 2022. But, this week, under the shadow of the coronavirus and a government imposed 21-day lockdown in India, M&M has rethought its input.

“After lengthy deliberation given the current and projected cash flows, the M&M board decided that M&M will not be able to inject any fresh equity into SYMC (SsangYong Motor Company) and has urged SYMC to find alternate sources of funding.,” said a company statement issued by Mahindra.

Mahindra has offered a one-off cash injection of close to US$33million over three months to help SsangYong stay in operation while it looks for any alternate sources of funding.

Ssangyong Musso XLV Rear Jpg
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SsangYong only returned to Australia in 2018 with an impressive model line-up and 40 dealers around the country. In a statement to those dealers, SsangYong Australia’s recently appointed Chief Operating Officer, Chris Mandile, said this week, “Mahindra remain committed in maintaining its current position with the SsangYong business. SsangYong have a three-year business plan and structures to support its operations both here and abroad.”

As well as looking for alternative investment, SsangYong Korea has already embarked on strengthening the business against the effects of the virus-related downturn, with a range of innovations across a number of areas, as well as improvements to its financial structures .

The current SsangYong Australia line-up includes the Musso and Musso XLV pick-ups, and the Tivoli, Tivoli XLV, Rexton and Korando SUVs. All SsangYong vehicles are covered by a comprehensive seven-year unlimited kilometre warranty that includes roadside assistance and capped price servicing for the full seven-year period.

 

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