Mahindra and Mahindra – which owns a majority stake in Korean SUV maker SsangYong – is set to sell the brand to Edison Motors, a relatively young commercial vehicle firm from South Korea, for just £170 million (around Rs 1,754 crore). SsangYong has been incurring huge losses over the last couple of years, which forced Mahindra to stop further investments and look for potential investors for the Korean carmaker in June last year.
- Ssangyong is set to be acquired by South Korea-based Edison Motors
- So far, Mahindra held a majority 75 percent stake in the company
- Despite financial troubles, SsangYong has a clear future product strategy
SsangYong to be acquired by commercial EV start-up
The acquisition comes after a long period of financial trouble for Ssangyong – where Mahindra owns a majority 75 percent stake. The Indian manufacturer saved Ssangyong from bankruptcy in 2011, but slow global sales have limited its return on investment. In December last year, Ssangyong filed for bankruptcy, reportedly owing 315 billion won (around Rs 1,999 crore) to its creditor and was ordered to restructure itself by a bankruptcy court.
Now, six-year-old EV start-up Edison Motors is primed to take control of Ssangyong for 280 billion won (around Rs 1,754 crore), according to media reports. The move would provide Edison with a passenger car portfolio in addition to its current range of electric buses and trucks.
Edison was always in the list of interested parties, but was substantially outbid by a 500 billion won (around Rs 3,174 crore) offer from rival firm EL B&T. But with all other bidders backing out, Edison has become the preferred buyer.
SsangYong: future course of action
Despite its financial troubles and declining sales in recent years, Ssangyong has been clear about its future product strategy. An electric version of the Korando crossover is due to arrive soon, followed by a larger and more ruggedly styled SUV called the J100.
Mahindra also sold rebadged SsangYong products like the previous-gen Rexton and its replacement SUV – the Mahindra Alturas – in India. But, both products had dismal sales.
It is important to note that while Mahindra will get rid of the SsangYong brand from its portfolio, it is expected to continue supporting it with technology and platform sharing as the upcoming Korando EV is based on Mahindra's MESMA platform, that will also underpin future electric SUVs by the manufacturer in India.
Ssangyong is the fourth largest manufacturer in Korea, after Kia, Hyundai and GM Korea. Edison CEO Kang Young-kwon told The Korea Herald that, if successful, his company will invest between 800 billion and one trillion won (around Rs 6,348 crore) in Ssangyong's revival, with a view to turn it into a viable rival to Tesla, Volkswagen and GM.
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