Mahindra confirmed to sell-off Ssangyong
Mahindra & Mahindra, which has a controlling share in SsangYong, is preparing to sell the brand to Edison Motors, a relatively new South Korean commercial vehicle company, for around Rs 1,754 crore.
SsangYong has been losing a lot of money in recent years, forcing Mahindra to cease making further investments and search for new partners for the Korean manufacturer in June of last year.
Ssangyong, in which Mahindra holds a controlling 75 percent interest, has been in financial difficulty for a long time. Ssangyong was saved from bankruptcy by the domestic manufacturer in 2011, but poor worldwide sales have limited its return on investment. Ssangyong filed for bankruptcy in December of last year, owing creditors 315 billion won (about Rs 1,999 crore).
According to media sources, Edison Motors, a six-year-old electric vehicle start-up, is set to acquire Ssangyong for 280 billion won. In addition to its present line of electric buses and trucks, Edison would get a passenger vehicle portfolio as a result of this deal.
Edison was always on the list of potential buyers, but was outbid by competitor EL B&T, which offered 500 billion won (about Rs 3,174 crore). However, with all other bids withdrawing, Edison has emerged as the favoured buyer.
While Mahindra will drop the SsangYong brand from its lineup, the company is likely to continue to assist it through technology and platform sharing, since the forthcoming Korando EV is built on Mahindra’s MESMA platform, which will also underlie the company’s future electric SUVs in India.
After Kia, Hyundai, and GM Korea, Ssangyong is South Korea’s fourth-biggest automaker. If successful, Edison CEO Kang Young-kwon told The Korea Herald that his firm will invest between 800 billion and one trillion won (about Rs 6,348 crore) in Ssangyong’s rebirth, with the goal of making it a credible competitor to Tesla, Volkswagen, and General Motors.