SsangYong dragons roar again. The Korean car brand, saved from the crack, focuses on electric
SsangYong, back on track in just 18 months against the 20 of the bankruptcy procedure, is determined to avoid new skids with the electrification of the range
With the money from the KG Group, the Korean brand SsangYong Motor has fully satisfied its creditors and is preparing to get its activities underway again, with a rather aggressive industrial plan, obviously based on the electrification of the range.
Does this perhaps mean that SsangYong will soon become as familiar to our ears as the names of the Chinese cousins ( Byd , Nio, Chery , XPeng…) that are about to debut in Europe? It is still too early to tell, although the house of the two dragons (SsangYong, which in Korean means "pair of dragons") is, in truth, already present in our country too with the imports of the Koelliker Group, but not yet in such a way as to oversee the market really. After all, it is no secret that the electric race will favor Asians. And the Koreans, for their part, have a giant like LG engaged in the construction of batteries.
THE RELAUNCH OF SSANGYONG
But let's go back to SsangYong back on track in just 18 months, against the 20 of the insolvency procedure and determined to avoid new skids. How? Chairman Kwak Jea-sun and CEO Jeong Yong-won unimaginatively intend to accelerate the "normalization of management, increasing sales and quickly making profits." The debt settlement – reads the company note – took place on 11 November last through the funds deriving from the acquisition by the KG Group, completing the operation which began in April 2021.
FIRST TORRES, THEN ELECTRIC
The first step will be the global launch of the new Torres SUV. The new vehicle will be positioned between the Korando and the Rexton and with the former it shares the platform and the 1.5 T-GDI engine with 163 HP combined with a 6-speed automatic transmission and all-wheel drive. In Europe, however, only the electric variant will arrive with a power of 188 HP and an autonomy of just over 320 km.
Next year the range will be expanded with the first in a series of battery models, the U100. All this thanks to the funds put on the table by the industrial conglomerate which acquired about 59% of the capital from the bankruptcy trusteeship. KG, the industrial conglomerate that acquired about 59% of the capital from the bankruptcy receiver, has in fact led a pool of investors ( Ssangbangwool and Pavilion Investment Corp – Private Equity) thus launching the recovery program with a total value of 950 billion won (approximately 700 million euros at current exchange rates), in the hope of making the pair of dragons regain altitude.
THE FAREWELL OF THE INDIANS
The troubles for the Korean company began in the spring of 2020 when, in the midst of the pandemic, the Indian parent company Mahindra had decided to get rid of it: "After lengthy deliberations based on current and prospective cash flows, the board of directors of Mahindra & Mahindra established of not being able to inject new capital into SsangYong Motor and urged SsangYong Motor to find alternative sources of financing”, the feral press release of the Indian group, still available on the website.
THE SECOND FAILURE TO FAILURE
Mahindra had owned 74.65% of SsangYong's capital for exactly 10 years, having saved it from bankruptcy in 2010. Since then, however, the pair of dragons had not managed to regain share, indeed, the financial data of the last decade highlight especially declining sales and ever-increasing losses. To be precise, when the Indians pulled the plug, sales were down more than 30% (107,416 vehicles), revenues down 19% and an operating loss from 282 billion won to 449 billion (336 million of Euro).
But it was Covid that gave the final blow, which led Mahindra to be more cautious in investments. The check for 390 million euros previously announced to bring SsangYong Motor back into profit by 2022 ended up in confetti. That sum would have enabled the Korean company to embrace the electricity market with conviction, inaugurated with the "on tap" version of the Korando, while the closure of the Indian taps had left it exposed in relations with creditors. SsangYong, in July of the same year found itself having to repay a loan to the Korea Development Bank of over 60 million euros. For its part, Mahindra & Mahindra limited itself to writing a much more modest check for 30 million.
For this reason, in December of the same year, the executives of SsangYong Motor had nothing left to do but resubmit an application, the second in ten years, to access the insolvency procedure, so as to subject the company to compulsory administrative liquidation with the aim of finding a company capable of replacing the Indian group in ownership. The arrival of the Koreans in the Cesarini area has saved a House which in two years will celebrate its first 70 years of activity as well as having brought the majority of the capital back within national borders.
This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/smartcity/i-draghi-di-ssangyong-tornano-a-ruggire-il-marchio-dauto-coreano-salvato-dal-crack-punta-sullelettrico/ on Fri, 18 Nov 2022 06:42:04 +0000.