Mahindra To Exit Ownership On Loss-Making SsangYong

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Mahindra To Exit Ownership On Loss-Making SsangYong

In February 2011, Mahindra acquired SsangYong Motor Company for USD 463 million. In a few years, the carmaker succeeded in making the SsangYong into a successful business after 9 years. It also surpassed the success of Tivoli, which was revealed in the same year. In 2017, the company received a great response and recorded a good number of sales. Soon it became the fourth largest South Korea-based vehicle producer.

Mahindra and SsangYong started manufacturing cars together that became successful. Some of the models include XUV300 SUV and the Alturas G4, a renovated version of Rexton G4. The popular XUV300 was designed in the SsangYong Tivoli’s X100 platform. With passing years and grand success, Mahindra expanded the stocks in the South-Korean industry from 72.46 per cent to nearly 74.65 per cent over the extra agreement of commissions in 2019.

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Recently, the carmaker announced the financial reports for 2019-20. They claimed a meaningful share of its losses of around Rs 3,049 crore. The report is started for global subsidiaries in the Automotive sector. It is essential to know that approximately 80 per cent addition is proposed by SsangYong and Genze of the shares. Mahindra has officially declared to withdraw in 6 months duration.

Mahindra To Exit Ownership On Loss-Making SsangYong

Mahindra said that they have also added 40 billion Korean Wons recently regarding a specific one-time venture into SsangYong. However, the company maintained the point considerably well. Commenting on the announcement, Dr Pawan Geonka, Managing Director at Mahindra & Mahindra said,” They (SsangYong) need a new investor and we are working with them to see that happens. Once we have an investor, Mahindra doesn’t remain the largest shareholder.”

The investments for M&M and Mahindra Vehicle Manufacturers Limited (MVML) was Rs 44,866 crore this year, decreased by 15 per cent. Whereas, earnings after charge attained in at Rs 740 crore, falling 86 per cent (YoY).The outcomes were influenced as numerous circumstance including the change to BS6 standards, Ssangyong and COVID-19 effect, amidst others.

Mahindra has confirmed that there are resembling at the outstanding 20 per cent beings causing the loss pretty thoroughly till 2021. They will exert proper determinations as per the situation. Regarding the new ventures, Dr Goenka said,“We said 2 years ago that we will break even on international business but that did not happen. So first, we will try and consolidate what we have and not look at any new acquisitions in the short term.”

A new report suggests that SsangYong is dealing with the Korean Development Bank (KDB) for increasing the time-period of its credits worth approximately $86 million. The company has reported lower profits with no instant indication of return. The company is seeking for economic assistance from the KDB and the government. However, there are no further reports of help. They request that Mahindra requires to contribute stocks into SsangYong.

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S. Vishwakarma

S. Vishwakarma

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