Troubles at SsangYong have hurt Mahindra's global SUV plans: Report
South Korean automaker SsangYong Motor filed for receivership in a Seoul court on December 22.
December 31, 2020 / 11:22 AM IST
Ssangyong-Rexton (Image: SsangYong)
Mahindra and Mahindra's (M&M) plan to become a global maker of sport-utility vehicles (SUVs) has hit a roadblock after cash-strapped SsangYong Motor filed for bankruptcy.
M&M's share in the domestic SUV market has declined significantly, while it faces competition from Maruti Suzuki India and Hyundai Motor, according to a Mint report.
M&M's management bandwidth was stretched by multiple businesses such as electric vehicles, two-wheelers and shared mobility, executives told the paper.
Moneycontrol could not independently verify the story.
South Korean automaker SsangYong Motor filed for receivership in a Seoul court on December 22. M&M had acquired SsangYong in 2010 and owns 75 percent equity in the company.
Also read: SsangYong's bankruptcy filing brings to light Mahindra & Mahindra's struggle with partnerships
M&M did not comment when contacted by Mint.
SsangYong reported losses for 15 consecutive quarters and also defaulted on repayment of bank loans. M&M had in April declined to inject new funds into the South Korean SUV maker and is looking for buyers for its stake in the company.
"The idea was to build on the success of Bolero, Scorpio and XUV500 (SUVs) and make a mark in the premium and bigger SUV segments in India while building scale for SsangYong along with entering several lucrative export markets," a source told the publication.
"Mahindra's decade-long ownership of SsangYong should not be looked at in black and white alone. It did launch the Rexton and the Tivoli-based XUV300 SUVs in India. While SsangYong Rexton as a brand failed to create value initially, it remains unclear why M&M pulled the plug on it," another source told the paper.