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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)

Ssangyong-Rexton (Image: SsangYong)

 
 
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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.

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"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.
Moneycontrol News
first published: Dec 31, 2020 11:22 am

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