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SsangYong’s rebuild kicks off in earnest, as Australian sales grow

A newly stabilised SsangYong says it plans to accelerate the rollout of more SUVs and electric cars to underpin its planned ongoing return to profit and viability.

The Korean minnow brand said on November 11 it had cleared rehabilitation debts using funds from its acquisition by the KG Group, and has therefore completed its corporate rehabilitation procedure after some 18 months.

SsangYong Motor has been under court receivership since April 2021 as its former parent company Mahindra & Mahindra failed to find a new investor amid the pandemic and financial problems.

The company plans “to accelerate its early management normalisation by increasing sales and quickly making a profit,” it said, claiming to have laid the foundations for its business stabilisation and future growth development.

Planned future growth of SsangYong will be based on the company’s move towards electrification, supported through additional capital funding from the KG Group, with a model called U100 (understood to be an EV Torres) billed as the first scheduled release for next year.

In the nearer term there’s also plans for an international launch for the petrol-powered Torres that’s proven to be a hit at home, with SsangYong banking tens of thousands of pre-orders.

SsangYong appointed Kwak Jea-sun as its new chairman and Jeong Yong-won as CEO in September, with an eye to improving relationships with its workforce.

The KG Group also completed a second round of capital investment in October to repay priority claims and as part of its operational financing plan.

“On behalf of everyone at SsangYong Motor, we would like to express our sincere gratitude to all stakeholders, including the Seoul Rehabilitation Court, creditors and partners for their understanding and support in successfully completing the corporate rehabilitation procedure, and laying the foundation for the company’s business normalisation,” the company said.

“We particularly reach out to our customers to thank them for their loyalty, and as a completely new and transformed business, aim to reward them by providing the best possible customer service, and thank them for their patience.”

SsangYong saga background

Seoul’s Bankruptcy Court approved the latest rescue plan for SsangYong in August – paving the way for some overdue financial stability.

The Yonhap news agency reported SsangYong’s debt-settling plan – submitted to the Court in late July – was met with “overwhelming” support from creditors and other related parties.

consortium led by chemical and steel conglomerate KG Group got the green light to buy up a majority stake (reportedly 61 per cent) in the perennially debt-laden car-maker. KG Steel, part of KG Group, previously supplied components to SsangYong.

Its purchase price was reportedly more than three times what Korean electric bus manufacturer Edison Motors earlier agreed to pay for SsangYong, before its deal was scuppered.

SsangYong’s home life has been troubled for years, and it never seems to have a stable parent for long.

Daewoo bought a controlling stake in the company in 1997, only to offload it in 2000 as it experienced perilous financial woes of its own.

It endured a tumultuous few years under Chinese ownership, with SAIC Motor acquiring 51 per cent in 2004 but walking away in 2009 and leaving it in receivership.

Mahindra & Mahindra was the next parent to adopt SsangYong, acquiring a controlling stake of 70 per cent for 523 billion won in 2011.

SsangYong currently operates a full factory subsidiary operation in Australia, and sells the Musso ute, and the Rexton and Korando SUVs. It’s also working on launching the edgy Torres SUV in 2023.

The company has just posted successive record Australian monthly sales results, and year-to-date sits at 2967 sales, up 17.9 per cent year-on-year. This means it will break its annual record in 2022, having sold 2978 vehicles in 2021, and 2645 way back in 2005.

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