SsangYong revamp begins in earnest as sales soar in Australia

A newly stabilized SsangYong plans to accelerate the launch of more SUVs and electric cars to underpin the planned steady return to profit and profitability.

The Korean minnow brand announced on Nov. 11 that it has repaid debt using funds from its acquisition by KG Group, completing its corporate restructuring process after about 18 months.

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

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The company plans to “accelerate its early management normalization by growing sales and turning a profit quickly,” it said, claiming to have laid the foundations for its business stabilization and future growth development.

SsangYong’s planned future growth is based on the company’s move towards electrification, supported by additional equity funding from KG Group, with a model called U100 (understood as EV Torres) being billed as the first planned release for next year.

In the near term there are also plans for an international launch for the petrol-powered Torres, which has proved a hit at home, with SsangYong holding tens of thousands of pre-orders.

SsangYong appointed Kwak Jea-sun as new chairman and Jeong Yong-won as CEO in September to improve relations with its workforce.

KG Group also completed a second round of equity investments in October to repay senior debt and as part of its operational funding 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 process and laying the foundation for the normalization of business,” said the company.

“We’re reaching out to our customers in particular to thank them for their loyalty, and as a brand new and transformed company, we want to reward them with the best possible customer service and thank them for their patience.”

Background of the SsangYong saga

Seoul’s bankruptcy court approved the latest bailout plan for SsangYong in August — paving the way for some overdue financial stability.

Yonhap news agency reported that SsangYong’s debt settlement plan – which was submitted to the court in late July – has met with “overwhelming” support from creditors and other related parties.

A consortium led by chemical and steel group KG Group has been given the go-ahead to buy a majority stake (reportedly 61 percent) in the perpetually indebted automaker. KG Steel, part of KG Group, previously supplied components to SsangYong.

The purchase price was reportedly more than three times what Korean electric bus maker Edison Motors, which SsangYong previously agreed to pay before his deal fell through.

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

Daewoo acquired a majority stake in the company in 1997, only to sell it in 2000 as it faced dangerous financial problems of its own.

It endured a turbulent few years under Chinese ownership, with SAIC Motor acquiring 51 percent in 2004 but withdrawing in 2009, leaving it in receivership.

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

SsangYong currently operates a full factory facility in Australia and sells the Musso-Ute and the Rexton and Korando SUVs. It’s also working on launching the boxy Torres SUV in 2023.

The company has just released consecutive record monthly sales in Australia, and year-to-date sales stand at 2,967 sales, up 17.9 percent year-on-year. That means it will break its annual record in 2022, having sold 2978 vehicles in 2021 and 2645 vehicles in 2005.

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