Mahindra, the majority stakeholder of Ssangyong Motor Co., has entered into negotiations with multiple carmakers to resolve the automaker’s current crisis, according to a local time report by India’s English magazine Economic Times (ET) on Wednesday. The company also added that the deal will allow Ssangyong to provide some of its shares along with technology transfer. The company plans to overcome the crisis through strategic alliances and investments.
Some interpreted that the possibility of alliances with existing manufacturers in other fields is open, like LG Chem. In particular, it was predicted that by establishing an electrification system, it could dominate the market in electric vehicle SUVs. In response, Mahindra did not elaborate, saying, “We are considering negotiations with all options open.”
Ssangyong Motor Co., which challenged the world’s most prestigious off-road car race “Darkar Rally,” announced on the 7th that it has successfully passed the first section and announced a smooth start to the completion of the rally for three consecutive years.
Ssangyong Motor is challenging to complete the Dakar rally for the third consecutive year with the Korando DKR this year, following the Tivoli DKR in 2018 and the Rexton DKR in 2019. The Korando DKR is a rear-wheel-drive rally car based on the Korando design released earlier this year and is equipped with a V8 6.2ℓ gasoline engine, boasting a performance of up to 450 horsepower and a maximum speed of 195km/h.
Meanwhile, the 2020 Dakar Rally, which is drawing attention as the venue has been changed to the Middle East for the first time in 12 years following Africa and South America, will be divided into 12 race sections from Jeddah on the 5th to Kidya on the 17th.
The 42nd 2020 Dakar Rally, which began with an all-night podium event at the Dakar Village in Jeddah, Saudi Arabia on the 4th (local time), featured a total of 342 teams in five categories, including motorcycles, four-wheel motorcycles, cars, SSVs (multipurpose off-road vehicles) and trucks, and started its first race on the 5th. In the first section of the race, which runs a total of 752 kilometers, Ssangyong finished the first round by ranking 10th in the automobile T1-3 (two-wheeled gasoline car) category and 33rd in the automobile category.
Meanwhile, Ssangyong has been in the red for 11 consecutive quarters through the third quarter of this year. Its operating loss in the third quarter reached W105.2 billion, with cumulative sales through November down 5.1 percent from the same period last year to 122,312.
“We are consulting with Ssangyong’s management by using various methods, including investment by third parties, and additional equity investment by Mahindra from the Korea Development Bank (KDB),” said Pawan Goenka, CEO of Mahindra and Mahindra. “We are focusing on creating synergies by integrating Ssangyong with our alliance partners.” Local sources said this is the first time that the CEO of a major shareholder has mentioned Ssangyong’s problems and strategies.
Industry sources analyzed that Ford, which established a joint venture with Mahindra, is likely to be included in the alliance partner. The two companies announced the establishment of a joint venture worth 275 million U.S. dollars in October. Mahindra took 51 percent of the stake and Ford took 49 percent. For this reason, speculation is rising that Mahindra, Ford and Ssangyong may be in a “triangular alliance.” The joint venture will take a certain stake in Ssangyong and transfer the joint venture’s technology to Ssangyong. If the triangular alliance becomes a reality, Ssangyong will be able to reduce development costs and time, and furthermore, target the U.S. market more easily.