Mahindra-owned SsangYong Motor Company has been going through a court receivership after the parent company, Mahindra & Mahindra failed to bring in a buyer over the last year after announcing it would make no more investments in the South Korean carmaker. Ssangyong, which is 75% owned by Mahindra, has been under court receivership in South Korea since April as it failed to secure a payout from the banks. In the latest developments, an American company has shown interest in buying this ailing company. This article will see who this American company is and whether Ssangyong will be bought by it.
Court receivership is not new for SsangYong Motor Company. It was in court receivership in 2009 when Mahindra bought it for $463 million (Rs 3445 crore). It was a strategic decision as Ssangyong Motor Company was known for its higher-end sports utility vehicles (SUVs), which should have strengthened Mahindra’s core business. However, it didn’t go as planned and after years of losing money, Mahindra had to pull the plug on SsangYong. This was due to various reasons including the Covid disruption and Mahindra’s overambitious business expansion plans.
Which American company is it?
North American automotive distribution business HAAH Automotive Holdings has formed a new company called Cardinal One Motors to take over the process of bidding for SsangYong Motor Company. HAAH has long been in talks to buy SsangYong from Mahindra, but the talks have led to nowhere. HAAH is expected to file for bankruptcy liquidation after its plan to sell Chinese cars in America failed. The plan failed due to frosty US-China relations as well. Due to this reason, it formed a new entity in the form of Cardinal One Motors to bid for SsangYong Motor Company.
Benefits and cost of the operation
The SsangYong bid is likely to go up to $350 million (Rs 2605 crore), which is a significant amount. But Cardinal Motors seem confident as they have evaluated this since July last year. If Cardinal Motors does acquire SsangYong, it would look to bring vehicles from Korea to the US and Canadian Markets.
This was our take on whether Ssangyong will be bought by an American company. If you have car buying doubts click here to ask! Get the lowest price for car insurance here. For more such content stay subscribed to MotorOctane Youtube, Google News Facebook and Twitter. Also, follow us on Flipboard and Reddit where we have a discussion community.