The perpetually unfortunate SsangYong has had three owners in just 30 years. And now it’s in search of a new owner.
South Korea is best known for two major brands in the automobile industry, specifically Hyundai Kia and Hyundai Kia. Both started small but have grown to become well-known companies that build top-of-the-line vehicles like the Ioniq 5 and EV6.
Not as well-known is Korea’s third automaker SsangYong. It was founded in 1954. SsangYong is a split between its Korean competitors in terms of age. It is more advanced than Hyundai but less so than its Kia rival.
However, with just under 3000 sales in Australia, where it operates an affiliate operation, the brand is not as famous as its competitors in the market. This is perhaps a reflection of its turbulent past and bleak future.
After the country was split and its infrastructure destroyed following the bloody Korean War, the 1950s were a turbulent period for the Korean people.
The company, which is now known as SsangYong, was initially established in the form of the Ha Dong-Hwan Motor Workshop shortly after this conflict. Since resources and materials were scarce, the company entered the market by manufacturing buses and commercial vehicles using scrap metal from old oil drums. They were powered by engines salvaged from US military vehicles.
The company grew gradually over the following decade. 1966 brought it the honor of becoming one of the first South Korean vehicle manufacturers to export its vehicles to overseas markets. One of its buses was called the HDH R-66, now using the Nissan chassis that was launched in Brunei before being also exported to Vietnam.
The remainder of the decade saw the company expand its operations by constructing tractors and buses and dipping its feet into passenger cars by local assembly of Jeep vehicles in collaboration with US automaker American Motors Corporation (AMC).
The further investment in the market for passenger vehicles was followed by the development of the Jeep-inspired Korando SUV and exporting automobiles to Japan.
However, the company invested too much in its model lineup and has run out of cash. It was purchased by the cement maker SsangYong Group in 1986. The models were all produced following that under the brand name SsangYong.
Rebranded and now with more funds, the business today known as SsangYong aimed to establish an international presence. However, instead of developing the dealerships, sales channels, and the technology needed to compete within the company, it opted for a technological collaboration with Mercedes-Benz in 1991.
At first sight, it appeared to be a win-win situation for both companies, with the Korean brand getting access to Mercedes-Benz powertrains, related technology, and their worldwide distribution network. In turn, Mercedes-Benz will earn additional income by licensing and selling its technology to its Korean partner and have the possibility of making use of SsangYong products to fill any gaps in its current product line.
The first result of this collaboration is it was the SsangYong Musso. A vehicle sold by Mercedes-Benz dealers locally starting in 1996 (but not named as the SsangYong Musso) and offered with a 3.2-liter petrol engine that produced 161kW or a 2.9-liter diesel engine with only 70kW. Both machines could be connected to a 4-speed auto transmission borrowed by the Mercedes S-Class. Mercedes S-Class of the time.
Other Mercedes technology vehicles were released, such as the Rexton and, perhaps most importantly, the Chairman sedan based on the W124 Mercedes-Benz E-Class base, but it was scaled (and styled) to look like the more spacious S-Class.
Despite the technical collaboration, it could not improve, and subsequent takeovers were made. The first was fellow Korean brand Daewoo in 1997, which was ended up being sold in 2000 as the company’s financial position declined.
Chinese giant SAIC later bought it out in 2004. With an outdated and boring product line, sales remained flat. With the beginning of the Global Financial Crisis, SAIC began a reduction drive and tried to cut the cost of wages for the company.
Tragically, this caused one employee to die who suffered a cerebral hemorrhage in 2009 when workers went on strike and barricaded themselves in SsangYong’s main manufacturing facility and were then refused food, water, and other drugs. SAIC eventually decided to offer its SsangYong business to Mahindra & Mahindra. Indian company Mahindra & Mahindra.
SsangYong, as well as Indian automobile maker Mahindra & Mahindra, may hail from different countries. However, both have a long tradition of manufacturing commercial cars, 4x4s, and even SUVs as primary products.
This knowledge and experience, which was the Indian brand believed would work perfectly with its existing model portfolio when it bought it from the Korean company in 2011 for 523 billion Won (approximately 500 million at the current conversion rates).
In contrast to the partnership with Mercedes-Benz, the Mahindra partnership, however, Mahindra sought to utilize the Korean brand’s technology to benefit its customers and initially hoped to achieve the same successes that its rival Tata Motors had with its acquisition from Jaguar Land Rover (JLR).
Tata was investing in JLR to boost sales compared to German competitors, and Mahindra attempted to establish an analogy by turning SsangYong into a profitable Hyundai competitor and a competitor in India and abroad. However, ownership resulted in SsangYong platforms and techniques that could serve as the foundation for the new generation of cars sold exclusively as part of Mahindra. Mahindra brand.
The issue with this strategy was twofold. In a culture of image-conscious India, branding reputation is paramount. Although Hyundai was a worldwide-known brand that slowly built up an Indian reputation as a producer of premium, high-quality, ‘affordable automobiles, SsangYong had limited recognition in Korea and hardly any outside it.
This was further exacerbated by Mahindra’s retail strategies to sell SsangYong across India. Instead of separating SsangYong into its distinct brand with distinct dealerships and high-end retail channels, SsangYong automobiles were placed under a Mahindra sub-brand. New models like Tivoli Tivoli are being sold under the name of Mahindra SsangYong Tivoli.
So, Indian consumers were unsure of the way Mahindra is a brand most well-known for its actual vehicles like agricultural ones and auto-rickshaws with three wheels (tuk-tuks) and now provides a range of premium vehicles at the same dealership
The issue was made even more complicated because SsangYong products sold in India were sold in conjunction with the new version of Mahindra products (such as the XUV300) built on SsangYong underpinnings causing additional subsidies confusion.
With a growing motorcycle business and other ventures, Mahindra’s management and company were stretched too thin, which led to poor choices, including no real effort to get into the American market and a short product range.
The new Tivoli was a hit in other markets like Europe (and allowed the Korean firm to turn an income of net profits in 2016, its first time in nine years); however, the rest of the lineup remained underperforming. However, sales worldwide during 2016 surpassed 154,544 units.
While these numbers may appear sensible alone, parent company Mahindra was not happy with the Korean company’s performance overall. Further impacted by the COVID pandemic, the company decided to put SsangYong to auction at the end of 2020.
Failure to take over by Edison Motors
In the last quarter of 2021, SsangYong said it found a buyer, in the form of an electric bus maker Edison Motors, for A$331 million. The deal fell apart due to the consortium’s inability to pay the company before a March 25th, 2022 deadline.
Edison Motors had previously claimed that its electric vehicle technology and experience could permit SsangYong to create combustion-engined SUVs into various electric vehicles swiftly.
The company is currently in court receivership. Even though SsangYong has stated that its current plan is to look for a new buyer, it could decide to declare bankruptcy. However, it could mean that its suppliers and vendors will be left unpaid, which could have ripple effects across the Korean automobile industry.
Or in addition, the South Korean government may elect to take over and nationalize the business through the infusion of public funds.
Whatever direction the company decides to take will significantly influence the future of its models. SsangYong says it has almost completed the development of the J100 electric SUV, which could be a spiritual successor to the first Musso SUV. The vehicle is scheduled for a reveal in June 2022.
It is also planning to create an electric vehicle called the U100 at the end of Q2 2023. The car will run on BYD’s blade batteries under license from the Chinese automobile maker. The company also teased an SUV with a rugged appearance codenamed KR10.
The company had previously made plans to develop an electric Musso vehicle with over 500km of range. However, it’s not clear if this model will ever be built in light of the failure of the takeover attempt from Edison Motors.