JOIN USMahindra & Mahindra Ltd, a major Indian sport utility vehicle manufacturer, completed its acquisition of Ssangyong Motor Co in the middle of March, bringing the South Korean company out of court receivership.
Ssangyong filed for bankruptcy protection in early 2009 amid falling sales, mounting red ink and a history of labour strife. The company was once majority-owned by SAIC Motor Corp until the Chinese company lost management control during the bankruptcy process.
Mahindra & Mahindra and Ssangyong announced in November that they had signed an acquisition agreement for the Indian company to take a 70 per cent stake. South Korea's fifth-largest automaker mostly manufactures SUVs but also makes the Chairman luxury sedan, the latest version of which was launched today at the 2011 Seoul Motor Show.
"The Indian auto market is growing substantially and we hope that will bring benefits to Ssangyong," Anand Mahindra, vice chairman and managing director at Mahindra & Mahindra, told reporters at the show, held in the city of Goyang, near the capital Seoul.
Mahindra said he could not reveal the timing, although he added the company is interested in taking Ssangyong's Korando and Rexton SUVs to India.
He also said that the automakers are exploring joint marketing initiatives in other regions.
"We think there are huge synergies for us to look at Africa, which is the next frontier for automobile growth," Mahindra said. "Together with Ssangyong we think we can make headway there."
Ssangyong's history of labour troubles culminated in a 77-day occupation of part of its production line in 2009 by hundreds of workers let go under a plan to slash jobs and stem losses. Strikers fought pitched battles with police commandos before the occupation ended.
Those days of violence and disharmony are now over, said Ssangyong CEO Lee Yoo-il, who steered the company through court receivership.
"We went through a very extensive and aggressive labour strike in 2009," said Lee, a former executive at South Korea's Hyundai Motor Co. "But what we gained from that strike was nothing."
He said labour and management are now working together so Ssangyong can survive.
Mahindra emphasised that his company is committed to Ssangyong's revival and has no intention to quickly sell its stake. "We believe very firmly in Ssangyong's future," he said. "We are committed, therefore, to a turnaround in the company's fortunes."