JOIN US Mahindra group’s South Korean arm Ssangyong Motor Co, will invest $920 million in the next three years to bring new models while it expects to break-even in two years.
The company launched a compact SUV Tivoli, its first product after being acquired by Mahindra in 2011.
“Ssangyong has invested 700 billion won since its M&A (with Mahindra) and would put one trillion won ($920 million) in the next three years,” Ssangyong Motor Co Chairman Pawan Goenka said here at the launch.
The company is expecting to sell 1,60,000 units in 2015, including 85,000 units of Tivoli in South Korea and the rest in its other major global markets such as Russia and China.“With the incremental volumes coming in because of Tivoli, we are hopeful of achieving break-even in two years from now,” said Ssangyong Motor Co (SYMC) CEO Yoo-il Lee.
Underlining the significance of Tivoli, Goenka said, “If it succeeds then we would sail through...It's a similar situation to the one we had faced at the time of launch of (Mahindra) Scorpio in early 2000.”
Goenka, who is also M&M's Executive Director (Automotive and Farm Equipment sectors, said at that time Mahindra had put Rs 600 crore and the company could not have afforded to fail in the market.
Hit by the global financial crisis of 2008, loss making SYMC was on the verge of bankruptcy and is currently charting a turnaround course after Mahindra & Mahindra acquired it 2011. It came close to breaking even in 2013 and 2014 but missed it due to a bonus it had to give its employees following the order of the South Korean Supreme Court.
“The impact of the Supreme Court ruling led to our wages going up by almost 10-13 per cent, which will take us at least two years to recover,” Lee added.
Elaborating on future product plans, he said SYMC would bring a new model every year at an investment of one trillion Won ($920 million) in the next three years.