Why are these companies interested to buy Ssangyong?
Remember Ssangyong? The once rather successful auto manufacturer that was famous for their SUV’s MPV and also pickup truck.
Having seen success in South America, Australia, New Zealand and also Malaysia, Ssangyong started seeing a slow decline in the past decade and its Malaysian dealer closed its doors years ago as there were no new models coming in and spare parts for existing models were getting scarce.
Today, there are hundreds of stranded vehicles siting outside workshops and homes of owners who have given up trying to keep their Ssangyongs running.
When Ssangyong was put up for sale due to bankruptcy in the beginning of July this year, it looked all but certain that this was just part of the process before the South Korean automaker was consigned to the history books for good.
This doesn’t really look to be the case anymore though, as there are surprisingly now up to 9 potential suitors looking into taking over this cash-strapped company.
News that has apparently also come as a shock to even Ssangyong themselves, the big story amid all these recent developments however will be the participation of two large South Korean conglomerates into the bidding war for this embattled automaker. The first of which is the SM Group, with the other being Edison Motors.
Now delving into a little bit more detail in regards to what these two potential suitors see in Ssangyong, the SM Group is reportedly looking into the purchase of this embattled automaker with the aim of diversifying into the EV market.
Already a producer of automotive parts through its Namsun Aluminium subsidiary, they are currently hailed as the front runners in the bidding war due to its position to finance its acquisition of the company without the need of outside financial backing.
Not to be confused with the entirely unrelated entity that is SM Entertainment, South Korea’s 38th largest conglomerate had actually also previously placed a bid in for Ssangyong when it was initially offloaded by Chinese conglomerate SAIC during the 2008 financial crisis.
It however lost out to Mahindra & Mahindra at that time, who are incidentally now the people who are desperately looking to off-load this embattled automaker a decade on from then.
Moving on to Edison Motors meanwhile, this South Korean bus manufacturer’s aim in acquiring Ssangyong is very much along the same EV-centric lines as the SM Group. Its method of acquisition however is quite different, as the commercial vehicles producer has instead formed a consortium with a private equity fund and other parties in order to help fund this purchase.
In speaking further on the topic of other parties too, these two South Korean companies aren’t the only two major players that everyone is keeping an eye on for the eventual ownership from Ssangyong. That is because the US-based Cardinal One Motors is reportedly still in the running for acquiring the automaker too.
A California-based company that has risen from the ashes of the now-bankrupt HAAH Automotive Holdings, they were one of the first in expressing an interest to take over Ssangyong when it initially fell into receivership at the end of last year. This interest though was dismissed by many initially, given that this company had after all gone bust from failing to import knock down kits for Chery into North America.
It nevertheless now looks that Cardinal One is still managing to stay in the bidding war by leveraging the promise of a North American market entry for Ssangyong. The funding for its acquisition attempt however still remain an issue for this newly-reborn company, who is currently hoping for the Korea Development Bank to stump up the extra cash for this purchase.
Just touching a little bit more on what Ssangyong themselves are doing to make themselves more attractive to bidders, the cash-strapped automaker has recently put its ancestral production plant in Pyeongtaek up for sale in a bid to finance the construction of a new modern facility in the outskirts of the city.
The company is also currently planning to launch an all-electric version of its Korando crossover by the end of this year, with ambitious plans for a rugged-looking SUV and pickup truck in the future too.
Getting back to the whole sale process on the other hand, the leading investors are set to submit bids for Ssangyong come September. The final confirmation for the sale however is apparently only to be announced in November.
Research and Text by Joshua Chin
