Ssangyong's history is one of the highs and extreme lows. The South Korean automaker had almost gone under several too, almost shutting their doors in 2010. They were saved by Mahindra later that year, but now it seems that the partnership is on shaky ground too.
Mahindra had refused to give Ssangyong fresh equity as the Indian company's board members rejected a proposed turnaround plan. Mahindra had cited slumping sales as the Korean automaker is down 30 percent in its home market. Ssangyong had only shifted 24,139 units during the first quarter of 2020 which is a stark contrast to Korea's big two, Hyundai and Kia.
For comparison basis, Hyundai sold nearly 66,000 cars for the month of March while Kia was able to sell about 51,000 cars during the same time period.
The downward sales trend seen in Ssangyong has no doubt been affected by the COVID-19 pandemic, but Hyundai-Kia actually bounced back in March. Even Renault Samsung saw rising sales when South Korea was able to flatten the curve of coronavirus infections. But even as the country is slowly but surely turning the tide, Ssangyong isn't seeing much of a recovery.
That said, Mahindra isn't totally abandoning Ssangyong in the current pandemic crisis. While a KRW 500 billion (approx. USD 406 million or PHP 20.7 billion) injection was rejected by the Mahindra board, they are still considering a one-time infusion of KRW 40 billion (approx USD 32 million or PHP 1.6 billion) for the next three months.
Mahinda said that they are also considering the prospect of selling off a portion of their stake to other investors. The Indian conglomerate currently owns 74.6 percent of Ssangyong.
While it's a big number away from the initial KRW 500 billion allocation, that KRW 40 billion is still something and Ssangyong will have to work with that if they want to survive their current predicament.