Cash (and Time?) Runs Out for Korea’s Ssangyong
By Andy Bannister
In another sign that some of the weaker players in the global auto industry could soon be knocked out, one of South Korea’s smaller manufacturers, Ssangyong Motor Company, has reportedly told its 8,000 workers it cannot pay their December wages.
Although largely unknown in North America, Ssangyong widely exports a limited range of mainly 4X4 vehicles to markets around the world including Europe and Australia.
The company is 51% owned by China’s SAIC (Shanghai Automotive Industry Corporation), which has threatened to withdraw its involvement as early as next month unless a restructuring plan is agreed by unions.
Ssangyong has already slimmed down its dealer network in Korea and temporarily suspended production of all models on 17 December. This year it has seen total sales slide by nearly a third.
One particular problem for Ssangyong is it has no small, fuel efficient models, so it is as exposed as 4X4 specialists like Jeep and Land Rover to a change in buyer preferences away from models like the company’s Kyron and Rexton.
It has also experienced far more intense competition of late, with all its domestic rivals – Hyundai, Kia, GM Daewoo and Renault-Samsung – bringing out competing 4X4s.
Back in 1991, Ssangyong entered an agreement with Daimler in Germany to use Mercedes engines and other technology in its vehicles, and that link has been one of its key selling points over the years.
Ssangyong’s automotive flagship is the remarkably ambitious but low volume Chairman, an executive saloon containing elements of a previous Mercedes-Benz S-class.
The company also markets an unbelievably ugly MPV, the Rodius (known as Stavic in some markets) whose stand-out-a-mile appearance and huge carrying capacity for the money has won it a small niche in some export markets.
Ssangyong’s fortunes have fluctuated widely in the last decade. At one time it was swallowed up by Daewoo at the height of that company’s growth, with the Ssangyong badge briefly consigned to history, only to be revived after Daewoo’s bankruptcy with the help of SAIC.
With SAIC also owning the models of the former British MG Rover company, as well as the MG badge, some commentators have speculated on the ranges being brought together and certain Ssangyongs being rebadged with the more commercially appealing MG name when (or should that be if?) that company’s revival gets under aay internationally.
With its Korean workers understandably angry and set to mount a series of protests against the brand’s Chinese backers, the future of the company is currently unclear, though doubtless the latest uncertainty won’t help already falling sales.
With such oversupply of car making capacity globally and predictions of a sustained downturn, Ssangyong may be the first of many casualties.
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