A Big Boost for Ailing Korean Automaker
A senior executive of U.S. automaker Ford will visit SsangYong Motor this month to discuss ways to sell vehicles produced at Ssangyong’s plant in Pyeongtaek under the Ford brand in overseas markets. A triangular alliance involving Ssangyong, Mahindra and Ford has been forged to support the financially troubled Ssangyong Motor. SsangYong is likely to produce cars for Ford starting as early as 2020.
"We are pushing to export SsangYong vehicles under the Ford brand to increase sales," said Chung Il-kwon, chairman of SsangYong Motor’s labor union, in a statement distributed to its members on Dec. 31. "In January, Ford’s senior executive will visit the Pyeongtaek plant to discuss the plan."
Chung said, “We will seek to solve SsangYong’s structural problems by developing a competitive mid- and long-term product lineup through cooperation among SsangYong Motor, Ford and Mahindra.”
Recently, Indian media outlets also reported that Ford and Mahindra will set up a joint venture that will have a stake in SsangYong and transfer its technology to SsangYong.
SsangYong will also advance into the electric vehicle market, a segment the company has not been able to enter due to lack of technological development. "We have continuously contacted the government for the past year to pave the way for securing core technologies for electric vehicles that are competitive in technology and price," Chung said. With the support of Mahindra, SsangYong is said to have formed a technology partnership with an electric vehicle manufacturer in China to develop and launch electric vehicles.
This year, Korea Development Bank (KDB), the main creditor of SsangYong, is also expected to provide support. KDB is considering extending the maturity of its 90 billion won (US$77 million) loan to SsangYong as the carmaker is facing financial difficulties due to sluggish sales. If the maturity is extended, Mahindra will inject up to 230 billion won (US$198 million) in its Korean subsidiary.