All-out to Normalize Operations
SsangYong Motor has signed a basic contract with Songuo Motors, a Chinese electric vehicle manufacturer, and Hyolim Precision, a Korean auto parts manufacturer, on knockdown sales of the Tivoli and platform technology cooperation.
The three companies held a signing ceremony at SsangYong Motor's Seoul office on June 18, with SsangYong Motor CEO Ye Byung-tae, Songuo Motors CEO Shin Yong-bok and Hyorim president Kim Jong-jin attending.
Following the basic contract, the three companies will sign detailed contracts. Songuo Motors will assemble a partially modified version of the SsangYong Tivoli with knockdown parts from SsangYong from the end of this year at the earliest. It will export the assembled vehicles to regions such as the Middle East and Africa.
In addition, through technical cooperation with SsangYong, Songuo Motors will develop a separate model of its own using the Tivoli platform. It plans to produce the model at its plant in a high-tech zone in Shandong Province. It aims to expand production to 60,000 units a year.
Songuo Motors is an electric car company that has production plants in China and Bulgaria, and is also constructing an assembly plant for electric vehicle production in Poseung Industrial Complex in Korea.
Hyorim Percision is a manufacturer of automotive axle and chassis modules and has produced chassis for the Rodius and axles for the Musso and Rexton. Through this cooperation, it will develop axles for the Tivoli to be produced by Songuo Motors.
SsangYong stressed that the contract with Songuo will not only increase its global sales but give momentum to its ongoing efforts to normalize its operations.
In particular, Ssangyong Motor plans to continue to expand new businesses, including platform utilization projects and bare chassis sales, based on its experience in the SUV sector and specialized technical knowhow.
Currently, Ssangyong Motor is stepping up efforts to develop new models in preparation for a favorable market situation after the COVID-19 crisis, as sales of non-core assets, including the Busan Logistics Center and the Seoul Service Center, are proceeding smoothly. The ailing carmaker has been making desperate efforts to raise funds.
At the same time, it has started efforts to look for a new investor. Recently, it has selected Samsung Securities and its global partner Rothschild as a lead manager for its efforts to find a new investor.
India’s Mahindra Group, the largest shareholder of SsangYong Motor, has reportedly told the management of its Korean subsidiary that it would attract a new investor through a capital increase rather than a stake sale.