On March 2011, when Mahindra & Mahindra took over the Ssangyong Motor, the latter was running in immense loses. The products of Ssangyong were not appreciated at all and the banks also stopped giving any further credit to the company owing to the fact that there was a decision pending in the local court on whether the firm should be declared bankrupt or should be locked down and closed. After getting under the wings of Mahindra & Mahindra, a year later the whole scenario has changed for good.The Korean firm has revived and all geared up to return to propitiousness. The firm has made revenue of Rs 11,150 crore with its new compact usage vehicle Korando C, the increase in revenue here was 32 per cent. However, this profit did not last long as the losses of the firm escalated and went to Rs 450 crore in 2011 from Rs 107 crore in 2010. Now the alarming question was, can Mahindra & Mahindra pull this firm and put it back into credit from already debit kind of business?
With an aim to manufacture 1,23,000 units by the end of this year, Ssangyongintends to raise this volume by 3,00,000 units by the end of 2015. A 100-step program module has been introduced by Mr. Yoo II Lee to get the firm back on its feet once again like the old days. The previous ability of the firm to get to the customers with auxiliary has increased to 85 per cent from its earlier 50 per cent. The union has also given its word that they will not go on strike at all if the firm comply to the said terms. These procedures should put the firm back into a benefitting status within next two to three years flat.
Mahindra & Mahindra made two important modifications as soon as it took over the Korean firm. At first it infused $200 million in equity to bring down the amenability of the company. Then on the second and next step, it came out with a new technological planning under a joint development venture under which they would be creating three types of car platforms, which will be used to manufacture different variants to ensemble the markets of either company. This will be something, which is going to be very economical and brings out the best in both the companies.
The XIV concept by the firm is targeted at the small usage car segment is going to be the first product of this joint platform development venture to come out within three years from now.At the very same time, Mahindra &Mahindra, will announce the upcoming joint platforms to come in the near future. In the meanwhile, both the Sports Utility Vehicle majors are contemplating on developing new types of engines, which will be coming in different displacements with both petrol and diesel fuel options. The firms are working really hard on the projects of developing transmission systems as well. The electric car manufacturer Reva is the third partner of Mahindra & Mahindra in the joint development planning and these three firms intend to develop a formidable platform for electric vehicles. All these research and development work will be carried out at the Mahindra & Mahindra’s R & D centre of Oragadam in Chennai. After coming under the wings of Mahindra & Mahindra, Ssangyong has again made an entry into the Chinese automobile market while its sales have gone up in good volume in the automobile market of Russia. The Korean firm is also in the process of setting up the factory in the BRIC nations with its first vehicle to be launched somewhere around Diwali this year.
A vehicle by Ssangyong on the Indian roads sound very goodas Asian technology has always been very well appreciated by the Indian customers. With a back up of Mahindra & Mahindra, with its R&D and widely available resources, the Korean auto company is sure to gain its lost position in the automobile industry as well as get itself into the top club of automobile firms across the world. The increasing number of wealthy Indians would be very keen on trying out the SUV of Ssangyong as it seems to deliver what the consumer demands and require.