SsangYong is struggling and hopes to receive a substantial investment from major shareholder Mahindra & Mahindra. However, that investment will not be made for the time being, because Mahindra & Mahindra itself must also tighten the waist belt.
It does not really want to go smoothly at SsangYong and so it was good news for the South Korean brand that the Indian industrial giant Mahindra & Mahindra took over 70 percent of the SsangYong Motor Company (SYMC) last year. To give SsangYong a big boost, an investment of no less than € 375 million was in the offing. With that amount, Mahindra & Mahindra wanted to transform SsangYong into a profitable brand over the next three years, but that may now blow for the money. This is evident from an official statement from M&M.
The intended investment has recently been scrutinized by the Mahindra & Mahindra board as the corona crisis hits hard in homeland India. According to the company, it is therefore not now responsible to make this investment. “After a long assessment of the current and future cash flow, the board of M&M has decided that it is not possible to make a new capital injection in SYMC. SYMC is asked to search for alternative sources of income itself,” they say. To compensate the South Koreans to some extent, a one-off € 30 million will be invested in SsangYong over the next three months.