AutoBeta(AutoBeta.net)12/22 Report--

In the shrinking environment of the global auto market, many car companies on the edge of the market are heavily in debt to choose bankruptcy plans because of poor management. South Korean car company Ssangyong Motors is in the same state and has filed for bankruptcy with the Seoul court, according to media reports.

South Korea's Ssangyong Motor Company, which is in a liquidity crisis, applied for legal restructuring on December 21, and Ssangyong submitted an application for starting the reorganization process and an application for property preservation to the Seoul Rehabilitation Court in the afternoon, Yonhap news agency reported. At present, the Seoul court will review and review the bankruptcy application and related documents submitted by Ssangyong Motor to determine whether the court will begin the reorganization process of Ssangyong Motor.

It is worth noting that this bankruptcy reorganization application is another application of Ssangyong Motor following the global financial crisis in January of that year, 11 years apart.

In 2010, Indian car giant Mahindra&Mahindra (Mahindra) paid 522.5 billion won for a 70 per cent stake in Ssangyong Motor, rescuing it from the brink of bankruptcy, making Ssangyong now a subsidiary of the Mahindra Group, which owns nearly 75 per cent of the shares, but has failed to help it turn a profit after several efforts.

Since Maheng invested more than $110 million in Ssangyong Motors, Ssangyong made a net profit of 58 billion won in 2016. Since then, Ssangyong has been struggling with a net loss of 66 billion won, rising to 62 billion won in 2018 and then rapidly expanding to 341 billion won in 2019.

As a result, the company was unable to repay 165 billion won (980 million yuan) after 15 consecutive quarters of losses. In April, Mahindra directors refused to inject any new investment into Ssangyong and were willing to give up control of the Ssangyong car and have been looking for a suitable buyer. Although Ssangyong has applied for a court takeover, the business of selling Ssangyong can continue.

Data show that Ssangyong Automobile, founded in 1954, is a well-known car company in South Korea, mainly manufacturing four-wheel drive cars, and producing large passenger cars, special vehicles, automobile engines and spare parts. Its main model is SUV, which is exported to more than 60 countries and regions, including Europe, Asia, Central and South America and Africa.

Ssangyong Motor first entered the Chinese market in 2001 and established Shenzhen Ssangyong Automobile sales Co., Ltd. The first batch of multi-purpose all-wheel drive off-road models Rexton sold in China were imported, but because the price was as high as 480000, almost no one was interested. That's why Ssangyong suffered an economic crisis and was acquired by SAIC and eventually became the largest shareholder with a 51.33% stake.

After SAIC's acquisition, Ssangyong began to introduce more models to carry out business in the Chinese market, although it has achieved good development with the help of SAIC.

Because of the problems of capital and company structure, Ssangyong Motor has turned to work with Giant Automobile Trade Group Co., Ltd., the largest car dealer in China, to sell Ssangyong's models in the Chinese market through pure imports. Ssangyong has also helped Ssangyong expand its sales volume. The number of vehicles exported to China will greatly expand from 15000 to 40, 000 each year, and the number of sales outlets will increase from more than 130 to about 200. The good times didn't last long, Ssangyong began to lose its edge in China, and sales fell to only 2460 units in 2015, eventually withdrawing from the Chinese market.

Some people in the industry believe that the failure of Ssangyong is not only a lack of core technology, but also a lack of comprehensive competitiveness in many aspects, even in appearance design, it also gives people a subjective feeling of "ugliness", perhaps because of the lack of design funds. Although Ssangyong has performed well in the Korean market, for other Korean car brands except Hyundai Kia, the lack of product and brand competitiveness is the fundamental reason that restricts its development, which is also the root cause of Ssangyong's failure.

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