(ATTN: ADDS ongoing effort to find new investor in last 5 paras)
SEOUL, June 19 (Yonhap) — SsangYong Motor Co. said Friday it has signed an initial agreement with Chinese carmaker Songuo Motors Co. to export its Tivoli sport utility vehicle.
Under the basic agreement, SsangYong Motor will deliver the Tivoli SUV in the form of knockdown units to Songuo Motors’ plants in China to be assembled into complete vehicles for exports to the Middle East and Africa from late this year, the company said in a statement.
Songuo Motors plans to develop its own vehicle based on the Tivoli platform through technological partnership with SsangYong Motor and produce 60,000 units of the model a year at its plant in the Shandong Province, it said.
SsangYong Motor aims to launch an all-electric SUV in the domestic market next year to strengthen its SUV-focused lineup.
From January to May, its sales fell 32 percent to 39,206 units from 58,030 in the same period a year ago.
The carmaker’s lineup consists of the flagship G4 Rexton, as well as the Tivoli, Korando and Rexton Sports.
In 2011, Indian carmaker Mahindra & Mahindra Ltd. acquired a 70 percent stake in SsangYong Motor for 523 billion won (US$437.93 million). Mahindra currently owns a 74.65 percent stake in the SUV-focused carmaker.
Mahindra & Mahindra announced in April that it is reevaluating its initial investment plan amid the coronavirus pandemic that has affected the whole automobile industry. It stated that it can help SsangYong find a new investor that can meet the company’s needs. The Indian company said that if a new investor is found, this will naturally lead to its stakes going down or to the selling of its shares to the investor.
Related to the efforts to find a company able to inject fresh funds, market watchers said that Geely Auto of China has shown interest, although nothing has been confirmed.
The Chinese carmaker owned by Geely Holdings Inc. already owns Swedish carmaker Volvo, but that deal did not permit technology transfers.
“If Geely invests in SsangYong, it may be due to its interest in the South Korean company’s SUV-making expertise,” a source claimed.
He said that besides finding a new investor, SsangYong needs to reorganize its business structure to make it more profitable and aggressively slash costs.
kyongae.choi@yna.co.kr(END)