Mahindra & Mahindra, the utility and tractor vehicle maker, has completed the process of acquiring a majority stake in the South Korean auto company SsangYong Motor Company (SYMC), it stated today.
M&M, leader in the sports utility vehicle (SUV) segment in India, said SYMC is no longer in court receivership. M&M will hold 70 per cent in the SUV-making company.
It has also committed to invest KRW (Korean won) 200 billion (about Rs 800 crore) towards SsangYong’s product development programme, an increase of 70 per cent compared to last year, when the troubled company was under court protection.
M&M agreed to buy stake in loss-making SsangYong in November last year for $464 million (Rs 2,083 crore) after the Mumbai-based company emerged as the preferred bidder among a clutch of entities, including Renault, Nissan, the Pawan Ruia group and a few private equity companies.
“This marks the beginning of a new journey for SYMC and will also pave the way for both Mahindra and SYMC to emerge as a strong force, allied together in the global passenger vehicle industry through their strategic partnership,” the release said.
Yoo-il Lee, will be the new chief executive of SYMC, while Dilip Sundaram from Mahindra will be the new chief financial officer. The names of the new board of directors of SsangYong Motor Company were also announced.
Pawan Goenka, president, automotive and farm equipment sectors, M&M, said in a statement, “Mahindra was extremely conscious of SYMC’s Korean heritage and would only want to enhance it. SsangYong will be an independently run Korean company, with largely Korean management and will remain a ‘Made in Korea’ brand.”
M&M aims to tap the R&D and innovation pool of the South Korean company for its own growth. The two companies will share product development programmes and platforms for Indian and world markets.
It plans to launch SsangYong branded SUV’s such as Rexton and Korando-C through the completely knocked down kit route. It is setting up an assembly line at Chakan near Pune for the purpose.