SsangYong declares bankruptcy in Korea

SsangYong will continue to trade as usual, despite declaring bankruptcy in its home country of Korea.

The struggling carmaker, currently on the sales block after Indian owner Mahindra’s failure to turn the company around after a decade, has entered what the company is calling a “private rehabilitation program” that resembles an American Chapter 11 bankruptcy.

It’s designed to give the company a reprieve to find funding – or to finalise a new buyer – while it restructures its business.

“During this period, SsangYong Motor company, including the Australian subsidiary, remains fully operational, business as usual,” said Australian managing director Chris Mandile in a statement.

After a couple of false starts, SsangYong returned to Australia in 2018 under factory administration with a brace of new and renewed products, including the Musso ute and Rexton SUV.

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However, the range has dwindled to three cars – including its newest, the updated Korando mid-sized SUV – and while local sales in 2020 are up on those in 2019, its total number of registrations for 2020 will be eclipsed by just one month’s sales of Hyundai’s Tucson.

Despite having recently signed its 50th dealership, SsangYong’s Australian slump comes down to a lack of product; an updated version of the small Tivoli SUV has not materialised as promised back in 2019, while the Musso and Rexton are – despite competitive pricing and decent specs – underperforming.

Mandile said that the company will strive to avoid the next stage of proceedings for the company; voluntary administration.

“It is the intention of the company to use the three-month period of rehabilitation to avoid this,” read the statement.

“The company will also accelerate its efforts towards securing a deal with the interested new investor. Another step in the transformation and rebirth of SsangYong into a competitive company.

“SsangYong and the Korean Government is committed in making every effort to secure a viable future for everyone involved with this proud company.”