[arvindmanju]

Originally Posted by RemingtonSteele

MUMBAI (Reuters) - Indian automaker Mahindra & Mahindra will invest $423 million to turnaround its struggling South Korean unit Ssangyong Motor Co and make it profitable by 2022, a senior company executive told reporters in Mumbai on Tuesday.

I think the pandemic has changed the scenario, Mahindra looking to let go Ssang Yong against previously announced investment plan.
Source Reuters

Indian automaker Mahindra seeks to give up control of struggling unit SsangYong

“SsangYong needs a new investor. We are working with the company to see if we can secure investment,” Pawan Goenka told reporters.

“If a new investor comes on board, that automatically takes our stake down, or they may even buy our stake,” Mahindra’s deputy managing director, Anish Shah said.

[motorworks]

Mahindra seems to have got most acquisitions and partnerships wrong. Just look at what they have done over the years, Ssangyong, Kinetic, Pininfarina, and Reva were all acquisitions.

With Ssangyong, neither were they able to turn around the domestic sales in South Korea and nor were they able to capitalise on this in India. Just the one car XUV300 supposedly developed along with Ssangyong.
Then with Kinetic, Mahindra is no where in the two wheeler segment, so clearly nothing came out this. And Reva, this might benefit them in the long run, but did they have to buy Reva to get electric technology? Tata has moved faster in this segment without any serious acquisition in this space, in fact they have an affordable road car in the form of Nexon already, whereas Mahindra, even though they had head start with Reva, are still not in the scene. And with Pininfarina, I dont know if they are treating like an independent business entity, but it just doesnt seem to help their core business.

Apart from acquisitions, their partnerships and other ventures are also questionable. They entered the Truck business thru Navistar, and here again i dont think they have made steady inroads. This is still dominated by Tata, Eicher and even Bharat Benz seems to have gained decent market share although its relatively new. Other failed partnerships are with Ford in the 90s, then with Renault and once again we have a Ford partnership which hasnt really taken off so far.

[MaserQ]

Now that the tech transfer has happened for the current generation of Mahindra vehicles (and the ones under development), they can safely ditch SsangYong and go back to piggybacking on Ford technology for their next generation of vehicles.

[Aditya]

Mahindra looking to let go of SsangYong - Posts moved to a new thread.

[The Rationalist]

Originally Posted by MaserQ

Now that the tech transfer has happened for the current generation of Mahindra vehicles (and the ones under development), they can safely ditch SsangYong and go back to piggybacking on Ford technology for their next generation of vehicles.

Was the investment worth the technology transfer, that too from Ssangyong? I don’t know what kind of technology would be such an investment! Mahindra was trying to bite more than they could chew, that’s it. They realised it and are making amends I think. It’s a good thing that they are trying to do course correction. I wish they had made an association with Mazda and brought us some models. Or still better would be FCA

[padmrajravi]

I never understood the rationale behind the ssangyong acquisition. They are not masters of anything. They don't have the global recognition as well. And Korean market is anyway dominated by Hyundai-Kia. So the ambition to get profits from Korean market to break even the acquisition cost was also far fetched.

Mahindra had already launched XUV500 before the acquisition. When you already know how to make a capable car like XUV and make it a big success, why do you need technology transfer from a ailing debt ridden company? At best they may have got some benefits in component pricing because of Ssanyongs global volumes and synerges. That does not look like a well spent 2100 crores.

[JojyKerala]

I believe Mahindra's acquisition of SsangYong was its baby step towards becoming a global conglomerate.

After Mahindra acquired SsangYong around 10 years ago, the Korean manufacturer actually did quite well domestically. The partnership saw the launch of Tivoli 5 years ago and it was a success domestically (in Korea) and elsewhere.

Apart from sedans, all of SsangYong's models are still operational in South Korea and other parts of the globe. This includes Rexton, XLV and Korando. This is apart from their vans and trucks.

Correct me if I am wrong but SsangYong still probably ranks among the top 5 South Korean manufacturers by sales in that country and all credit goes to Mahindra for bringing the brand back from financial extinction.

The pandemic has changed priorities for a lot of businesses and I look at this step by Mahindra as a reflection of that priority.

[shreevishnu]

This looks like modern day technology asset stripping. Ssangyong was prime for culling, SUV specialist with competitive tech - a good place to base next gen of vehicles.
Soon to be launched Mahindra XUV 500 replacement is Ssangyong Korando, XUV 300 is Tivoli, infact even a 7 seat version of the Tivoli exists in Korea. Given the age of these products (Rexton included) in Korean domestic market, significant new investments are needed to remain competitive.

After the Logan JV debacle with Renault, not too many partners looking to work with Mahindra.

Now though, with access to Ford Tech,they find no use of Ssangyong.
Additionally, inherently loss making Korean domestic operations will be cash drain in the Covid induced recession scenario.

Time to let them out to dry & move on. Good for Mahindra share holders right now.
I wonder who else will partner with them again now. (Ssangyong & Mahindra both)

[Chetan_Rao]

We're going to see a lot of backing out of bad decisions blamed on 'challenging market situations due to COVID' in the near future.

[SmartCat]

In hindsight, Ssangyong looked like a good acquisition. There is shared SUV heritage between the two brands. Possibilities included shared R&D costs, development of new engines & chassis, introducing all Ssyangyong models in India, access to Ssyangyong dealers in Europe & Asia for selling Mahindra products and so on.

In this environment, I wonder if Ssyangyong will get a new investor who is willing to take majority stake in a struggling automaker. Looks like Ssyangyong will go the Daewoo way.

[kamilharis]

SsangYong was a good buy by M&M but they failed to capitalize on it properly. SsangYong even has presence in the Middle east countries but I couldn't notice any sincere effort from M&M to push them here further. If Kia & Hyundai can grab this market , definitely SSangYong could do at least 20% of what their Korean competitors does!! By the way for the first time I have spotted our beloved XUV 5OO being displayed outside their Truck/Pickup showroom here in Saudi Arabia.


We might see many more sales, purchases, firings etc from all the fields in the name of dear Covid-19. In some cases it might be true but some might use this is a good opportunity to impose their new business plans without not being blamed.

[anjan_c2007]

Miscalculations from the top management there comes full circle ! Mahindra, as other friends have pointed out takes some hare-brained, rash and foolhardy decisions on many occasions, landing itself in a soup. The fact remains that the Bolero and the Scorpio and the tractors are Mahindra's bread and butter. The few other successful models with the last letter as "O's" and some flops also with "O's" are for us all to reminisce and adjudge. It has miserably failed to make good sales and profits in the two wheeler segment and quite a few of its four wheeler launches have flopped.

Another shocker has come from the International Trade Commission (ITC) today, based on a plaint filed by Fiat Chrysler Jeep, that has restrained Mahindra from selling the Roxor in the US. The Roxor launched with fanfare was manufactured in Auburn Hills, Michigan, with 50 % of its spares sourced from India. They tried to circumvent the Jeep design infringement, with some cosmetic changes but the court is not convinced.

The point is that their two major bread earners viz. Bolero and Scorpio are ageing and look much dated. How long will these two sustain such misadventures and miscalculations by Mahindra is a point to reckon with? Their tractor sales are also quite profitable though - Touchwood ! The recent Q 4 reported Rs 3,255 crore losses on a write down of SsangYong is perturbing. And given the pandemic, it's effects and its effect-hangover, sales of motor vehicles are not likely to gain a good pace in the next one year at least !

The SsangYong factor:-

https://www.moneycontrol.com/news/bu...t-5396011.html

[RavenAvi]

Originally Posted by landcruiser123

Can anybody with throw more light?

As per Autocar Professional's recent interaction with Dr Pawan Goenka, MD, Mahindra & Mahindra:

Offering an insight into what went wrong with SsangYong, Dr Pawan Goenka, MD at M&M, pointed out that its Korean subsidiary was actually going quite well till the first half of 2019 and was in fact expected to make an operational breakeven in CY2019.
However, circumstances began to change thereon with the second quarter witnessing rapid reverse in fortunes with global economic slowdown in the backdrop. Further, around the same time, the Korean automotive market began shifting rapidly towards petrol from diesel engines. The trend impacted the company as SsangYong, similar to M&M, had a very large portfolio of diesel vehicles.
Additionally, one more reason for SsangYong's dwindling fortune was that there was significant reduction in exports to 4-5 top markets such as Iran, Chile, Egypt and Western Europe due to geo-political dynamics.

This is their strategy for FY2021:

Reduction in investments in the next 3 years, close monitoring of other subsidiaries and concentration in the domestic market will be at the top of the list for M&M.

[GTO]

Originally Posted by motorworks

Mahindra seems to have got most acquisitions and partnerships wrong.

100% with you there. Mahindra wants to do "everything", but ends up doing "nothing" well. Quoting two relevant posts from other threads:

Originally Posted by GTO

Mahindra really, really needs to focus. Classic example of a company trying way too new businesses, but excelling in hardly any of them.

Scooters = Flop
Motorcycles = Flop
Buses = Flop
Trucks = Flop
Reva Electric Cars = Flop

And

Originally Posted by GTO

Takes a big man to admit it so publicly.

The problem with Mahindra is, they want to do everything, and then end up doing nothing really well. So many of their businesses are failures = two-wheelers, commercial vehicles, they have something going on in marine and what not.

Entering segments for the heck of it spreads them too thin. Case in point = Marazzo. SEXY car, so sorted that I found it hard to believe it's a Mahindra. Looked at its sales recently? Barely selling 1,000 units / month (and not even that in some). The car is largely ignored by the senior management who are busy fanning other fires. They simply have no time for the Marazzo.

Instead, it'll be better if Mahindra does just a few things, and does them EXCEEDINGLY well.

What Mahindra really needs is razor-sharp focus!

[Sebring]

Apart from the Korean car companies, who else could be interested in a SsangYong? This is where Brand name is very important. Can't stress on it enough. For example if Tata were to let go of the Jaguar part only, they will certainly have suitors. So it does look like they're stuck, (for now). Wonder who advised them! In two-wheelers, Jawa is a saving grace. If you were to ask me, Mahindra should also look at Bicycles (that's the future, both motor and the pedal versions) so as to complete their mobility portfolio.