The company, which owes 315.3 billion won ($A365.2 million) to financial institutions, passed one of its payment deadlines in April and its major shareholder, Mahindra, failed to find a buyer.
But despite the gloomy outlook, SsangYong Australia’s PR manager John Taylor said it was business as usual in Australia and pointed to a strong 154 percent sales leap this year, albeit from a low base.
“The South Korean court-led process protects the company while allowing it to trade,” he told GoAutoNews Premium.
“It is similar to the US Chapter 11 bankruptcy process. SsangYong is working on restructuring which it believes is necessary to make itself more attractive to a buyer.
“The restructure includes efficiencies and reducing outgoings including looking at the number of employees.
“For us, that’s a good thing and we are hopeful of a positive outcome.”
Mr Taylor said the factory continues to produce vehicles and, in Australia, will launch a model update for the Musso later this month.
The company also welcomed its 50th Australian dealer late last year.
Mahindra, which bought a 70 per cent share in SsangYong in 2011 for $US463.6 million ($A599m) and saved it from becoming bankrupt, has been trying to sell its stake – now 75 per cent after an increase in 2019 – since late 2020.
SsangYong announced its first profit in 2016, its first in nine years, and produced more than 131,000 vehicles in 2017 – its highest output since 2003.
But the sales have not been enough to cover costs. Earlier this year, Reuters reported that SsangYong owed about 30 billion won ($A34.7m) to the Bank of America, 20 billion won ($A23.2m) to JPMorgan Chase & Co., and 10 billion won ($A11.6m) to BNP Paibas.
In response, the company said in a statement: “SsangYong Motor applied for the court receivership procedure as a massive disruption in the operation is expected after the company could not reach an agreement to extend its loan repayment deadlines with foreign banks.”
SsangYong sales fell 20.5 per cent globally in 2020 compared to 2019 and slipped 25 per cent on the 143,309 units sold in 2018.
In Australia however, the brand shifted 1751 units for the year in 2020, marking a 68.4 per cent increase compared to 2019.
So far in 2021, sales are up 154.2 per cent to the end of May compared to the same period last year.
SsangYong said late last year that it was in talks with US-based HAAH about a possible investment.
HAAH Automotive Holdings, which imports cars into the US on behalf of offshore OEMs and is currently in a joint venture with China’s Chery for utes and SUVs, appears not to have pursued the talks with SsangYong.
By Neil Dowling