Mahindra Eyeing Separation From SsangYong

The homegrown carmaker is looking to dilute its stake in the struggling South Korean carmaker

• Mahindra is looking for buyers that can acquire its 75 per cent stake in SsangYong.

• Profits for SsangYong have been dwindling for a long time. 

• Dismal 2019-20 sales, BS6 transition and the sudden lockdown have added to Mahindra’s losses as well.

• Mahindra currently offers the SsangYong Rexton-based Alturas G4 and Tivoli-based XUV300.

• Mahindra’s upcoming mStallion petrol engine family has also been co-developed with SsangYong.

Mahindra is looking to sell its 75 per cent stake in SsangYong, a South Korean carmaker that it rescued from bankruptcy in 2010. Mahindra suggests reducing profits as the reason for this step. Rumours were already rife in the past couple of years but reducing sales in the past year, the BS6 transition and the abrupt lockdown have further bolstered Mahindra’s decision. 

Keeping the uncertain future in the sights, Mahindra has also decided to examine other subsidiaries, including its GenZe electric bicycle company in the United States of America. "SsangYong needs a new investor. We are working with the company to see if we can secure investment," Pawan Goenka told the media personnel. 

Mahindra and SsangYong in partnership have till now brought quite a few products to the Indian soil. These include the first-gen Rexton which was launched back in 2012, followed by the Alturas G4 (launched in 2018), which is technically the second-gen model of the same nameplate. Another offering is the Tivoli-based XUV300 that takes on the Hyundai Venue and Tata Nexon. 

The two have also worked on several engines including the direct-injection and turbocharged mStallion petrol engine family. One of them is the 1.2-litre turbocharged petrol with direct injection which powers the recently introduced Tivoli facelift overseas but will also debut under the hood of the XUV300 Sportz which is due for launch later this year. 

Mahindra had also signed a joint venture with Ford to spawn new engines and platforms for India. This meant the arrival of new rivals for compact SUVs like the Kia Seltos and the Hyundai Creta, along with mid-size SUVs like the Tata Harrier and MG Hector. An MPV and EV are also in the pipeline.  As for now, Mahindra continues its search to find a new investor to acquire its stake in SsangYong. Given the numerous projects that Mahindra and SsangYong have worked on, we expect them to continue collaborating in the future even if the latter has a new parent company.