Just days after it acquired a majority stake in electric car maker Reva, utility vehicle and tractor major Mahindra and Mahindra (M&M) is on the hunt again. It is reportedly bidding for Ssangyong Motor Company, South Korea’s fourth largest auto firm — which is struggling with bankruptcy. Kolkata based Ruia Group, which owns Dunlop, is also in the fray for Ssangyong.
According to a South Korean newspaper, M&M has already written a letter to the company’s management seeking a majority stake in the firm. Apart from the factories and other assets, Ssangyong also owns hybrid car technology — which allows cars to use petrol and electricity for power and improve efficiency.
Toyota’s best selling model Prius is one of the better known hybrid vehicles. Other bidders for the Korean firm include Renault. Ssangyong, which makes cars and trucks, has been through a very rough patch over the past decade and a half, going through recievership, two takeovers and crippling strikes. It was first merged with the Daewoo Group in after the East Asian crisis of 1997, before being separated again.
Chinese auto firm SAIC had taken up a 51 per cent stake in Ssangyong in 2004. But SAIC has been charged with stealing Ssangyong’s hybrid technology by South Korean authorities. SMC employed a total of 4,821 people in March 2010. Its turnover for 2009 stood at $834 million and a net loss of $270 million. The debts of the company are over $200 million while net worth is completely eroded.
If M&M were to succeed in its bid for Ssangyong, its plans to scale up in the automobile space will get a major boost. In April, M&M had bought out its partner Renault from their joint venture in India, which manufactured the Logan sedan.
Earlier this week, it picked up a majority stake in Reva — the Bengaluru based electric car maker. Ownership of a company with a range of models and a strong technology base would be a big boost.