Market Insight: Two dragons walk the tightrope

FEW car companies have walked the tightrope of viability across a windy chasm and remained as upright as SsangYong.

 

The Indian-owned South Korean car-maker that once used drivetrains licensed from Mercedes-Benz has been in a tizz for two decades in Australia since launching in 1997 with a single model, the Musso large SUV.

 

Now it looks like Mahindra, which bought 70 per cent of SsangYong in 2011 before upping the stake to its current 74.65 per cent, has sold off its shareholding after enduring a decade of court receiverships in 2009 and 2020, as well as relentless investment demands.

 

But even the saviour to Mahindra and to SsangYong itself, HAAH Automotive Holdings, swims in swirling waters.

 

HAAH failed to meet a March 31 deadline to make its bid for SsangYong and then last week said it would file for bankruptcy and “give up on Chinese cars”, a reference to its attempt to import Chery cars from China for the North American market.

 

Now to muddy the waters even further, HAAH boss Duke Hale has announced his new company, Cardinal One Motors, will buy SsangYong with plans to get that brand into North America. So farewell HAAH and hello Cardinal One.

 

So although Cardinal has yet to submit its documents to the courts in South Korea to extract SsangYong from court receivership, there is a bit of optimism at SsangYong.

 

This is enforced by a rendering of a new SUV, the X200, that is the product of SsangYong’s new design theme ‘Powered by Toughness’. It follows from the recent announcement of an electric version of the Korando small SUV.

 

SsangYong – which means two dragons – is also selling the farm, with its factory finding a new owner as the car-maker begins relocating to a new site.

 

The factory in Pyeongtaek, 70km south of South Korean capital Seoul, coves 850,000 square metres and has been sold for $US786 million ($A1.07 billion), said The Korea Times.

 

Meanwhile, in Australia, it’s business as usual. SsangYong has run its Australian operation since 2018 after previously using an independent distributor.

 

The car-maker entered Australia in 1997 with the Musso and found some success with buyers interested by its tough, no-nonsense design and the Mercedes-licensed engines. In 2002 it had the Rexton 4WD, with the range expanded in 2004with the Jeep-like Korando and Stavic people mover

 

SsangYong’s products had become run down in 2003 and 2004 but new models built volume up in 2005, with 2645 units finding buyers. This is a sales figure that has never been repeated in Australia, though some optimism exists that it could be surpassed this year – ironically the year where all SsangYong’s woes may have come to a head.

 

The 2005 model line-up that prompted the sales consisted of the luxury Chairman, which was a Mercedes S-Class clone, the Korando, the Musso in 4x2 and 4x4 versions the Rexton and the Stavic, a vehicle that was as divisive in its styling as it was impressive in its cabin spaciousness.

 

This six-model line-up grew to 10 by 2007 with the addition of three variants of the small SUV, the Actyon, but sales did not rise in proportion, with the year ending at 2123 units sold.

 

In 2009, as the world was hit by the global financial crisis (GFC) that pushed SsangYong to its first court receivership, Australian sales halved to 1054 units.

 

During the lead-up to SsangYong taking factory control of its distribution in Australia, the brand was almost non-existent in 2018 with just three sales for the calendar year.

 

New models, including all-new Musso and Tivoli small crossover, revived buyer interest so that in 2020, sales rose to 1751.

 

The rebound from the 2020 pandemic lockdowns has benefited the car industry and SsangYong is no exception. In the first six months of 2021, SsangYong has sold 1421 units, a rate of about 250 a month, and on that projection it should finish the year at 2920 units – its best year yet if attained.