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In a dramatic development in SsangYong’s struggle to stay afloat, a new US-based company is looking to raise funding from dealers to rescue the South Korean brand.
The news comes as SsangYong last week unveiled a radical plan to idle its workforce and sell its only vehicle assembly plant in Pyongtaek in order to stay afloat and re-equip its production lines for an electrified future.
The US rescue plan isn’t entirely new, with the new company, Cardinal One Motors, rising from the ashes of a now-bankrupt HAAH Automotive Holdings, which previously failed in a bid to import knock-down kits of Chery vehicles from China and assemble them in America.
HAAH’s directors claim the company failed due to brutal import tariffs on Chinese products imposed by previous US president Donald Trump’s administration and continued by his successor.
HAAH was already considering a bid for SsangYong prior to its bankruptcy, but this plan has become the sole focus of the newly formed Cardinal One Motors.
The company plans to raise between $US250-350 million for its bid to rescue SsangYong, which was dumped by its former owners Mahindra and Mahindra after continuous losses. It is estimated that SsangYong’s operating loss for 2020 was over $US400 million.
Cardinal One hopes that if it can raise enough money to acquire SsangYong, the Korea Development Bank will help to stump up additional funding. The brand’s 4500-strong Korean workforce is on the line.
Acquisition by Cardinal One would give economies of scale to the ailing Korean brand, as it would grant it access to the huge North American marketplace, facing little readjustment as its native South Korea is already a left-hand drive market and its vehicles are already localised to the UK and Australia. A free-trade agreement also exists between South Korea and the USA, further improving prospects.
The brand’s currently-combustion-heavy portfolio - which tips toward its Rexton large SUV and Musso ute - are more suited to America’s consumer profile and lax emissions standards than the Eurozone in which it has tried to compete in the past.
SsangYong claims the move out of its original factory it has occupied for 42 years will help speed up its move toward electrification, and says its second all-electric model (suggested to be a ute and SUV based on the J100 concept) will be released “sooner than expected.” Its first EV, the Korando e-Motion, was originally planned to launch in Europe before the end of the year.
Should the acquisition be successful, would SsangYong move away from right-hand drive production? Its presence in Australia, India, and the UK would not suggest so, but time will tell in this rapidly evolving saga.