The Renault Nissan Alliance unexpectedly pulled out from the race to acquire Ssangyong Motor on Tuesday, making it a three-way competition among one Korean and two Indian firms.

As the deadline for final bids for the SUV specialist came on Tuesday, India’s largest tractor maker Mahindra and Mahindra, Indian conglomerate PK Ruia Group, and Korean hat maker Young An Hat, which owns Daewoo Bus, submitted their binding offers, sources told the Korea Herald.

The alliance had been considered the most likely candidate among the six preliminary bidders for ailing Ssangyong.

A Renault-Nissan spokesman confirmed to Reuters that the alliance had not made a bid in the end.

The news agency said the decision suggests the alliance would look for another way to increase production capacity in South Korea, either through expansion of its existing Renault Samsung plant or a greenfield investment.

"We will review other options for our capacity requirements in South Korea," the spokesman said.

Sources told the Korea Herald that one or more preferred bidders could be named as early as this week as the company hopes to wrap up the sale before the end of the year.

Ssangyong said earlier that the selection will be made before the end of the month.

Ssangyong, which went into court receivership last February, has been looking for a new majority shareholder since May.

The company had set the deadline for binding bids on 20 July but the date was pushed back at the request of some of the bidders.

For Mahindra and Mahindra, gaining control of Ssangyong would be an opportunity to gain access to advanced technologies needed to expand its presence in the SUV market.

PK Ruia Group wants to add automobile manufacturing to its business portfolio that currently includes tyre and auto parts.

Young An Hat wants to boost its presence in the automotive market and enter passenger vehicles. Its affiliate Daewoo Bus sold about 1,300 vehicles taking 0.2% of the domestic market during the first seven months of the year, according to the Korea Automobile Manufacturers Association. Adding Ssangyong to its portfolio would increase the share to over 2%.

Local media projected that a successful bidder would acquire new shares, the number of which will match the currently issued 36.12m, putting estimates upwards of KRW500bn (US$428m).

Ssangyong shares closed at KRW15,200 on Tuesday, up 0.33% from Monday, pushing up market capitalisation to about JPY550bn.

In addition, those acquiring the carmaker will have to raise additional funds to repay Ssangyong’s debts, which stand at about KRW760bn.