Renault and Indian SUV maker Mahindra & Mahindra have made separate bids to take over troubled South Korean SUV manufacturer Ssangyong Motor, according to local reports.
A total of seven domestic and foreign firms are understood to have submitted letters of intent in time for Friday’s closed auction deadline. Shares in Ssangyong, which is 10% owned by China’s SAIC group, rose by their 15% daily limit in response to the unexpectedly strong interest, valuing the company at KRW455 billion (USD370m).
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The Renault bid is understood to have come directly from Renault-Nissan, rather than through Renault’s local carmaker Renault-Samsung.
Mahindra & Mahindra would gain valuable vehicle manufacturing technology from Ssangyong, as well as helping to expand its global footprint.
The deadline for binding bids is July 20 and a preferred buyer is expected to be selected by August. A deal with a foreign manufacturer would mean greater competition at home and abroad for Hyundai-Kia in the lucrative SUV segment.
Ssangyong aims to double vehicle sales to 85,000 units this year, helped by the launch of a new compact SUV – the C200. By 2013, it plans to sell over 180,000 units – with expansion into new markets in Asia and eastern Europe.
Production of the RAV4-sized C200 in Korea is scheduled to begin in July, with Korean market sales commencing in August. The new model, which was under development well before the firm went into bankruptcy in Korea early last year, comes with high hopes and is being seen as likely to play a crucial part in Ssangyong’s future recovery under a new owner.
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