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Cash strapped SsangYong Motor has said it wanted to re-engineer its business with a strengthened self rescue plan to return to profitability.

Mahindra and Mahindra’s South Korean unit – which held two rounds of negotiations with its labour union last year – has been focusing on normalising its business, The Korea Herald reported.

To improve its financial health, workers have agreed to reduce or stop 22 welfare benefits such as support for medical cost and tuition, a sabbatical year for those who worked for at least 25 years and return of annual bonus. 

The company said up to 90% of its employees had agreed to participate in efforts to improve operations, financial status and secure competitiveness for future business. 

Hit by the latest outbreak of COVID-19, the company’s sales have worsened, the newspaper said.

In February, sales dropped 27.4% year on year to 7,141 units, due mainly to the sluggish domestic auto market, shortages of parts such as wiring harnesses and weeks long suspension of manufacturing. 

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By GlobalData

SsangYong Motor told the Herald it was partnering strategically with its parent company to develop new vehicles through mutual sourcing and sharing platforms to minimise investment risks, as well as create synergies. 

Earlier this year, the report noted, M&M managing director Pawan Goenka visited Seoul to meet employees and stressed the role and responsibility of the Indian company as the largest shareholder to normalise operations.

Despite a difficult business situation for automakers globally, it had recorded sales of over 100,000 units annually for four consecutive years since 2016.

Its flagship Rexton Sports SUV logged annual sales of 40,000 units for two years. Launched in 2018 January, the model has led Ssangyong domestic sales since its launch. The automaker launched a long body model, the Rexton Sports Khan, last year. 

Along with self rescue plans to secure competitiveness, the automaker told the Herald it would launch Korando and Rexton Sports SUVs in Europe to raise brand awareness and expand sales.

“The company’s self rescue plan to create new opportunities will work as an impetus for all employees and become a foothold to make sustainable business growth. We will put all our efforts to focus on securing competitiveness to overcome the crisis as soon as possible,” an official told The Korea Herald.

Virus causes South Korean automakers’ sales to tank in February