Edison Motors Company, the company poised to take over Ssangyong Motor, said it expected to turn around the bankrupt South Korean SUV maker within three to five years by focusing on electric vehicles (EVs).
The EV manufacturer, based in Hamyang in southern South Korea, is leading a consortium that includes Korea Corporate Governance Improvement (KCGI) fund, Keystone Private Equity and Semisysco, to take over Ssangyong.
According to local reports the consortium submitted a KRW200bn (US$170m) bid in August that was recommended for approval by Ssangyong’s court-appointed administrator last week.
A memorandum of understanding was expected to be signed by Ssangyong, its administrator EY Hanyoung and Edison Motors by the end of October. This would be followed by two weeks of due diligence in November before a final deal was signed to take over the company.
Ssangyong’s Pyeongtaek plant had three vehicle assembly lines with a combined annual production capacity of 300,000 units on three shifts. The No 2 line had been idle since February 2019, when the automaker axed the Chairman sedan and the Turismo SUV, while the other lines were currently operating on single shifts. Ssangyong sales in the first nine months of 2021 fell by 17% to 61,854 units.
Edison Motors chairman Kang Young-kwon told local reporters: “To achieve our turnaround plans we will resume full operations on three shifts at Ssangyong plant in the coming years, to produce existing combustion engine vehicles as well as battery powered and hybrid models.”
Following the acquisition of Ssangyong, Edison Motors said it aimed to produce between 300,000 and 500,000 vehicles annually in Pyeongtaek, including 200,000-300,000 combustion engine vehicles, 100,000-200,000 all electric vehicles and 50,000 hybrids.
Reports last July suggested Ssangyong had agreed to build a new plant in Pyeongtaek dedicated solely to EVs, with the local city government offering to provide administrative support for the process of building and relocating to the new plant. The existing plant would be sold back to the Pyeongtaek government to generate funds.
Edison Motors has two plants in South Korea, in Hamyang and Gunsan, with annual production capacity of 63,000 electric buses and trucks and 1,500 compressed natural gas buses.
The company said it planned to produce 10 new EVs at Ssangyong factories by 2025 and 30 by 2030, adding this meant it would need to retain all of Ssangyong’s current production staff.
Edison Motors said it aimed to raise KR1.5trn (US$1.27bn) from strategic and financial investors to fund the takeover of Ssangyong and to invest in the business. It also had plans to build EV operations in India, Europe and the US in the long term.