It needs to be a win-win situation. This deal is surely going to do good to both parties. Yes, we are referring to yesterday’s Ssangyong-Mahindra bid play. Here’s more on the matter!
Mahindra & Mahindra Ltd., India’s #1 utility vehicle manufacturer was announced yesterday as the preferred bidder for the acquisition of a majority stake in ailing South Korean SUV maker, Ssangyong Motor Company (SYMC). The newly acquired preferred bidder status would require M&M to enter into a Memorandum of Understanding with Ssangyong, followed by a detailed due diligence process.
The Korean Ssangyong has 7 models under 5 brands in its name. As everybody thinks, Ssangyong is not really an ailing auto maker filled with gloom. Its line-up includes 2 large-sized sedans, 4 SUVs and 1 MPV. That’s not all. It also possesses the asset of a gasoline and diesel engine and axle manufacturing plant. Ssangyong has achieved quite a lot in the Korean SUV segment and has hit the record of hitting sales numbers of 1.3 million SUVs from 1990 to 2009.
Established in 1962, Ssangyong has earned for itself quite a good reputation in Europe, Russia, South America, the Middle East, Africa and Asia as well. The auto maker has over 1,200 dealerships worldwide. The company has R&D manpower strength of nearly 600 people and state-of-the-art R&D infrastructure for design, testing and validation.
On the other hand, Mahindra and Mahindra which went on board in 1945 by assembling the Willys Jeep is currently a U.S. $7.1 Billion Indian multinational employing over 1,00,000 people worldwide. The auto maker has a presence in nearly every segment of the automobile industry, from two-wheelers to CVs, UVs, SUVs and sedan. The company recently got the REVA Electric Car Co Ltd. in its stride. The Mahindra Group which is now a personification of global excellence needs no more introduction.
Yesterday’s strategic acquisition, once completed is possibly going to make Mahindra and Ssangyong a real tough competitor to contend with in the global SUV space. The plans, as of now, would allow Ssangyong to continue functioning as an independent entity with Korean management. “Korea is one of the world’s leading centres of automotive excellence and Ssangyong brings with it a rich legacy of R&D and innovation. Mahindra and Ssangyong will create synergy, which will make us significant global players,” said Mr. Anand Mahindra, Vice Chairman and Managing Director, Mahindra Group.
“Ssanyong has very strong competencies and capabilities in technology. We are committed to leverage this competency by investing in a new Ssangyong product portfolio to gain momentum in global markets,” said Dr. Pawan Goenka, President, Automotive and Farm Sector, Mahindra & Mahindra Ltd.
There are a few very strong aspects in the combined portfolio of products of the two auto makers that provide an opportunity to create distinct positioning. The extensive sales and supply networks and corresponding product inventories may help both Mahindra and Ssangyong access many overseas markets. The Indian car market may also get a shot in the arm with the introduction of a premium portfolio of SUVs providing a fresh growth path for Ssangyong and further strengthening Mahindra’s leading position.
