Losses widened at SsangYong Motor in 2019SsangYong Motor’s operating loss grew dramatically in 2019 due to sluggish exports and high marketing costs in a fiercely competitive market.
In an earnings announcement on Friday, the company reported an operating loss of 281.9 billion won ($236 million), compared to 64.2 billion won in 2018. Last year was SsangYong’s third consecutive year in the red.
Annual revenue for 2019 was 3.62 trillion won, down 2.2 percent. The carmaker sold more than 100,000 units domestically, led by the new Korando SUV, but failed to generate demand overseas. Global unit sales declined by 5.6 percent in 2019.
The last time SsangYong achieved a profit was in 2016, when the Tivoli enjoyed success, but it lost money again the following year.
The company faces a difficult year ahead. It doesn’t have plans to release new models in 2020 and is seeking bank loans to finance its growth.
Last month, the carmaker’s parent company Mahindra & Mahindra said it will invest 230 billion won in the company if the board approves.
During a meeting with SsangYong employees in January, the Mumbai, India-based company’s Managing Director Pawan Kumar Goenka said the company would need 500 billion won over the next three years to return to black. The rest will have to come from other sources, including SsangYong’s main bank, the Korea Development Bank (KDB).
The bank has yet to announce its participation. According to local reports, the KDB has asked Mahindra and SsangYong to come up with a concrete plan for a turnaround.
The local carmaker stressed Friday that its “labor and management have joined forces in order to strengthen the company’s competitiveness.”
BY SONG KYOUNG-SON [email@example.com]