Indian conglomerate Mahindra and Mahindra has decided to stop investing in its struggling South Korean brand SsangYong, as carmakers across the globe attempt to save money in an effort to overcome the current crisis.
Mahindra, who holds a 74.65% stake in SsangYong, has even asked the Korean brand to look for other means of funding, as COVID-19 restrictions in India have led to a massive dip in demand.
This announcement comes less than two months after Mahindra said it would invest $423 million in an attempt to make SsangYong profitable by the year 2022, reports Autonews Europe.
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“After lengthy deliberation given the current and projected cash flows, the M&M Board took a decision that M&M will not be able to inject any fresh equity into SYMC and has urged SYMC to find alternate sources of funding,” said Mahindra in a regulatory filing.
At the same time, the Indian company is willing to consider a special one-time infusion of up to 40 billion Korean Won ($32.34 million) over the next three months in order to help SsangYong continue running its business while it looks for alternatives sources of funding.
SsangYong had been planning on selling a fully-electric version of its Korando SUV in Europe this year. The model was supposed to show up at the Geneva Auto Show last month, but the event had to be canceled due to coronavirus restrictions.
The Korean carmaker was rescued by Mahindra from near-insolvency back in 2010, but has since failed to take full advantage of the situation.
