Ssangyong post record half-year sales in 4 years

Driving on good growth in sales volume, the Mahindra & Mahindra owned Ssangyong Motor Company posted KRW 1,349.2 billion during the January-June period, a growth of 43 percent over the same period last year. Ssangyong Motor sold a total of 55,873 vehicles (including CKD shipments) in the first half of 2011, recording a 53 percent increase over the same period of last year. Of these, 20,246 vehicles were sold in South Korea and 35,627 vehicles (including CKD shipments) were exported. This is the highest level of sales volume achieved in a half year period since 2007.

The sales volume in the second quarter of 2011 was 31,132 vehicles, a growth of 45 percent over the corresponding period of the previous year. This was the highest quarterly sales volume achievement since the third quarter of 2007 and the highest export volumes in the history of the Company. Revenues in the second quarter were at KRW 729 billion, a growth of 35 percent. The volume growth was attributed by the Company to the successful launch of Korando C in South Korea and continued strong demand for it and other models in export markets. The Company has also achieved the highest level of export volumes in a quarter in the second quarter of 2011.

The Company exited court receivership in March 2011 and in order to recognize the contribution of its employees’ efforts it provided a one-time bonus and signed a new wage agreement thereby increasing salaries and wages from April 2011. Increased material costs due to the sharp increase in commodity prices and the appreciation of the South Korean Won against the US Dollar along with the employee related cost increases resulted in an operating loss of KRW 75.3 billion in the first half of calendar 2011, against the operating loss of KRW 48 .1 billion over the same period of the previous year. Higher revenue expenditure for new product development and costs related to launch of new products also contributed to this increase in loss. However, the second quarter operating loss was KRW 33.3 billion, an improvement over the operating loss of KRW 42.0 billion in the first quarter.

Having exited receivership in March, post acquisition by Mahindra & Mahindra Ltd., through a court supervised restructuring process, the Company has witnessed renewed momentum with sales volume exceeding 10,000 vehicles for four consecutive months since March 2011. With the support of its new majority shareholder, the Company is working on a revitalisation plan with a strong focus on cost reduction whilst focusing on new product development and market expansion.

M&M is planning to introduce Ssangyong’s models – Rexton and Korando C in India by the end of the current financial year. Both these models will be assembled at its Chakan plant in Maharashtra.