BUSI­NESS

The Korea Times - - FRONT PAGE - By Kwak Yeon-soo [email protected]­re­atimes.co.kr

SsangYong Mo­tor is fac­ing grow­ing doubts over whether it will ever make a profit as it strug­gles to sell its cars at home and abroad, ac­cord­ing to in­dus­try an­a­lysts, Sun­day.

SsangYong Mo­tor is fac­ing grow­ing doubts over whether it will ever make a profit as the com­pany strug­gles to sell its cars at home and abroad, ac­cord­ing to in­dus­try an­a­lysts, Sun­day.

The au­tomaker, owned by In­dian car­maker Mahin­dra, recorded its worst quar­terly per­for­mance since the 2009 fi­nan­cial cri­sis in the third quar­ter of the year, and has been los­ing money for 11 straight quar­ters.

Much of the de­cline has been at­trib­uted to weak sales and in­creased op­er­at­ing costs amid in­ten­si­fied mar­ket com­pe­ti­tion, and larger de­pre­ci­a­tion costs from ex­pand­ing in­vest­ment, the com­pany ex­plained.

Ac­cord­ing to SsangYong, its op­er­at­ing losses more than dou­bled to 105.2 bil­lion won ($89 mil­lion) in the July-Septem­ber pe­riod from 49.1 bil­lion won in the same pe­riod last year.

“De­spite the launch of new mod­els, the losses widened in the third quar­ter due to lower in­dus­trial de­mand and tougher com­pe­ti­tion,” a SsangYong Mo­tor of­fi­cial said.

SsangYong, af­ter launch­ing three new mod­els — the Rex­ton Sports Kahn SUV, the up­graded Tivoli SUV and the all-new diesel-pow­ered Ko­rando SUV — in the first half of this year, in­tro­duced a gaso­line ver­sion of the Ko­rando in the third quar­ter, pur­su­ing a re­cov­ery in sales by re­leas­ing face-lifted mod­els.

The com­pany’s slug­gish per­for­mance was largely due to weaker sales of its sports util­ity ve­hi­cles (SUVs).

The sales of the SsangYong Tivoli, which has led the com­pact SUV mar­ket since its launch in 2015, dropped with the ar­rival of Hyundai Mo­tor’s small­est SUV model The Venue and Kia Mo­tors’ com­pact SUV Sel­tos.

As a re­sult, sales of the Tivoli dur­ing the Jan­uary-Septem­ber pe­riod dropped to 35,351, down 15.7 per­cent from 41,965 last year.

Mean­while, the com­pany sold 46,575 mid-sized SUV Rex­tons (G4 Rex­ton, Rex­ton Sports Car) in the first nine months of the year, down 2.2 per­cent, amid tougher com­pe­ti­tion with the Hyundai Pal­isade and the Kia Mo­have.

“On its cur­rent tra­jec­tory, SsangYong Mo­tor might not see any growth in the near fu­ture,” said an an­a­lyst at Sam­sung Se­cu­ri­ties. “A strong re­bound is un­likely given weaker global de­mand and strength­ened en­vi­ron­men­tal reg­u­la­tions.”

SsangYong said it was striv­ing to in­crease ex­ports by vis­it­ing deal­ers in Europe in line with the global ship­ments of the Ko­rando M/T model start­ing in Septem­ber.

In ad­di­tion, it has re­cently signed a prod­uct li­cense agree­ment with Saudi Na­tional Au­to­mo­biles Man­u­fac­tur­ing (SNAM) to ex­port the Rex­ton Sports. “We plan to im­prove prof­itabil­ity by in­creas­ing ex­ports, nor­mal­iz­ing man­age­ment and car­ry­ing out high-level re­forms,” the com­pany of­fi­cial said. “We will also roll out new face-lifted ver­sions of our cur­rent mod­els.”

Korea Times file

SsangYong Mo­tor’s plant in Pyeong­taek, Gyeonggi Province

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