Indian automotive manufacturer Mahindra has announced the end of its 10-year long partnership with Korean manufacturer SsangYong in India. A few years ago, Mahindra stated that it would cap its investments in SsangYong as it failed to generate revenue. Over the years, the losses kept piling up, and there were few sales of the Alturas G4 in the country. Due to the end of the decade-long alliance with Mahindra, SsangYong has now been bought out by Edison Motors.
History of the Mahindra-SsangYong Alliance
Mahindra acquired SsangYong back in 2010 where its leadership team reiterated the fact that this merger is a good global opportunity. Mahindra aimed to attract a more talented Korean workforce and focus on strategy, long-term financial viability, and major HR initiatives. From 2010-2014, the two companies exercised their flexibility and adopted each other’s work ethics and practices, making the partnership work. In 2015, SsangYong launched the Tivoli for the global market under Mahindra’s acquisition and reported a net profit after 9 years.
Mahindra then used the Tivoli’s platform to create its own compact SUV called the XUV300 for India in 2019. Meanwhile, Mahindra introduced the second facelifted Rexton SUV from SsangYong in India back in 2015, which utilized a Mercedes-Benz-sourced gearbox. Finally, Mahindra then introduced the rebadged version of the 2nd generation Rexton, called the Alturas G4, for the Indian market. Mahindra unveiled the Alturas G4 at the 2018 Indian Auto Expo and assembled it using CKD methods at its Chakan Plant.
Reasons for the end of the alliance
Despite the losses and lack of sales, Mahindra and SsangYong continued to preserve and involve themselves in new initiatives. However, the Covid-19 pandemic created a huge dent and did little to improve the already dire conditions of the alliance. In 2020, Mahindra stated that it could no longer sustain its hold on SsangYong and prepared an exit strategy. During this time, Mahindra also broke its partnership with Ford, causing the American company to lose its foothold in India.
Mahindra states that it does not regret the alliance in any way, shape or form but wishes it did things differently. During the 10-year long alliance, both companies learned each other’s processes, with Mahindra gaining insight into Korean culture and work ethics. Mahindra states that the partnership led to the eventual creation of the XUV300, one of the highest-selling SUVs in India. The Indian automotive brand also commented that it would participate in future business opportunities that make economic sense.
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