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Mahindra completes acquisition of majority stake in SsangYong Motor Company Print E-mail
Written by Vijay   
Wednesday, 16 March 2011
Mumbai: After emerging as the preferred bidder for SsangYong in August 2010,  Mahindra & Mahindra Ltd. has now completed all formalities related to the acquisition of a majority stake in SsangYong Motor Company (SYMC) and the company is no longer in Court Receivership.

Dr. Pawan Goenka, President, Automotive and Farm Equipment Sectors, Mahindra & Mahindra Ltd., announced that the new CEO of SYMC will be Mr. Yoo-il Lee, while Dilip Sundaram from Mahindra will be the new CFO. He also announced the names of the new Board of Directors of SsangYong Motor Company.

"Mahindra brings with it a great deal of passion, domain expertise and knowledge of the global UV market, as India's leading utility vehicle (UV) manufacturer. All of us at SsangYong look forward to working closely with the Mahindra team to help develop a new product portfolio and gain momentum in overseas markets," said Mr. Yoo-il Lee, CEO, SsangYong Motor Company.

Dr. Pawan Goenka mentioned that Mahindra was extremely conscious of SYMC's Korean heritage and would only want to enhance it. SsangYong will be an independently run Korean company – by largely Korean Management – and a will remain a ‘Made in Korea' Brand.

For Mahindra, the biggest benefit from this partnership will be the opportunity to harness synergies between the two companies, while protecting their respective brand identities and ensuring quality. Towards this end, a Synergy Council comprised of senior management from both companies will be established to ensure focus and delivery of synergies between the two companies. The Council will focus on various aspects such as global procurement, new car development and business strategy to penetrate international markets.

Strategic plans such as the India project which involves launching the Rexton and Korando-C in India have already been kicked off. Also under discussion are opportunities for joint product and technology development and synergy in global operations and purchase. Mahindra has a strong IT system that is being reviewed for suitability for SsangYong. The company is also considering the possibility of Mahindra Finance setting up operations in Korea to enhance the sales of SsangYong vehicles.

Mahindra has also proposed the following five point agenda for SsangYong:

- Strengthening the product pipeline
- Harnessing synergies between the two companies
- Investing in the SYMC brand
- Building human resources
- Focusing on financial stability

SsangYong has also proposed the following investments:
- In 2011 the business plan calls for a 70% investment increase in product development, compared to last year, at over KRW 200 billion
- Over 40 bn KRW for brand building in Korea - a 60% increase over 2010 - and an increase in overseas brand investment by over four times, in 2011.

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