SsangYong for sale as Mahindra looks for an out

Mahindra & Mahindra is looking to shift its stake in SsangYong in the wake of the ongoing COVID-19 global pandemic.

Announcing that the Korean car-maker was up for sale, the Indian car-making giant's MD, Pawan Goenka, told Reuters: "SsangYong needs a new investor. We are working with the company to see if we can secure investment."

News that the Mahindra Group wants to ditch SsangYong had been expected by the markets following reports that it had slipped from profit a year ago to a $258 million ($A376m) loss off the back of collapsing sales amid the coronavirus pandemic.

Mahindra owns a large 75 per cent stake in SsangYong following its rescue of the car-maker from near-bankruptcy back in 2010.

Since then, under the Indian car-maker's stewardship, it has struggled to turn things around.

At the beginning of 2020 Mahindra announced it would invest $423 million ($A682m) as part of a rescue plan to make SsangYong profitable by 2022.

In April, the recovery collapsed when Mahindra said it would no longer invest any more cash in SsangYong because it had to focus its resources on its own recovery from the pandemic.

“If a new investor comes on board, that automatically takes our stake down, or they may even buy our stake,” Mahindra’s deputy managing director Anish Shah said.

As part of the sale or share reduction, Mahindra said it would consider a partnership and continue investing in SsangYong, if the conditions were right.

Mahindra, which also owns Pininfarina, says that as well as wishing to sell on SsangYong it has had to delay the completion of a $275 million ($A400m) joint-venture with Ford, but the two car-makers were still working together to develop, market and distribute Ford vehicles for the Indian market.