Things Go from Bad to Worse for Troubled Carmakers

  • By Yoon Hyung-jun

    February 22, 2021 12:47

    Things are going from bad to worse for Korea's three smaller, struggling automakers Ssangyong, GM Korea and Renault Samsung.

    According to the Korea Automobile Manufacturers Association on Sunday, Hyundai sold 47,059 cars and Kia 37,045 in January to rank an unassailable first and second. But they were followed by foreign carmakers, with Mercedes-Benz in third with 5,918 cars and BMW in fourth with 5,717 cars.

    Then came Ssangyong with 5,648, GM Korea with 5,162 and Renault Samsung with 3,534.

    It is rare in a patriotic market like Korea for two foreign brands to rank so high, and the reason is that they recently released popular models like a new addition to the Mercedes E-Class and BMW 5 Series.

    By contrast customers seemed to be giving up on what they see as the sinking ships of the smaller Korean carmakers. In addition, Renault headquarters in France also recorded a net loss of 8.46 billion euros last year due the coronavirus pandemic and is sacking 15,000 workers by 2025.

    Ssangyong filed for court receivership December and is seeking a last-ditch bailout from U.S. auto retailer HAAH Automotive Holdings. It hopes to sign an investment agreement and then ask for yet another loan for a capital increase from state-run Korea Development Bank. But in the meantime its factories have stopped operations because suppliers who have not been paid are refusing to deliver parts.

    One of GM Korea's factories also had to cut production by half due to a shortage of parts and is looking for a way out through cooperation with component makers.

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