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A subcontractor that supplied Ssangyong Motor with parts for all car models has gone belly up, raising a red flag for the recovery of the automaker.

Representatives of an association of about 250 Ssangyong subcontractors asked the automaker's court receivers for emergency funds in a meeting at Posteel Tower building in Seoul on Wednesday. Ssangyong is receiving components again after moving the parts production machine operated by the supplier that went bankrupt the previous day to another subcontractor.

Currently, subcontractors are staying afloat by tapping into W300 billion (US$1=W1,393) raised temporarily with the help of banks in the form of extended loans and by other means. Seven or eight out of about 40 suppliers, relying on Ssangyong for more than 50 to 60 percent of their sales are feared to go under within a week.

According to the automaker's creditors, the companies need about W5-10 billion to avoid bankruptcy. In addition to support for subcontractors, Ssangyong needs an additional W100-150 billion to roll out the C200, a new model on which it is pinning its hopes of survival.

(englishnews@chosun.com )