CHOHUNG Bank, the main creditor to SsangYong Motors, has confirmed it has signed a preliminary deal with China 's state-run National Blue Star Group to sell a controlling 49 per cent stake in the Korean car maker.
The deal, expected to be finalised by March, will not affect existing European distribution agreements, including that in the UK where SsangYong UK has a two-year rolling contract.
Before making its final offer in late January, Blue Star will undertake a three-week inspection of the SsangYong accounts and a final formal contract is expected to be signed by the end of March 2004.
Liu Xianqiu, Blue Star's vice president, confirmed its plan to invest at least $1 billion to buy the controlling interest in SsangYong; this includes $700 million to expand the manufacturing capacity of the Korean company which produces sports utility vehicles, large saloons and MPVs.
In 2002 SsangYong built 161,000 vehicles with only 12,277 sold outside its domestic market.
SsangYong was put up for sale following the collapse of its parent company, the Daewoo Group, in 1999 with debts of $80 billion. GM bought some of Daewoo's operations in 2002 but not SsangYong.
Tom Martin, sales and marketing director of SsangYong UK, recently confirmed to Interchange that European sales through independent distributors would remain in place whoever bought the manufacturer. SYUK has a two-year rolling contract like most distributors under the new EU Block exemption agreement, he said.
SYUK expects to sell around 2,500 Rexton 4x4s in the UK and another 500 in Southern and Northern Ireland in 2004. “Plans are in hand to extend the range with a large 4x4 MPV and possibly double cab pick-ups within the next year,” said Martin.Published 29 December 2003