Mahindra has confirmed exiting electric scooter business in the United States while seeking investors for SsangYong
Mahindra & Mahindra completed the acquisition of SsangYong Motor Company in February 2011 for USD 463 million. Four years later, the new Tivoli was introduced and within a year of its debut, Mahindra managed to turn SsangYong into a profitable company for the first time in nine years. The continued success of new products helped SsangYong to post a record sales not seen since 2003 in 2017.
Both the brands began working together in various fields and resultantly the XUV300 compact SUV based on SsangYong Tivoli’s X100 platform and the Alturas G4 emerged as the rebadged version of Rexton G4. Mahindra increased the stakes in SsangYong from 72.46 per cent to around 74.65 per cent through additional subscription of shares last year.
There were speculations surrounding a new sub-brand under SsangYong for producing high-performance EVs in South Korea, and other projects involving electrification over the last few years as well. The global health crisis and difficult market scenarios endured in recent times have prompted Mahindra to take decisions on its subsidiaries reportedly.
The homegrown UV specialist is said to be giving up on loss makers such as the America-based electric bike brand known as GenZe. Moreover, it has decided against investing more on SsangYong and has intentions to sell controlling stake according to the report. Mahindra reported a huge loss of Rs. 2,510 crore in the March quarter due to the dire economic conditions.
It has been said that about 80 per cent of the write-off was attributed to SsangYong and GenZe. While Mahindra has confirmed by its Managing Director, Pawan Goenka, to exit from electric scooter business in the US, more impact could be seen on its ownership of SsangYong. He further noted that Mahindra is “looking at potential investors” for the South Korean subsidiary.
He added that Mahindra is willing to “give up ownership control” on SsangYong as it could not deliver on the global expansion and floundered to meet break-even in two years despite the brand managed to regulate expenses and cash flows. Mahindra will be exiting from the loss-making business ventures while rejigging its plans towards finding profitability in the promising ones in the mid-term going forwards.