Ssangyong's fate again remains in the balance nine years after India's Mahindra Group acquired it. The Indian carmaker has decided to scrap plans announced early this year to invest yet more money into the SUV maker, raising fears of an impending liquidity crunch. Mahindra in a board meeting on Friday and scrapped an investment of W230 billion into Ssangyong (US$1=W1,236). Instead, it will inject only up to W40 billion over a three-month period to keep it operational.

/Yonhap

Ssangyong on Sunday promised management reforms to overcome the current crisis. The carmaker has to repay W70 billion in debt to state-run Korea Development Bank in July.



"We should be able to redeem the maturing corporate debt and commercial paper if we use the W40 billion in funding and money we raise on our own," a Ssangyong executive said.



But without an infusion of additional capital, Ssangyong could face another liquidity crisis and difficulty rolling out new models. It achieved a profit in 2016 thanks to the huge popularity of the Tivoli small SUV but suffered 12 straight quarters of losses until the fourth quarter of 2019.



Last year, Ssangyong suffered a W281.9 billion operating loss, resulting in the worst earnings since 2009, and the future looks gloomy. A lack of new models in Korea has led to a sharp decline in sales, while customers are staying away from showrooms overseas due to the coronavirus panic.