Auto major Mahindra and Mahindra's Korean subsidiary SsangYong today said it expects to improve financial performance in the next two years.
"SsangYong is doing better compared to what we have expected. We are happy with the acquisition and so are with their financials. We feel the turnaround will be as what we have planned. We see better financials in year or two," M&M Chief Executive-Automotive Division Pravin Shah said.
He was speaking to reporters on the sidelines of launch of Ssangyong's Rexton SUV in Hyderabad market.
SsangYong had posted net loss of KRW 13.4 billion (USD 12.4 million) for the quarter ended September 30, against KRW 35.4 billion (USD 32.7 million) during the year-ago period. Shah, however, declined to reveal when the Korean subsidiary expects to break-even.
M&M, which emerged as the preferred bidder for SsangYong in August 2010, holds 70 per cent stake in the company, for which it shelled out USD 463 million (about Rs 2,105 crore). Ssangyong recorded 29,039 vehicles in sales volume, which includes 11,906 CKD vehicles in domestic sales and 17,133 in exports.
Its revenues for the third quarter stood at KRW 696.5 billion (approximately USD 634 million).
"The performances resulted from a decrease in exports due to recession of global automotive market, despite an increase in domestic sales," SsangYong had said in a release during results announcement.
The company showed a decrease of 4.4 per cent in sales volume and 6.8 per cent in revenues in Q3 compared to the same period last year.
"In the current year, the domestic market (Korean) and European markets for Ssangyong are not growing. The market situations are known. The whole of Europe is undergoing difficult times. Hence, Ssangyong is also facing the issue (of tough time)," Shah said. Replying to a query on the agitating former employees of Ssangyong, he said they were aware of the situation and the issue would be addressed diligently.