Recently, GM officials confirmed that GM plans to join hands with SAIC to acquire Ssangyong Motor Co., the fourth-largest automaker in South Korea. The transaction may exceed 500 million U.S. dollars.
A year ago, General Motors acquired Daewoo Motors, the country’s third-largest automaker, for US$400 million. Now it is time to acquire Ssangyong Motors. Some media believe that GM may combine Daewoo and Ssangyong to become a powerful competitor of Hyundai Motor Co., Korea.
GM's joint purchase with SAIC Group indicates that it is not only in Korea, but also in the fiery Chinese auto market that it is undoubtedly one of its main goals. From SAIC's previous investment of US$59.7 million and the acquisition of 10% shares of GM Daewoo, the close cooperation between SAIC and GM can be seen.
According to South Korea’s chief creditor, Changhong Bank, eight potential bidders indicated that they are interested in buying a 55% stake in Ssangyong, which is worth more than US$500 million (based on the 11-day stock price). General Motors is one of them. Changhong Bank also stated that China's Shanghai Automotive Industry Corporation (Group) Corporation and Nanxing Automobile Corporation, as well as the French company Citroën Motors, may also bid.
Ssangyong is Korea's most powerful producer of luxury cars and sports utility vehicle SUVs. Among the SUVs sold in South Korea, 40% are produced by Ssangyong. GM Daewoo announced in October that it plans to develop its own large-scale car. The acquisition of Ssangyong will allow GM Daewoo to enter this fastest growing automotive sector. For Chinese buyers, one of the attractions of Ssangyong is its technology, which can be introduced into the Chinese market through acquisitions. The SAIC Group already has close links with Ssangyong Motor. The Mercedes-Benz MB100 commercial bus production project transferred by Ssangyong Motor has officially settled in SAIC Motor. SAIC will use the Shanghai Yizheng Yizheng Factory to officially launch the domestic MB100 from the first quarter of next year. The model is expected to cost about RMB 200,000.
The acquisition of Ssangyong Motor by a foreign company will have an impact on the long-held dominance of Korean auto makers. The first thing to feel threatened is of course the Korean Hyundai Group. However, Chinese SUV manufacturers also feel some pressure.
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