M&M backs out of further investment in SYMC

Pawan Goenka, the Managing Director of Mahindra & Mahindra (M&M), told analysts in February this year that if M&M was going to invest more money into South Korean subsidiary SsangYong Motor Company (SYMC), it would first be reasonably certain that the three-year plan chalked out for SYMC would work out and breakeven achieved by 2022. Goenka was referring to the proposed investment of nearly Rs 3000 crore in SYMC, which was yet to come up for consideration of the board of directors of M&M. The board met in the first week of April and declined the proposal of SYMC, approving just a fraction of the amount sought. The disappointing SYMC performance is largely seen to be the outcome of weak global export demand, and the ongoing COVID-19 fueled economic downturn is unlikely to improve matters. According to the press release issued by SYMC, in February, the company sold 7,141 units (2041 exported), a decline over 27% from the year ago period. The company had sold a total of 135,235 units in calendar year 2019, posting a net loss of 341.4 billion won (nearly Rs 2100 crore). While domestic offtake remained strong in 2019, the company’s loss expanded in 2019 over