Ssangyong Motor Co., South Korea's smallest carmaker, was placed in bankruptcy protection after vehicles sales tumbled 30 percent last year, Bloomberg reported.
Park Young Tae, Ssangyong's current financial director, and Lee Yoo Il, a former Hyundai Motor Co. president, will act as receivership managers, the Seoul Central District Court said in a faxed statement today. The court could still seek liquidation if the managers' turnaround plan is deemed unviable.
The decision ends Shanghai-based SAIC Motor Corp.'s four- year control of the automaker, hindering the Chinese company's efforts to develop own-brand models and reduce its reliance on making General Motors Corp. and Volkswagen AG vehicles in China. Ssangyong sought creditor protection last month because of a "serious liquidity crisis."
"All global automakers are struggling with tumbling sales," said KB Investment & Securities Co. analyst Sohn Myung Woo. The problems are even worse for Ssangyong as "it doesn't have the right cars to sell."
The automaker's sales tumbled to 92,665 vehicles last year, 42 percent less than in 2002, as customer shunned its aging line- up of gas-guzzling sport-utility vehicles in favor of more fuel- efficient Hyundai and Kia Motors Corp. cars.