Ssangyong Motor, 2Q Operating Loss Widens... 14 Consecutive Quarters of Deficit

[Asia Economy Reporter Suyeon Woo] SsangYong Motor continued to expand its operating losses in the second quarter of this year, marking 14 consecutive quarters of deficits. This was due to ongoing production disruptions caused by difficulties in sales and parts supply amid the COVID-19 pandemic.

On the 27th, SsangYong Motor announced that its sales in the second quarter amounted to 707.113 billion KRW, a 24.3% decrease compared to the same period last year. Operating losses during the same period widened to 117.142 billion KRW, compared to 49.1 billion KRW in Q2 last year and 98.6 billion KRW in the previous quarter. As a result, SsangYong Motor has sustained losses for 14 consecutive quarters since Q4 2016.

For the first half of the year, sales totaled 1.3563 trillion KRW, down 27.4% year-on-year. Operating losses also expanded to 215.8 billion KRW compared to the previous year. Despite efforts to reduce fixed costs through cuts in employee welfare and labor costs (60 billion KRW), as well as the sale of non-core assets (193.5 billion KRW), the sharp decline in sales led to increased losses. A SsangYong Motor official stated, "We expect that once the market situation improves after the COVID-19 crisis, the effects of fixed cost reductions through self-help efforts will be maximized, and the financial structure will also improve."

Ssangyong Motor Pyeongtaek Plant Production Line / Photo by Yonhap News

Sales in the first half reached 49,419 units, a 29% decrease compared to the same period last year; however, from the second quarter, domestic sales slightly recovered with the launch of improved models of Tivoli and Korando. Recently, SsangYong Motor has been responding to the European market through online launch events to overcome export sluggishness and is making every effort to expand global sales, including signing a KD (knock-down) assembly and sales contract for Tivoli with China's Songuo Motors.

Additionally, in the second half of this year, SsangYong plans to focus on new product launches, including the facelifted G4 Rexton model and the re-release of the long-body version of the Tivoli Air. Early next year, the company is conducting final quality inspections to launch Korea’s first compact mid-size electric sport utility vehicle (SUV).

A SsangYong Motor official said, "Along with the ongoing management innovation plans, we are making our best efforts to seek cooperation with stakeholders to secure the company’s future competitiveness, including attracting new investors," adding, "In the second half, we will improve profitability through aggressive product marketing."

This content was produced with the assistance of AI translation services.