India’s Mahindra and Mahindra, parent company to Pininfarina, said Friday it has canceled plans to further invest in South Korea's SsangYong.
Mahindra only two months ago said it would invest $406 million over three years to support the development and production of new vehicles at SsangYong, a global SUV brand in which Mahindra owns a 74.65-percent stake.
However, Mahindra now needs to conserve cash as it faces a sharp reduction in sales of its own vehicles brought about by the Covid-19 coronavirus pandemic. Mahindra, which manufactures SUVs and commercial vehicles, said its sales plunged 88 percent in March due to coronavirus-related lockdowns.
Mahindra said SsangYong will now need to secure its own funding, but it will still help its Korean subsidiary with access to vehicle platforms and other cost-reduction strategies. Mahindra also said it is open to a special one-time infusion of $32 million to help SsangYong stay in operations over the next three months.
Mahindra took over SsangYong in 2010 after it ran into financial troubles at the hands of previous owners Daewoo and SAIC, and managed to turn the Korean company into a profitable one just six years later. SsangYong's lineup currently consists of five SUVs and a pickup truck.