SsangYong pins last hope on Rexton for recovery despite disclaimer opinion

South Korea’s troubled carmaker SsangYong Motor Co. is pinning its corporate viability hope on All New Rexton, its flagship sport utility vehicle (SUV), amid rising demand for spacey cars for car camping under Covid-19 travel restrictions.

The carmaker under India’s Mahindra & Mahindra is facing delisting as its third-quarter financial statement was turned down by its auditor Samjong KPMG, according to industry sources on Tuesday. The auditor has issued a disclaimer of opinion for the third time since it earlier refused to endorse its first-quarter and half-year results.

“SsangYong Motor recorded 309 billion won ($278 million) in operating loss and 304.8 billion won in net loss in the third quarter, with its current liabilities exceeding current assets by 535.7 billion won,” Samjong KPMG said. “The situation has called into question of the company’s ability to continue existence as a going concern.”

The company is now on the administrative watch list by the nation’s sole stock exchange operator Korea Exchange.

SsangYong Motor"s All New Rexton

SsangYong Motor has been in the red for 15 straight quarters. Its capital impairment ratio on a consolidated basis soared to 86.9 percent as of the end of September, compared with 46.2 percent at the end of 2019.

To make matters worse, its largest shareholder Mahindra & Mahindra reaffirmed its plan “not to invest in SsangYong Motor anymore” and reduce its shareholding from the current 75 percent to 50 percent while it announced its third-quarter results on Nov.10.

One silver lining is that its sales grew for three quarters in a row thanks to its strengthened marketing and releases of facelift versions of flagship vehicles. It sold 10,197 units of vehicles in total in October, surpassing 10,000 for the first time in four months and recording the first year-on-year increase in sales.

The company expects the car camping trend that has become popular amid virus threats to boost sales of its compact SUV Tivoli Air as well as All New Rexton, the facelift version it released earlier this month. It chose Lim Young-woong, the winner of a hit television trot music competition who is leading the renaissance of the musical genre, as an advertisement model to cash in on his soaring popularity.

SsangYong received 5,500 units of pre-orders for All New Rexton in just a week since it started its first shipment on Nov. 16.

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