|SsangYong Motor's plant in Pyeongtaek, Gyeonggi Province / Korea Times file|
By Kwak Yeon-soo
SsangYong Motor is facing growing doubts over whether it will ever make a profit as it struggles to sell its cars at home and abroad, according to industry analysts, Sunday.
The automaker, owned by Indian carmaker Mahindra, recorded its worst quarterly performance since the 2009 financial crisis in the third quarter of the year, and has been losing money for 11 straight quarters.
Much of the decline has been attributed to weak sales and increased operating costs amid intensified market competition, and larger depreciation costs from expanding investment, the company explained.
According to SsangYong, its operating losses more than doubled to 105.2 billion won ($89 million) in the July-September period from 49.1 billion won in the same period last year.
"Despite the launch of new models, the losses widened in the third quarter due to lower industrial demand and tougher competition," a SsangYong Motor official said.
SsangYong, after launching three new models ― the Rexton Sports Kahn SUV, the upgraded Tivoli SUV and the all-new diesel-powered Korando SUV ― in the first half of this year, introduced a gasoline version of the Korando in the third quarter, pursuing a recovery in sales by releasing face-lifted models.
The company's sluggish performance was largely due to weaker sales of its sports utility vehicles (SUVs).
The sales of the SsangYong Tivoli, which has led the compact SUV market since its launch in 2015, dropped with the arrival of Hyundai Motor's smallest SUV model The Venue and Kia Motors' compact SUV Seltos.
As a result, sales of the Tivoli during the January-September period dropped to 35,351, down 15.7 percent from 41,965 last year.
Meanwhile, the company sold 46,575 mid-sized SUV Rextons (G4 Rexton, Rexton Sports Car) in the first nine months of the year, down 2.2 percent, amid tougher competition with the Hyundai Palisade and the Kia Mohave.
"On its current trajectory, SsangYong Motor might not see any growth in the near future," said an analyst at Samsung Securities. "A strong rebound is unlikely given weaker global demand and strengthened environmental regulations."
SsangYong said it was striving to increase exports by visiting dealers in Europe in line with the global shipments of the Korando M/T model starting in September.
In addition, it has recently signed a product license agreement with Saudi National Automobiles Manufacturing (SNAM) to export the Rexton Sports.
"We plan to improve profitability by increasing exports, normalizing management and carrying out high-level reforms," the company official said. "We will also roll out new face-lifted versions of our current models."