Should You Risk Buying Ssangyong in 2020?

Despite a strong return to market just over two years ago with a decent ute and nice SUVs, the other-other Korean brand is in a pickle. Should you take a chance on SsangYong?

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Alas poor SsangYong, I knew him, Horatio. A brand of infinite jest, the butt of excellent mirth.

It (SsangYong) hath borne just 656 Shitsvillians upon its back in the first six months of 2020, and now, how ‘don’t buy’ in my imagination is.

I never thought Shakespeare’s Hamlet would see the light of day in one of my world-class investigative reports. 

It’s funny how things turn out. Hamlet, so Kill Bill at the very end.

Regarding the growing parallels between Hamlet and SsangYong: the whole brand could collapse at any time. It’s currently that precarious. It’s at risk of becoming just another automotive black comedy like Holden or Infiniti. And I’d suggest this is a parcel you don’t want to be left holding when the music stops. 

So, no. On balance, I don’t think I’d give SsangYong the benefit of the doubt any longer or, of course, any cash. 

Here’s a question from Norman Brandon, a dude just like you, except he’s actually thinking about buying a new SsangYong. Let us cure this now, before Gertrude sips the poison and the three-foot razorblade ensues.

I’m researching a round-Australia tow vehicle. I have a 1.5-ton boat and I’ll get a lightweight camper when I do the trip.

I was thinking Pajero Sport or Triton GLX+ (maybe GLS). But recently read reviews on the new Ssanyong Musso ute. The attraction being value, tow capacity, cabin refinement, plus all the tech for the money and the 7 year warranty. Cabin refinement is appealing for the many hours touring on bitumen on the big trip. I suspect reliability is fine as the Koreans seem to build reasonable cars.

But depreciation may be a hidden cost to ownership. So I am interested to know your thoughts.

This ‘reliability’ presumption needs a reality check. Because it is unfair to lump all of (quote-unquote) ‘the Koreans’ together, although it is a neat soundbite.

Shopping for a Triton? >>
Considering a Pajero Sport? >>

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Murder by numbers

This ‘reliability’ presumption needs a reality check. Because it is unfair to lump all of (quote-unquote) ‘the Koreans’ together, although it is a neat soundbite.

The reality is that SsangYong is a flea on the arse of South Korea’s car industry. And, when you’re making cars, size really does matter. 

HMG on a quite day…

Hyundai Motor Group - HMG - which is, basically, Hyundai plus Kia - made 3.2 million cars in South Korea in 2018. That’s according to Marklines.com. But total HMG sales were more than double that - 7.3 million - because they have factories everywhere: Retardistan, Europe, India, China, like that.

That’s Hyundai-Kia: 7.3 million. Ssangyong made 142,000 cars. 

So, every time SsangYong spits out a car, HMG spits out 50 - ballpark. Pro tip: in the context of modern automotive manufacturing, 142,000 units is simply not viable - because of the economies of scale. It’s just not. You need double that. Minimum.

SsangYong is the fifth-biggest brand in South Korea. It goes Hyundai, Kia, then daylight to GM Korea shitboxes, Renault Samsung and then SsangYong.

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Best Laid Plans

I was recently quite hopeful about SsangYong. Here’s my report on reborn Rexton >>

The company’s first wholly-owned subsidiary import operation was here in Australia. That opened in June of 2018, and bonus points for putting an Aussie in charge - guy named Tim Smith. Nice bloke. They were so bullish - here for the long haul, blah, blah, blah…

I even think they were sincere about it, at the time. But they promised things - like the local suspension tune on the Rexton Ultimate, and my understanding is that’s just stalled on the grid. Promised and not delivered.

What happened instead was two things: Mr Smith departed after just 16 months in the top job. That was last November, and the official line was ‘he’s outta here; we’re currently recruiting for a replacement’. So, on the balance of probabilities I’m inferring Smith got up and left, somewhat unexpectedly, and they ran around in the manner of decapitated chooks, for a while.

They put their top beancounter, Myongsu Kang, in charge in the interim. 

Beancounters do know how to cut costs and argue the toss about the your expenses, but they often fail to grasp the critical intangibles so necessary to make a fledgeling brand succeed - especially one that failed about 20 times previously.

And then, in April, the dudes at Mahindra in India, started to second-guess their bold investment fantasy to make SsangYong profitable by 2022.

The backstory there is that Mahindra rescued SsangYong from the brink of insolvency in 2010, and took a 75-ish per cent stake in the company, but it’s been a dog of an investment for a decade. They had planned to inject about half a billion bucks more (Australian) but they boned that idea, less than two months after announcing it, when the zombie pandemic hit.

Best they could do then was offer SsangYong a lifeline of about $50 million (Australian) to keep the doors open for the next three months. That’s from then until about now, coincidentally.

And SsangYong owes roughly $100 million (Australian) to the Korea Development Bank, and that debt is due roughly now. Oops a daisy.

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Blazoned saddles

This is dick-tripping exercise is unfortunate, no doubt.

But SsangYong is a big company, and they made assurances to me. ‘Try our Rexton’, they said, ‘We are deeply committed to Australia this time’, they said. Et cetera.

And - because I’m kinda inconsequential - what that really means is they made assurances to you, about them, and what they stood for.

In that sense, I’m just a conduit between you and them.

Thus they said to you: ‘We’re serious about Australia. We’re doing this local suspension tune for Rexton. We will make it retrospectively available to Rexton owners once we’ve finalised it.’ My understanding is that Iron Man has developed a suspension upgrade for the Musso, which is available from SsangYong dealers - but it’s an accessory kit available at extra cost. It’s actually two kits - with two different lifts.

Mr Smith assured me this about Rexton, on the phone and by email. 

On April 12 last year, Mr Smith told me:

“Phase 2 of the tuning project was sent to Korea 2 weeks ago (recommended setup etc.). Head office are making the adjustments to a local vehicle in Korea as well as sending to Australia necessary parts for testing. Ironman are also preparing a local accessory lift kit once the spec is approved. Approximately 8 weeks away.”

I’m not accusing Mr Smith of lying. I believe he faithfully represented to me what he believed to be true. But that was 15 months ago, and I cannot find any evidence this re-tune was implemented. My sources tell me it has not occurred. And the standard suspension tune is shit.

SsangYong also committed to 3000 sales in Shitsville in 2019. They actually sold about 1000. That’s not a pass. Not even close. And achieving critical mass is essential to success. They had been selling about 200 vehicles a month, initially, but sales have basically halved since the impending collapse went public, and the pandemic hit at full strength.

Bottom line: It’s $44,000 plus on-roads for a fully-loaded dual-cab SsangYong Musso. It’s $48k for a Triton GLS. Given the relativity of risk - as I perceive it, anyway - it could well cost you more than double the $4000 you notionally save on the Triton, if you buy the Musso, and if SsangYong collapses, or if the beancounters just put their heads together and decide ‘Straya is just no longer worth the bother.

And, objectively, it’s not worth the bother - not at 1300 sales annually, or something. It’s just not. If that happens, and you own a Musso, you’re holding a car nobody wants, with a resale value that just jumped in the express elevator and hammered the button marked ‘basement’. And good luck with the parts, the servicing, the diagnostics, and the support for recalls and service campaigns.

Let’s not forget the Triton - or a Pajero Sport - is a substantially better vehicle in a dozen objectively measurable ways. Far be it from me to tell anyone what to do but, who am I kidding? That’s essentially the only reason I’m here.

SsangYong was looking good 15 months ago. But that ship has sailed. Assurances were made, but someone forgot to validate the parking. And the bank is doubtless drafting a foreclosure notice. And I’m un-motivated to give that any further doubt/benefit. SsangYong is simply too risky right now.

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