Mahindra Ssangyong Takeover

Just two weeks back, Mahindra was in news for the lawsuit filed against it by US dealers, and again it reached the headlines. Two months back, Mahindra South Africa had announced that they would market the SsangYong’s products in South Africa after they acquired 70 per cent of the stake in SsangYong. May be the timing wasn’t good as the company got into dispute with Twin Dragons Automotive for the distribution rights.

Twin Dragons Automotive, a member of the Imperial Group of companies, was the previous distributor of the Korean automaker’s products. The customers were not aware of the fact that the agreement between Twin Dragons Automotive and SsangYong is no longer valid and they are just continuing to trade as SsangYong distributors. On the other hand, since April 1, 2012 (post acquisition), Mahindra has been marketing the SsangYong products in countries like Namibia, Botswana, Zimbabwe and Mozambique too apart from South Africa.

The lawyers representing Twin Dragons Automotive, however denied the claim made by Mahindra. According to them, the company had been marketing and selling the products, purchased from SsangYong, and were very much abiding as per the distribution agreement between the two. As per the agreement, Twin Dragons Automotive has the right to sell vehicles with a valid manufacturer’s warranty. Unfortunate for them, and fortunately for the Mahindra, the dispute would soon see an end as the Korean automaker, SsangYong, confirmed that Mahindra South Africa is the sole distributor of their products and the agreement with Twin Dragons Automotive, ended on March 31.