NEW CAR MODEL BY SSANGYONG MOTOR

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Ssangyong Motor has released a new car model for the first time in three years. This comes after it found a company to acquire it. The automaker has posted deficit for 21 quarters in a row. Could the acquisition bring life back to the firm?

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Ssangyong Motor, which is under court receivership and up for sale again, has released a new car for the first time in three years. The automaker plans to release three new models of electric vehicles by 2024 in a bid to rehabilitate its business operations.

[Soundbite] Chung Yong-won(Ssangyong Motor) : "We will restore our fame as a top SUV brand within the next two years. We will also normalize our operations."

Ssangyong's staff have been working in a single shift so far to produce the new model. From next week they will work in two shifts to manufacture 26,000 units by the end of the year. KG Group, which is to acquire Ssangyong Motor, also agrees with the plan. It's determined to normalize the automaker without restructuring, but by actively targeting the global market.

[Soundbite] Kwak Jae-sun(Chair, KG Group) : "We have never once thought about restructuring. We want to extend our global reach."

There are still many hurdles ahead. KG Group plans to inject 900 billion won in acquisition and operation funds. But Ssangyong's debt alone reaches 1.5 trillion won and it has to prepare 500 billion won in annual operation funds. An immediate improvement in profitability is unlikely as demand for cars is predicted to decline in the wake of a global recession.

[Soundbite] Lee Hang-koo(Korea Automotive Technology Institute) : "Demand could fall below expectations and that could require more funding."

Ssangyong plans to submit a rehabilitation plan to court within this month. It will also convene a meeting of relevant parties based on the conditional investment deal signed with KG Group.