Volkswagen Looking to Buy SsangYong Motor

Volkswagen, who'll soon become the sole Porsche owner, is looking to take over South Korean automaker SsangYong Motor, a company which is now struggling to step out of a very difficult economic situation. Still operating under bankruptcy protection, SsangYong earlier this year had to cope with a violent strike after hundreds of workers decided to occupy a factory and shut down production entirely.

Volkswagen hasn't commented on the reports so far but SAIC, the former SsangYong owner, collaborated with the German brand through the Shanghai VW joint venture.

According to gasgoo.com, auto analysts are predicting a bright future for SsangYong which, under the ownership of Volkswagen, will add a production capacity of 25,000 units per year for low budget models. Furthermore, it could support the German carmaker bring new models in South Korea and even support the implementation of electric car battery technologies in German cars.

According to SsangYong's survival plan, the South Korean carmaker wants to repay its debts in full, in installments over five years at 3.84 percent. Other debts will be paid by converting 43 percent of the debts into new shares, while the remainder 47 percent will be paid in cash, over five years, at 3 percent.

Production and new car sales have been severely affected by the violent strike of the company's workers. SsangYong has a goal of 32,000 units for the remainder of 2009. In the first seven months of the year, the South Korean carmaker sold less than half that number: 13,000 vehicles, but largely due to the 77-day strike.