by Regarding the takeover of Ssangyong Motor, until last year, HAAH Automotive was likely to take over, but this year, domestic companies also participated in the acquisition of Ssangyong Motor. In addition to HAAH Automotive, which started as Cardinal One Motors, 11 companies including Edison Motors, K-Pop Motors, and SM Group are currently participating in the takeover of Ssangyong Motors.
Among them, K-Pop Motors is a company that focuses on the production of electric two-wheeled vehicles and the supply of electric vehicle parts and plans to enter the finished car market through the acquisition of Ssangyong Motor. However, if you look at the goals set by K-Pop Motors, they presented goals that are difficult for even large corporations to achieve. You have to dream big, but it’s hard to be persuasive if you don’t have reality.
What kind of company is K-Pop Motors?
K-Pop Motors is still not very familiar to us, so let’s take a brief look at what kind of company it is. K-Pop Motors, established in 2014, is focusing on electric two-wheeled vehicles and electric vehicle parts. The headquarters and factory are located in Yeonggwang-gun, Jeollanam-do. We are collaborating with several two-wheeled and electric vehicle manufacturers, exporting them to various countries such as China and Vietnam.
It currently produces three-wheeled scooters, four-wheeled scooters, electric bicycles, toys, etc., in addition to two-wheeled vehicles, and manufactures and distributes fast chargers jointly developed with SETEC. K-ZEMA, an OEM model of Domy Motors, is an ultra-small electric vehicle, but it does not seem to be sold in Korea yet. It is not listed in the car models eligible for electric vehicle subsidy.
The Ssangyong insujeon
Kpop Motors spirals
that K-Pop Motors was an electric two-wheeled vehicle plunged into focus the Ssangyong insujeon. It seems that it is trying to acquire Ssangyong Motor to enter the finished car market. On July 29, K-Pop Motors submitted a letter of intent to take over to EY Hanyoung Accounting Corporation, the lead manager for the sale of Ssangyong Motors.
Even Cardinal One Motors and Edison Motors, which were selected as strong candidates, have submitted a letter of intent to acquire. K-Pop Motors first prepared 380 billion won, a part of the acquisition fund. If it was designated as a preferred bidder, he secondly equipped 1 trillion won to acquire Ssangyong Motors fully. The remaining 2.4 trillion won was used for public offerings as employee stock and national stock. He expressed his confidence that he would completely revive Ssangyong Motor by using sufficient funds.
Plans announced by K-Pop Motors
After the acquisition of Ssangyong Motors, K-Pop Motors plans to realize a net profit of more than 20 trillion won through the Global One Ssangyong Project. The Global One Ssangyong Project is about job succession and business expansion. In the car lineup, the new plant in Pyeongtaek and Changwon plans to produce five electric cars, including the Chairman, seven electric SUVs including the Rexton, three types of hybrids including Musso, three types of new vans, and three types of new commercial vehicles.
In addition, the company plans to build local factories in Dubai, the United States, Germany, Kazakhstan, Vietnam, South Africa, and Brazil to start selling through rental cars at 510 exhibition and sales centers in 239 countries around the world. In Korea, it has decided to strengthen its position in the electric vehicle market by installing a large-scale rental car hub complex and Ssangyong Motor Electric Technology Training Center in Jeju. The goal is to create an intelligent road and make it a bright global island.
In particular, he explained that all cars to be rented and sold in the future would be able to pay and operate anywhere globally with a mobile phone without an intelligent key. By using the mobile phone app developed by Paygate, a Fintech company specializing in K-pop Motors, a partner of K-Pop Motors based on the Safe Wallet, and a driving program using a card-type key, anyone can economically rent operate Ssangyong Electric Rent-a-Car at a minimal cost. I made a plan to make it available for purchase later.
Finally, after acquiring Ssangyong Motor, he announced that he would succeed in hiring all employees without layoffs. He showed confidence that the current workers’ workability would be upgraded if the Global One Ssangyong Project were applied.
If you look at the plans announced by K-Pop Motors, the scale is enormous. Of course, it is good to have big dreams, but it is challenging to persuade without reality.
First of all, it is unrealistic that it plans to realize a net profit of more than 20 trillion won through the Global One Ssangyong Project. Hyundai Motor, Korea’s No. 1 automaker and world-class automaker, has a net profit of 3 trillion won in the first half of this year, and it isn’t easy to exceed 10 trillion won in the second half of this year.
In addition, the construction of local factories in Dubai, the United States, Germany, Kazakhstan, Vietnam, South Africa, and Brazil should be considered unrealistic for the time being. First of all, the plan to increase the utilization rate to 100% starting from the domestic plant is more convincing. In addition, to enter 239 countries worldwide, it would have to grow to the size of Toyota.
Another problem is that Ssangyong Motor plans to succeed in hiring all employees without layoffs. Hiring succession can be done, but the average annual salary of Ssangyong employees is around 80 million won. If you succeed in hiring all of them, the deficit could become worse. Currently, there are about 4,732 employees of Ssangyong Motor, and when calculated based on the average annual salary, the annual labor cost alone is 378.5 billion won.
I have set unrealistic goals in the past. At an online company briefing in 2016, he also presented a goal of achieving annual sales of KRW 4,950 trillion as a vision for 2020. For reference, Apple’s total sales are about 326 trillion won in 2020, and Apple’s market cap is 2,881 trillion won.
He also presented a sales target of selling 1.65 billion electric scooters to the global market for an average of 3 million won per unit in 2020. Naturally, these plans did not materialize.
I have set unrealistic goals in the past. At an online company briefing in 2016, he also presented a goal of achieving annual sales of KRW 4,950 trillion as a vision for 2020. For reference, Apple’s total sales are about 326 trillion won in 2020, and Apple’s market cap is 2,881 trillion won.
He also presented a sales target of selling 1.65 billion electric scooters to the global market for an average of 3 million won per unit in 2020. Naturally, these plans did not materialize.
They are scammers. Netizens’ reaction to this is cold. There is a strong view that they are scammers. “A company that I haven’t even heard of Hyundai does?”, “It seems unrealistic even just hearing the word,” “SsangYong seems to reject such a company,” and “I laughed at a net profit of over 20 trillion won. There is a response such as “Speak up and avoid the deficit.”
In May, K-Pop Motors uploaded a video related to the acquisition of Ssangyong Motor, but the response was also not good. There are reactions such as “I am working three part-timers to take over Ssangyong Motor,” “There is no substance, and the content quality is too low, who would believe it?”, “A company is seeking retirement funds,” etc.
Ssangyong Insureon is currently estimated at two pancakes. SM Group and Edison Motors. There is a strong view that K-Pop Motors has virtually no prospects.
Among the two, SM Group is considered a potential target for the acquisition. Ten years ago, he participated in the addition of Ssangyong Motor once, and SM Group acquired and revitalized companies that were collapsing, earning the nickname of the professional revival of insolvent companies. As a large company, it has sufficient financial power. It is currently in the preliminary due diligence stage and preparation of an acquisition proposal, and detailed outlines are expected to be revealed after September 15.
