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SsangYong Motor Co has sold its local after-sales service center in Guro, Seoul, for 180 billion won to local asset management firm PIA to help it survive a liquidity crunch.
The South Korean unit of Indian carmaker Mahindra & Mahindra Ltd., explained that the sale of the non-core asset is part of its efforts to improve its financial status and secure funds for investments.
The sale and lease-back deal will allow SsangYong Motor Co to use the Guro service center for three years.
SsangYong Motor's struggled due to a lack of fresh capital from its parent firm and declining sales caused by a lack of new models.
Mahindra announced early this year it would infuse 230 billion won into SsangYong for the next three years. Still, its board voted against the investment plan with the COVID-19 outbreak hampering vehicle sales worldwide.
Instead, Mahindra offered a one-time infusion of up to 40 billion won over the next three months.
Still, SsangYong's fate hangs in the balance, depending on vehicle sales.
From January to April, the company's sales plunged 33 percent to 30,952 units from 45,908 last year.
