Cash-strapped SsangYong Motor said Monday it is seeking to reengineer its business with a strengthened self-rescue plan to race back on the road to profitability.

The South Korean unit of Indian carmaker Mahindra and Mahindra -- which held two rounds of negotiations with the labor union last year -- has been focusing on normalizing its business.

To improve its fiscal health, the automaker’s employees have agreed to reduce or stop 22 welfare benefits -- such as support for medical cost and tuitions, sabbatical year for those who worked for at least 25 years and return of annual bonus. 

The company said up to 90 percent of its employees have agreed to participate in its endeavor to improve operations, financial status and secure competitiveness for future business. 

Hit by the latest outbreak of COVID-19, the company’s sales have worsened. In February, sales dropped 27.4 percent on-year to 7,141 units, mainly due to the sluggish domestic auto market, shortage of parts such as wiring harnesses and weekslong suspension of its manufacturing plant. 

According to SsangYong Motor, to overcome the aggravated business environment, it is strategically partnering with its parent company to develop new vehicles through mutual sourcing and sharing platforms to minimize investment risks, as well as create synergies. 

Earlier this year, M&M Managing Director Pawan Goenka visited Seoul to meet employees and stressed the role and responsibility of the Indian company as the largest shareholder to normalize operations.

Despite a difficult business situation for automakers globally, it has recorded sales of over 100,000 units annually for four years in a row since 2016.

Its flagship open-type sport utility vehicle Rexton Sports logged annual sales of 40,000 units for two years. Launched in 2018 January, the model has led domestic sales of SsangYong Motor since its launch. Following the popularity here, the automaker launched a long-body model, the Rexton Sports Khan, last year. 

Along with self-rescue plans to secure competitiveness, the automaker said it will launch its SUV modes Korando and Rexton Sports in Europe to raise brand awareness and expand sales. 

“The company’s self-rescue plan to create new opportunities will work as an impetus for all employees and become a foothold to make sustainable business growth. We will put all-out efforts to focus on securing competitiveness to overcome the crisis as soon as possible,” said an official. 

By Kim Da-sol (ddd@heraldcorp.com)