Ssangyong Motor has decided to temporarily suspend operations of its Pyeongtaek plant. It is the first time in 10 years since 2009 when Ssangyong has started to cut production in 2009.
According to industry sources on July 3, it has decided to stop production of its Pyeongtaek plant worth 3.25 trillion won for the purpose of adjusting production volume to maintain proper inventory under the agreement between labor and management.
Production suspension amount accounts for 87.6% compared to current sales and the scheduled date for resumption of production is July 16.
Ssangyong Motor's inventory of its products came to 96.3 billion won as of the end of March, up 14.9 percent from the end of last year, according to the carmaker's quarterly report.
It has accumulated 12.5 billion won worth of inventories in the past three months. Considering that Ssangyong Motor's average sales price is about 25 million won, its inventory has increased by about 500 units.
The turnover rate of inventories came to 13.53, down 0.66 times from last year. This means that the lower the turnover rate becomes, the longer it takes for inventory assets to lead to sales, putting pressure on the company.
The inventory situation worsened in the April-June period. Due to sluggish domestic demand and exports, inventory is said to surpass 4,500 units, which is the right level, to reach 6,000 units. Its inventory is estimated to have exceeded 100 billion won.