SsangYong Motor has gained approval from the South Korean court to implement its restructuring plans.
The plan includes a new model programme and a reduction in workforce by over a third.
Paul Williams, managing director of SsangYong's UK distributor Koelliker UK, said: “This is the news we were hoping for and it means that SsangYong now has the lifeline it needs to implement major changes.
“The future will continue to be difficult, as it is throughout the auto industry, but the result should mean a leaner, much more efficient SsangYong. We already know that there will be a broader range of passenger cars and the first – the C200 – will go into production later this year. Our dealers can now go forward with renewed confidence.”
SsangYong applied for, and was granted court receivership in February after the fall-out of the international credit crunch, a drop in demand and even higher raw material, oil and energy prices.
Court receivership is similar to US Chapter 11 status, giving the company protection from creditors and time to formulate and implement a corporate resuscitation plan.
Under the arrangements, the court appointed former Hyundai Motor president Lee Yoo-il, and SsangYong vice-president in charge of finance, Park Young-tae as co-legal administrators.