UPDATE 3-Ssangyong Motor seeks bankruptcy protection

(Adds SAIC statement in paras 7-9)

By Cheon Jong-woo

SEOUL, Jan 9 (Reuters) - Ssangyong Motor Corp (003620.KS), hit by the global slump in car sales, filed for bankruptcy protection on Friday, but its Chinese parent said it had not given up hope of reviving the South Korean automaker.

Global automakers are suffering the worst business environment in recent memory. Demand has plunged as the financial crisis spreads, squeezing credit and denting consumer confidence.

Ssangyong's move may give top shareholder SAIC Motor Corp (600104.SS) an exit route amid worries about overcapacity in the global auto industry, analysts in Seoul said.

If the court accepts Ssangyong's filing, SAIC, which has a 51 percent stake in Ssangyong, will keep its stake but will have to relenquish control of the firm to the court.

"(Receivership) seems to be a way for SAIC to get out of Ssangyong. SAIC appears unwilling to invest further in Ssangyong as the global industry is facing an overcapacity problem amid slowing demand and it is not clear how much money would be necessary to revive Ssangyong," said Song Sang-hoon, an auto analyst at Kyobo Securities.

But Ssangyong officials insisted SAIC would continue to play its role as the top shareholder and help Ssangyong revive.

After the market closed on Friday, SAIC, China's biggest car maker, said in a statement it would work with all parties to try to normalise operations at Ssangyong. SAIC paid $500 million for 49 percent of the South Korean firm in 2004.