IMPORTANT NEWS: National Electric Vehicle Sweden has agreed to buy the assets of Saab Automobile and the sale is expected to be finalized during the summer.

Saturday, April 30, 2011

Saab close to a deal with Great Wall Motor

Updated with word from Antonov's spokesman Lars Carlström.

According to Dagens Industri, Saab Automobile AB led by Victor Muller and Jan Åke Jonsson is close to reaching a deal with Great Wall Motor Company of China. Saab's aim is to raise SEK 1.5 billion to SEK 2 billion, an amount that will secure further production at Saab. Saab's bargaining chips are technological knowhow and the newly developed PhoeniX architecture that will underpin the upcoming Saab 9-3 and other future models. Bloomberg reported yesterday that even an investment in Saab could be relevant, as well as a joint venture to produce Saab cars in China and the distribution of Saab cars through the Chinese companies dealerships.

TTELA reports that Vladimir Antonov, the Russian banker who wants to invest in Saab, is familiar with the discussions in China and an agreement with a Chinese company will not affect Antonov's plans for Saab. Antonov is not present in China, but gets updates on the discussions. Eric Geer, spokesman for Saab, told the news agency TT that the negotiations in China is intense, but he would not comment on the content of the discussions.

According to Wikipedia, Great Wall Motor was formed in 1976 and is best known for being the largest producer of SUVs in China. Initially the company only produced SUVs due to lack of state license to produce sedans, but starting from 2008 it is also producing traditional sedans. Great Wall Motor was listed on the Hong Kong stock exchange in 2003 and was the first private Chinese auto manufacturer to become a public company. A new technical center will open in Baoding in the Hebei province in China in 2012, and lately the company has shown ambitions towards Europe and will open a factory in Bulgaria this year. Last year Great Wall Motor sold 360,000 vehicles and reached a profit of over SEK 3 billion.

From what I can read, Great Wall Motor is an ambitious Chinese car manufacturer that only recently has begun producing and selling sedans. They seem eager to expand their business in Europe. For Great Wall Motor Company it would of course be a giant leap forward to be licenses to use Saab's PhoeniX architecture, which we must assume is an architecture with world leading safety and handling. We know from earlier that the PhoeniX architecture use a modular approach and is suitable for mid-sized to large cars and SUVs. In other words, it could fit perfect in at Great Wall Motor.

Right now from reading the news pieces, it seems like Great Wall Motor is the main lead, but Saab is also still in talks with the two other Chinese companies identified yesterday. A deal can be reached this weekend or early next week.