Just a little over one hour ago Saab announced a deal with China's biggest car distributor Pangda Automobile. Here are my immediate thoughts about the deal.
As far as I can understand, Saab's deal with Pangda is even better than the deal with Hawtai. Why? Because Saab hasn't sold any technology. Saab has "only" entered into a deal which covers distribution and joint-venture manufacturing. And for this Saab gets EUR 65 million in fresh equity and up to EUR 45 million in initial vehicle sales.
This means that one of Saab's most valuable assets when negotiating with Chinese car manufacturers, the state of the art Pheonix car architecture is still up for sale! It is impossible for me to set a value on this technology, but the cost to develop the architecture must have been hundreds of million euro. There are potential for considerable incomes from licensing this technology to a Chinese car manufacturer.
In addition, Pangda has many more dealerships than Hawtai and has experience with distribution and sale of European premium brands.
The joint-venture manufacturing deal with Pangda requires that a second Chinese company, a car manufacturer, is included in the joint-venture. Can this mean a comeback for Hawtai? From earlier we know that Hawtai has unutilised manufacturing capacity and they produce Euro IV and V diesel engines, which Saab needs. But there are of course many other possible manufacturing partners for Saab, including Great Wall Motors, Beijing Automotive Industry Holding Co Ltd (BAIC) and Jinhua Youngman Vehicle.
All in all, this seems to be a very good deal for Saab.
A blog fueled by enthusiasm about Saab, the greatest car company between the North and the South Pole. And their cars, which probably is the only cars that would start on a cold and crispy South Pole morning.
