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.

Sunday, May 22, 2011

NDRC reminds everybody that they have the final say

Yesterday I wrote about a news piece in Svenska Dagbladet (SvD) that Jinhua Youngman Vehicle could have dibs on making a deal with Saab concerning joint venture manufacturing and investment in Saab. As we all know, Saab has signed a MoU with Pangda Automobile Trade Co. for both China manufacturing and investment in Saab. In the joint venture manufacturing the companies has agreed to bring in a third Chinese company, a car manufacturer.

The latest news in SvD was based on information from sources who attended a meeting in Beijing on 18 May between several Chinese car manufacturers and China's National Development and Reform Council (NDRC), which is China's top economic planning body. At this meeting the NDRC supposedly made it clear that Youngman has the first right to make a deal with Saab. Youngman is the only company who has applied to the NDRC to make a deal with Saab, and only one Chinese company can apply at a time.

Another source of information about the Chinese auto industry, China Car Times, reports that the purpose of the meeting was to communicate that "Pangda should not be overly competitive behind the backs of other companies, they need to communicate more."

To SvD Victor Muller has said that his sources from the meeting, which was first hand sources, did not indicate that Saab's deal with Pangda should be in any kind of danger. And to TTELA Muller said the following about information in the press about the deal with Pang Da being in jeopardy: "There has been a misinterpretation on this issue".

Swedish Radio has been in contact with the China expert Frédéric Cho at the Swedish Handelsbanken. His interpretation of the latest confusing news reports is that the Chinese authorities only wants to make sure that the best suitable company partners up with Saab.

 "They are very careful to ensure that it is the right company that gets involved in this deal and that it has a solid financially and industrially position and the right experience," Frédéric Cho told Swedish Radio.

"They watch perhaps also with some concern that there are many Chinese car companies who think this is a good opportunity to get foreign technology, and that there will be a bidding war, an unnecessary bidding," he continued. Cho do not see this as an end to the deal between Saab and Pang Da, but Saab should reflect on the fact that the NDRC has the final say if a deal goes through or not.