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.

Monday, May 23, 2011

Pangda deal first and foremost a distribution deal

Bloomberg has a good article about the deal Saab has made with Chinese Pangda. To sum up some of the points:
  • The deal is first and foremost a distribution deal
  • Buying cars from Saab to sell in China does not need approval
  • Overseas investment under $100 million must be approved by Local Commerce Ministry branches
  • Investments over $100 requires national-level approval
  • China push for consolidation of the country's car manufacturers

The article says that there is a big chance that Chinese authorities will not approve Pangda's EUR 65 million investment in Saab. If so, then let's hope the distribution deal remains. One interesting thing to note though, is that EUR 65 million is "only" $93 million and should only need local approval.

The manufacturer of Saab vehicles in China has not yet been selected, and could very well be one of the three big companies. Which would make the consolidation part irrelevant.