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.

Tuesday, May 17, 2011

"This opens fantastic possibilities for Saab"

Yesterday the big news was that Saab has signed a Memorandum of Understanding with Chinese Pang Da Automobile Trade Co for the distribution and manufacturing of Saab vehicles in China. The deal consists of a part where Saab sells cars to Pang Da and receives EUR 30 to 45 million immediately and a part where Pang Da invests EUR 65 million in Saab's parent company Spyker when the necessary approvals are given. As Pang Da is a distributor and not manufacturer of cars, a Chinese manufacturing partner will be announced later.

The deal was signed at five o'clock Monday morning Chinese time after three to four days of intense negotiations around the clock.

-What's so great with this deal - in contrast to the previous deals - is that we already have gotten EUR 30 million from Pang Da, Victor Muller said to SvD.

A new Chinese deals just days after the first deal with Hawtai was terminated does of course lead to many so called automobile experts being skeptical, but that is not the case with automobile analyst Matts Carlsson who Swedish business media E24 has had a talk with.

- If this deal holds up, Saab will get access to an extensive Chinese dealer network. This opens fantastic possibilities for Saab, Matts Carlsson told E24.

- They buy a fairly large number of cars that they probably want to sell immediately on the Chinese market, Carlsson continued saying. Another aspect is that this, despite all that has been said, shows that there are quite a few Chinese stakeholders who think that Saab is interesting, and who are willing to invest a lot of money in the company.

Compared to the deal with Hawtai, Carlsson thinks this new deal is better.

- These are two very different deals. Hawtai is a car manufacturer and so the question of car manufacturing remains for Saab, but that's not a urgent question. The major problem for Saab has been to sell their cars. Now they enter the Chinese market in a very significant way. Pang Da seems to be a much better alternative, says Matts Carlsson.

The payment from Pang Da for the first 1,300 cars is expected today and Gunnar Brunius, Vice President Purchasing & Manufacturing at Saab, expects the manufacturing at Saab's Trollhättan plant to be up and running again in the middle of next week.

- I expect the factory to begin production on Wednesday of next week if the money is received by Saab on Tuesday this week, Brunius said to DI. The plan is to produce 230 to 240 cars each day.

Today the work to reach agreements with Saab's 800 subcontractors and suppliers starts. For the biggest suppliers there will be arranged meetings, while the smaller suppliers will be handled by email.