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, October 31, 2011

Saab Auto Group - plans and future

Please welcome Saab Auto Group, which consists of Saab Automobile AB with subsidiaries and Saab GB Ltd. This is the name given to the future Saab in the reconstruction plan which today was made available (and now even in English) to the Vänersborg District Court and the creditors of Saab Automobile. Saab has also published a press release with information on future plans.

From the organizational chart above we can see that in addition to the Saab we know today, two new entities will be established for the Chinese market. A China distribution entity which will manage all sales operations in China, and a China manufacturing entity which will provide manufacturing facilities in China and building Saab vehicles both for the Chinese and the worldwide market.

Development of the vehicles manufactured in the China manufacturing entity will take place within Saab Automobile AB in Trollhättan.

The plan confirms that the Chinese owners to be are ready to invest heavily in Saab. First Saab will get a EUR 50 million bridge loan to get through the reconstruction process. The medium- and long-term funding will consist of at least EUR 610 million to get Saab through 2012 and thereafter. In additon, another EUR 63 million will be loaned from the European Investment Bank under the current loan agreement.

On the cost side, Saab has a plan for immediate reduction in structural cost of SEK 1 billion. This will include leting 500 employees go.

Both Pang Da and Youngman have a long term plan for Saab and are not looking for short term profit. The plan is that Saab will be profitable from 2014. Until then the Chinese owners will cover the losses.

In addition to financial support, Pang Da will contribute with its distribution capabilities and can thus ensure immediate access to the Chinese market. Youngman will contribute with its production capabilities.

The Saab 9-5 SportCombi will be launched in 2012. The Saab 9-5 series will get a sub 120 g/km engine option.

The next Saab 9-3 will be introduced in 2013/2014 with a new and for the segment unique fastback and a convertible.

High on the list of priorities is also a new compact Saab. And a compact Saab will together with the Saab 9-4X contribute to 40 per cent of Saab's global sales in 2017.

The aim is to sell 35,000 to 55,000 Saabs in 2012, and then increase to 78,000 to 86,000 in 2013. In 2014 it is expected that Saab will sell 130,000 to 150,000 cars and in 2015 170,000 - 190,000 cars and from 2016 185,000 to 205,000 cars.

To rebuild trust in the Saab brand over the next 2-3 years the following is listed as examples:

Targeted at Dealers:
*Organize re-start and productevents
*Temporary incentives for new orders
*Support dealers in recruiting (sales, service)

Targeted at Fleets and Leasing Companies:
*Organize re-start events
*Subsidize residual values on selected volumes

*Temporary order bonuses

Targeted at Customers:
*Loyalty incentives
*Offer service packages
*Offer test drive campaigns