For people with a sober mind, for people who do not suffer from a Stockholm Syndrome where hostages express empathy and have positive feelings towards their captors, the shotgun marriage between Saab and Chinese car distributor Pangda left many questions open. What was related through Spyker channels did not sound like business the way it is done in China.
What you will read will make much more sense than the breathless announcements by Victor Muller.
The interview answers some questions we had asked all along, for instance the question of the miraculous arrival of €30 million by last Tuesday. Pang Qing Hua explains: (Read More…)
Saab has received wire transfers of around €30m from both Gemini Investments and the Chinese dealer group PangDa, reports Aftonbladet, and it will be using that money to pay off its supplier debts which could use up most of that cash (Saab’s supplier debts are estimated by DI.se at between two hundred and four hundred million kroner, or as much as €44m). Leaving aside the issue of how that money was able to be transferred from China to Sweden in a matter of two days (more on that from Bertel here, the short version: the deal should need Chinese government approval), there are serious questions about Saab’s ability to restart production. After all, the €30m from Gemini is debt, while Saab owes PengDa for an undisclosed number of vehicles that it bought with its investment. Unless those cars are sitting somewhere waiting to be shipped, Saab will have to pay off its suppliers and then build the cars on what is essentially credit from PengDa. Meanwhile, that’s not the only demand on Saab’s finances and attention, as CEO Victor Muller is planning on taking a bonus of over half a million dollars, a decision that is creating fresh problems of its own.
Despite deep skepticism about the value of Saab’s latest “alliance” with the Chinese dealer group PangDa, it seems that the Swedish automaker will restart production next Wednesday. SaabsUnited translates a DI.se report
“I expect the plant to begin production on Wednesday of next week since they’ve come to the Saab on Tuesday this week,” said Gunnar Brunius, Purchasing and Production Manager at Saab Automobile to DI.
On Tuesday, he initiates the process of agreeing with Saab’s 800 suppliers so that they start to deliver the components again after a six-week shutdowns.
The major suppliers, including IAC, Sweden, Plastal and car seat manufacturer Lear, are invited to personal meetings, while many other contacts are handled through e-mail.
Saab will reportedly restart production at a rate of 230-240 cars per day, but first it will have to pay off suppliers. We’ll see if that actually gets accomplished before we take this report too seriously, especially since CEO Victor Muller has admitted that negotiations with suppliers could take “several weeks.” But, Muller tells Saab employees that “we will never give up,” so who knows how long Saab’s death throes could last.
Rick Kranz, product editor at Automotive News, had an epiphany: “To understand Victor Muller’s obsession with China, you need to understand where that market is headed,” Kranz wrote. Ok, enlighten us, sensei. Where is it headed? (Read More…)
Victor Muller is getting desperate. Hard up for cash, he is willing to sell 24 percent of Saab to a car dealer in China. It’s not any car dealer, but Pangda, one of the larger chains in China. According to a Spyker press release, Pangda has “over 1100 dealerships nationwide”, according to Pag Da’s own profile (see below) is has about half of that. Be it as it may, it is a dealer group, not a larger automaker. Not even a smaller one. (Read More…)
Saab’s deal with the Chinese automaker Hawtai has failed in a predictable manner, as the struggling Chinese partner apparently didn’t receive government approval for the deal. Saab-Spyker’s announcement of the deal’s collapse explains [via AN [sub]]
Since it became clear that Hawtai was not able to obtain all the necessary consents, the parties were forced to terminate the agreement with Saab Automobile and Spyker with immediate effect. The parties will continue their discussions about a possible cooperation, however now on a non-exclusive basis
This isn’t the first time that the Chinese takeover of a Western brand failed due to the Chinese government’s insistence on industry consolidation, as the Hummer-to-China deal failed for similar reasons. Meanwhile, we should have seen this coming a mile away…
Saab has started paying suppliers again (although production hasn’t restarted yet), and CEO Victor Muller is once again all popped-collar confidence as he dismisses the “speed bump” that he blames on negative publicity. But behind Mueller’s yacht-club breeziness and talk of “true Saabs,” major changes are afoot in Saab’s business model. Saab’s deal with Hawtai, the product of a desperate search for support in the midst of a liquidity crisis, has changed how Muller sees the global car business, and as a result he’s shopping what may be Saab’s last meaningful asset: Western dealerships. Muller explains his thinking to Automotive News [sub]
We laughed when the Japanese came. We laughed when the Koreans came. But we will not be laughing when the Chinese come. The Chinese are like a steamroller. It took 67 years to build up our dealer network. It is the biggest asset not on our asset sheet, and these guys buy into it for free. If they make the proper cars, can you image how much simpler it will be to push product through the distribution network that is already there? It is like a railway network that is already there.
Bertel and I have a running bet about whether the first actual Chinese import to the US (not a converted glider) will be a Chinese brand or one of the western brands… but it’s not much of a bet because neither of us can ever commit to picking one brand that seems most likely to bust America’s Chinese car cherry, and our “bets” change on a weekly basis. In any case, though, think it’s safe to say that neither of us saw Saab as playing much of a role in any of the scenarios we’ve discussed.
As expected, troubled Saab has been thrown a lifeline by China’s Hawtai. Spyker announced today that its Swedish unit Saab has secured €150 million ($222.5 million) in funding from Hawtai. The Chinese company will be able to produce and sell Saab cars in China.
Hawtai will invest €120 million for a 29.9 percent stake in Spyker and provide a €30 million ($44.6 million) convertible loan to Saab. If the convert is exercised (which is pretty much a given – it matures in 6 months with a 7 percent interest rate) it converts at €4.88 a share, says the Wall Street Journal. (Read More…)
Saab and the Chinese automaker Hawtai will announce “an exciting strategic partnership between both parties” at a press conference scheduled for tomorrow, reports MarketWatch. According to Saab/Spyker CEO Victor Muller,
the deal involves “investing in Spyker.”
Hawtai was previously a joint venture partner of Hyundai, and had been approached by Chrysler as a possible partner. The firm reportedly has an annual production capacity of 350k vehicles, 450k automatic transmissions and 300k (Euro IV and V-compliant) diesel engines built under license from VM Motori. The B11 (above) is the firm’s first own-brand sedan, although over the next three years the firm has “plans to launch six more diesel or diesel-electric hybrid passenger cars.” According to chinaautoweb, Hawtai’s gamble on its giant diesel engine plant, the largest and most sophisticated in Asia, may not be panning out as diesel availability has been an issue in the Chinese market, due to high demand from the trucking industry.
Saab’s got a new short-term lease on life, as Automotive News Europe [sub] reports that the Swedish brand has secured a €30m, six-month convertible loan from Gemini Investment Fund. Saab is also requesting a €29.1 drawdown of its EIB loan, and when that is approved next week, Saab will reach the €59.1m in liquidity it needs to restart production. According to another piece by Automotive News [sub], Saab is still in talks with the Chinese automakers Great Wall Motor Co., China Youngman Automobile Group Co. and Jiangsu Yueda Group Co. in hopes of securing an additional investment in the struggling Swedish automaker, as well as a joint venture for Chinese production of the next-generation 9-3, and a possible Chinese market distribution deal.
Meanwhile, Saabsunited reports that several companies have been told to stop development on that next-gen 9-3 while the company gets back on its feet, meaning it could be delayed into the 2013 timeframe. And while Saab sacrifices long-term development for short-term survival, the recent production shutdown is taking its toll: Swedish sales of the 9-3 are up, but the new 9-5 is falling off (128 sold last month) as stocks dry up. The drama continues…
Saab will either be owned by Russians or Chinese. That’s the way it looks today. Which is no guarantee that it will look the same on Monday. (Read More…)
Today, 3,700 employees of Saab received an invitation to come to an all hands meeting tomorrow, Wednesday. It will be a break from the doldrums. In Trollhättan, the lines have been down for three weeks now because Saab has no money to pay parts suppliers, reports Automobilwoche [sub]. Tuesday ended in Sweden without a solution. Suppliers, unions and Swedish politicians demand immediate action, or Saab will go down the drain.
Talk about a Chinese savior has died down. All hopes hinge on Vladimir Antonov, and the sale of the factory to the Russian, well, business man. The problem is: The real estate is collateral for a loan from the European Investment Bank (EIB). Saab told Automobilwoche that the sale is “no sure” due to harsh demands by the EIB. (Read More…)
He (silver grey tie) is Li Shu Fu, Chairman of Geely, and owner of Volvo. A few days ago, we reported that Saab’s Russian rescue by Vladmir Antonov is running into flak from Brussels, and that Victor Muller is looking to China. To a niche player in China, no less. Victor Muller thinks he will maintain more independency that way. Dream on. If a Chinese buyer buys a foreign brand, then for getting credibility in the export market. That is Geely’s play with Volvo. (Read More…)
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