Last week, Saab appeared to have found a saviour in the Chinese car company, Hawtai, but that deal quickly went sour. This week, another Chinese white knight promises a reprieve for the long-suffering Swedish automaker. But is it enough to ensure the brand’s survival?
The new player in the game is called Pangda Automobile Trade Co. and the memo of understanding it has signed sounds less complicated than the deals proposed by Saab’s previous suitors, perhaps enhancing its chance of success.
Pangda is a major automobile distributor in China, but not a manufacturer. The two-phase deal includes an agreement to purchase 45-million Euros worth of Saabs to sell in the world’s largest market.
As a straight buy-and-sell agreement for product it should require relatively few approvals, and may provide some short-term relief for Saab.
Production at Saab’s Trollhattan plant in Sweden has been halted for several weeks because the company has been unable to pay suppliers, who won’t continue providing parts until they’ve been paid.
An initial payment of 30-million Euros, against the vehicle purchase, would provide working capital from which to pay them, according to Victor Muller, CEO of Saab and its parent company, Spyker Cars NV.
The second phase of the deal is more complicated. It involves not only the purchase of more vehicles from Saab but also Pangda taking a 24-percent stake in Spyker at a total cost of 65-million Euros. According to Muller, that sum may be enough to keep Saab going for up to a year.
That phase of the deal, however, is said to include potential Saab production in China by an as-yet unidentified third party and it requires multiple approvals from within China, as well as from General Motors, Europe and the Swedish National Debt Office.
So, don’t count on it happening quickly. The Saab story is a long way from over yet.
