Posted by Dale Buss on May 16, 2011 06:00 PM
Never say never, but it looks like Saab finally has located a Chinese financial partner that will allow the venerable Swedish automotive brand a lease on life at least for a year, the Pang Da Automobile Trade group.
After an existential rollercoaster that already has seen Saab dun suppliers, lose credit from them, and idle its factory in Trollhattan, Sweden, Saab chief Victor Muller announced on Monday that his Spyker Cars – owner of the Saab brand after General Motors dumped it last year – has signed a tentative financing and import deal with the largest publicly traded car distributor in China.
Of course, it was just late last week that Spyker was supposed to be talking with Chinese SUV maker Great Wall about a hook-up following the collapse of its previous tentative deal with yet another Chinese vehicle manufacturer, Hawtai Motor Group.
The reason for all this confusion is that the Chinese government is trying to winnow its profligate automotive sector down into six to 10 long-term players that can serve the nation’s booming consumer demand for vehicles and also compete effectively with imported brands that have captured the native population’s fancy — and that really covet the growth dynamics there.
Yet at the same time, Chinese authorities are mindful that it would be a feather in the native capitalist cap if an indigenous company could take control of a western automotive marque with the prestigious history of a Saab. So the Chinese government apparently is winking at making this deal happen. And while there were reports that a regulatory thumb’s down doomed the tentative Hawtai deal, apparently there is less resistance to Pang Da’s helping out Saab because Pang Da at this point is only an automotive retailer and distributor – not yet another manufacturer.
Muller said that Pang Da’s infusion of equity would give it a 24-percent stake in Spyder , of course would help Saab further penetrate China, and would give the wounded brand at least a “medium-term” lease on life.
Saab sold a paltry 2,765 vehicles in the U.S. market, for instance, year-to-date through April. That’s three times as many as a year ago but a mere fraction of its glory days of several years ago. And it’s an indication of just how far Saab has to claw back to recover its once-considerable place in the pantheon of global automotive brands. Judging by the Facebook comments in response to the Pang Da news, it can't breathe a sigh of relief yet.