Saab fights back

Saab is tackling its cashflow crisis with real gusto.

Firstly, parent company Spyker announced a €30 million loan from Gemini Investment Fund Limited to tide over the Swedish car manufacturer in the short term. This amount, combined with a draw down of €29.1 million requested from the EIB (European Investment Bank), would help get the production line rolling again at the Trollhattan factory.

The announcement of the loan was followed today by the news that Spyker has entered into a strategic alliance with Chinese vehicle builder Hawtai. Company CEO and Chairman, Victor Muller, made the announcement at a press conference in Beijing at 4:30pm today, AEST.

Hawtai will invest €120 million to acquire a 29.9 per cent stake in Spyker and provide a €30 million loan for Saab to continue to execute its post-GM business plan. 

Based in Beijing, Hawtai has been an overnight success; founded in 2000, the company has production capacity sufficient to build 350,000 vehicles, 300,000 clean diesel engines and 450,000 automatic transmissions. Within four years, Hawtai aims to be able to build a million units of each (cars, engines and transmissions). Saab has its eye on Hawtai's clean diesel technology for the future.

"The partnership with Hawtai allows Saab Automobile on the one hand to continue executing its business plan since we secured the required mid-term financing subject to meeting certain conditions, whilst on the other hand it allows Saab Automobile to enter the Chinese car market and establish a technology partnership with a strong Chinese manufacturer," said Muller.

"We expect that Saab's unique brand values based on its aviation heritage, Scandinavian origins and innovation-driven character will do very well in the Chinese market. Our driver-oriented vehicles appeal to a whole new group of independently thinking customers who appreciate Saab's advanced designs, safety and responsible performance.

"With Hawtai's clean diesel engine technologies and production capacity, and its ambitious development programs, we have found the right partner to develop the Saab business and build a solid relationship."

As with Geely and its ownership of Volvo, Hawtai expects to acquire new technology and access to foreign markets through Saab.

"This is a great day for our relatively young company which was founded ten years ago," said Richard Zhang, Vice President of Hawtai.

"The partnership with the iconic Saab brand will give us access to innovative technologies and an international network which would have taken us decades to build. On the other hand we have a very strong Chinese manufacturing and distribution infrastructure which we will make available to our new partner Saab Automobile. Our participation in Spyker, Saab's parent company, demonstrates our commitment to the future of Saab Automobile as a premium European car manufacturer."

Local Saab MD Stephen Nicholls told the Carsales Network ahead of the Beijing announcement that the alliance suits Saab's long-term plans to re-enter the Chinese market.

"One of the things that Saab has been looking at over a number of years is the opportunity to really penetrate the Chinese market more successfully than we have -- and one of the things you need in order to do that is a local Chinese manufacturing base..."

Hawtai provides Saab with that China-based partner. Nicholls explained that Hawtai is one of China's top 20 car companies

"They have a track record of buying technology, buying into companies, forming alliances -- and they seem to see an opportunity with Saab."

During the local launch of the new 9-5 sedan, Nicholls had advised that Saab planned to ramp up its presence in China. With the market potential China represents, Saab needs to get its manufacturing logistics under control first.

Just days prior to the importer's launch of its new 9-5 large car in Australia, the factory in Trollhattan, Sweden, was reportedly forced to cease production when suppliers ceased delivering parts to the car company.

Hence Spyker has arranged the short-term €30 million loan for the on-going production of Saab cars to mollify Saab's creditors -- and the alliance with Hawtai "secures medium term funding".

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