Saab News

Following months of intensive negotiations and a long period of suspended production and tight liquidity situation at Saab Automobile AB, a voluntary decision has been taken to place Saab Great Britain Ltd ("Saab GB") into administration. With immediate effect, David Dunckley and Daniel Taylor of Grant Thornton UK LLP have been appointed joint administrators of Saab GB. Saab GB, a 100 per cent subsidiary of Swedish Automobile N.V. ("Swan"), has exclusive rights to distribute Saab cars and parts in the UK. It employs 55 people in Milton Keynes and distributes the cars and parts to a 58 strong dealer network across the UK of which 20 are "Saab only" sites. Saab City, a wholly owned subsidiary of Saab GB employing 65 people, operates two Saab motor dealerships, one in Wapping and a smaller site in Fulham. The board of Saab GB is of the opinion that administration gives the company and creditors the necessary legal protection until it has secured the required funding for the company. The appointment of the administrator is effected by the directors of Saab GB. Once appointed, the administrator will take on the management powers of the directors. Swan continues discussions with potential investors regarding the sale of Saab Automobile AB and Saab Great Britain Limited.

Sinking Saab may have a new lifeline. Saab owner Swedish Automobile (SWAN) - formerly Spyker Cars -- has announced a memorandum of understanding with Pang Da Automobile and Zhejiang Youngman Lotus Automobile, who will buy 100 per cent of the shares of Saab Automobile and Saab Great Britain Ltd for ?100 million ($131m). The purchase is to be paid in instalments, but final agreement between the parties is subject to a definitive share purchase agreement between Swan, Pang Da and Youngman, which will be conditional on the approval of authorities, Swan's shareholders and other relevant parties. An important consideration for Swan to enter into the transaction will be the commitment of Pang Da and Youngman to provide long term funding to Saab Automobile. Court documents show the two companies plan to provide a ?50m ($65m) bridging loan and ?610m ($800m) long-term financing from 2012. The documents were released after the court ruled yesterday that Saab's reorganisation - and essential protection from creditors -- could continue, although the company is likely to eventually axe about 500 of its 3400 workers at their Trollhatten factory in Sweden as part of plans to cut the equivalent of $149m in costs. The former General Motors brand has been teetering on the edge of financial oblivion for more than a year after being sold by GM. However it's likely the new owners - who's first offer to buy Saab outright was rejected -- could parlay the brand's European heritage into an increase in sales in China's growing market, which has a ravenous appetite for premium western brands. Youngman and Pang Da have previously said they would add Chinese production lines to Saab's Swedish output, with the target of increasing the 2010 global sales of 32,000 - less than Volkswagen did in Australia's small market alone - to 55,000 next year,  85,000 in 2013 and 185- 200,000 long term.  

The former General Motors brand has been catapulted closer to financial oblivion after being denied bankruptcy protection. A Swedish court overnight denied the application for bankruptcy protection made by the company, which has been teetering on the brink of oblivion for more than a year after being sold by GM, with a failed bid to give it traction from supercar maker and new owner, Spyker. Saab owner, Swedish Automobile – formerly Spyker Cars -- filed the voluntary  bankruptcy protection application in the District Court in Vanesborg, Sweden. The application wasintended to protect Saab from creditors while giving it time to obtain further funding, start a reorganisation plan and restart production, while continuing being able to pay salaries. Saab’s Trollhattan factory in Sweden has been stalled, and the inability to pay its 3700 workers for the past two months has led to bankruptcy threats from labour unions. The company is seeking three months of court-appointed protection from its creditors while it awaits Chinese regulatory approval for its AUD$325 million joint-venture deal with Pang Da Automobile and Zhejiang Youngman Lotus Automobile. The bankruptcy protection and any court decision does not include Saab Australia, whose managing director Stephen Nicholls says the overnight news was an unwelcome surprise. "Obviously the news is not something we were hoping to wake up to," Nicholls says. "We were hoping the court would grant this. But obviously we are going to appeal the decision, and it will take about a week to go through the process and lodge the appeal. Nicholls says he doesn't have detailed information on why the application was refused, but that the appeal would make a stronger case. "I haven't seen the judgement itself and I'm not qualified to comment on the details of the judgement. But we believe there must have been some shortcomings in the submission as we believe the case itself is sound," he says. "We just need to plug these gaps and supply extra information if required, and we're confident it will then be successful. The burden of proof is just to demonstrate we have the funds, and we're going to go back to the drawing board and this time overload them with information." Nicholls says that the operations of Saab in Australia are not affected by the court decision. "Saab Cars Australia was explicitly excluded from the application -- as was the US and so on. But ultimately our  fate is linked to the paretent compay and we are carrying on trading, still honouring warranties and supplying parts. "We're funded, we're trading --- in the meantime we carry on and wait for news from the frozen north."  

The struggling Swedish brand’s PhoeniX concept has just been handed the Auto Express design award.

The Swedish factory is back in action again after months of protracted ownership issues. Saab Cars Australia managing director Stephen Nicholls admits that sales have been "pretty slow". "We're all very pleased that we're starting to get back to normal operation," he says. "We've been trying to conduct business as usual, but of course some people are a bit hesitant until they see cars coming off the production line. It's been a difficult time but we had faith it would be sorted out." "We're a real car company again." Saab Automobile this week restarted production at its Trollhattan factory for the first time since April 6. The daily production rate will be increased in coming weeks to meet worldwide orders of 6500 vehicles, including 1300 destined for China. The halt in production occurred while complex ownership and financial issues were sorted out with European and Chinese investors. "There's not a magic bullet but a number of different solutions," Nicholls says. He says the halt in production had not caused any supply problems, but it may delay the launch of the new 9-5 Sport Combi by "a month or two". "Before the shutdown we had the stock to go through to July but we do have a few cars delayed until August," Nicholls says. Saab Cars Australia has "pretty reasonable supplies" of the full range of 9-3 models (Sports Sedan, Sport Combi, Convertible and 9-3X SUV launched in March) and the 9-5 Sedan (Aero and Vector petrol and diesel) launched in April. Saab Cars Australia is a fully owned factory operation which is taking over responsibilities from GM Holden. "We are still in the process. There has been a prolonged handover," Nicholls says. "They are still doing parts distribution and warranty processing, but we intend to take that into our house in the next month or two. "We're working on the transition with our colleagues at Holden and it is being planned as we speak and will work pretty smoothly. I'm not aware of too many problems at the moment that will cause us too many sleepless nights." "As far as the customer and dealers are concerned there is no change except address." Saab has eight dealers in all states except Tasmania and up to 15 service outlets. Only 17 Saab vehicles (six 9-3s and 11 9-5s) were sold last month for a total of 41 so far this year. "We would like to be selling a few more, but news out of the factory in last six weeks or so has meant some people have held off on purchases," Nicholls says. "Now we're running normally we will re-contact those people and get them to buy a Saab."

Since General Motors pulled the pin on it last year, it's recent history reads like a soapie that's full of financial lows and potential highs mixed in with a globetrotting search for a new shareholder.It was to be spun off from its single biggest shareholder Spyker, then failure to secure funds saw its suppliers shut the doors, abruptly ceasing production.Then there was an agreement with China's Hawtai Motors but that was scrapped after no-one could agree to the terms, then a rumoured deal with Great Wall Motors - denied by the Chinese - and now another China relationship.Saab overnight issued a press release saying it has signed a memorandum of understanding with car distribution company Pang Da Automobile Trade.Pang Da is the biggest public - it listed three weeks ago - vehicle distribution chain in China with 1100 dealerships. Saab says the memorandum commits the Chinese company to this month buy about $41 million worth of Saab cars and then another $20 million worth next month.Pang Da will also pay $90 million for a 24 per cent stake in Saab's parent, Spyker.For Saab, the deal represents a 50 per cent ownership in a distribution joint venture to sell Saab products. A separate 50 per cent stake in a manufacturing joint venture has also been agreed upon, though the manufacturing partner has yet to be named.The manufacture would be of Saab cars and Chinese-badged Saab "clones". Spyker and Saab CEO Victor Muller says the partnership would "create a strong business, initially in the distribution and subsequently in the manufacturing of Saab vehicles in China"."Pang Da is a forward-looking, profitable and well-capitalised public company that, as the single largest automobile distributor in China, sees enormous potential for our brand in their home market," he says.The CEO of Pang Da, Mr Pang Qinghua, says the deal will "further enhance the competitive position of the Saab brand in China"."With the new products Saab has launched since it became an independent car manufacturer early last year, such as the all new Saab 9-5 and the Saab 9-4X which have been widely acclaimed, and not in the least the upcoming successor to the current Saab 9-3, we believe the timing is perfect for Saab to enter the Chinese market,' he says in a statement."Our size, financial strength and competence in addition to our ability to move fast will be crucial to Saab's success in China." But it's not cut and dried yet. Saab says that some of the transactions are subject to "consents from certain Chinese governmental agencies, the European Investment Bank, GM and the Swedish National Debt Office."

..failing to secure the Beijing government's consent to go ahead. "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,'" Saab's owner, Zeewolde, Netherlands-based Spyker Cars NV said in a statement. "The parties will continue their discussions about a possible cooperation, however now on a non-exclusive basis." Victor Muller, chief executive officer of Spyker, said. Saab's regional director for Asia-Pacific, Stephen Nicholls, told Carsguide today: "Three or four people in the world who know what's going on. Victor Muller is one and he's in Beijing." "My understanding is that Hawtai's exclusivity deal expired on May 13 today. As a result of that expiring and them not being able to complete the deal we're still in discussion with them but no longer exclusively so.'' The agreement was to allow Hawtai produce Saabs for the Chinese market, starting next eyar with the new 9-3. The deal also required the approval of the European Investment Bank and the Swedish National Debt Office, which is guaranteeing a loan to Saab from the EIB. "It's been reported that Great Wall are interested but Hawtai is still in there," Nicolls said. "We've no idea what the hold ups were but deals in China of this kind take some time. We have very few hard facts. "Our experience is that we only open our mouths to make fools of ourselves." He added a statement from Muller was likely in the coming days. Saab is still in talks with the European Investment Bank to complete a $41 million loan drawdown. The copmpany is also reportedly waiting on approval to sell some of its property, since the land is currently used as collateral with the Swedish National Debt Office. Having secured a $50 million Swedish government to stay afloat is still looking to strike a deal with Russian banker and former major shareholder in Spyker, Vladimir Antonov.

The Swedish brand has struggled for cash since it was sold by General Motors to the Spyker sports car company and its entreprenurial owner Victor Muller, but has now formed a strategic alliance with the Hawtai Motor Group. The Chinese company is investing a total of $203 million in Saab through a 29.9 per cent shareholding and a loan that matches an earlier financial boost from the Gemini group in Europe. The new money means Saab's production line at Trollhatten will begin operating again next week after a shutdown triggered by component companies that had not been paid. "Production is going to re-start at the earliest on Monday, and the latest on Tuesday," Saab chairman, Victor Muller, says in a telephone hook-up from Europe. He believes Saab now has the cash it needs to go forward, as well as a strategic partner that will produce the 9-3 in China and also handle distribution of other Saab models in the world's fastest-growing car market. "All things being equal, I hope we've seen the last of the growing pains," says Muller. He is enthusiastic about everything from the prospects of Saab's much- needed baby car, the 9-2, to the potential for a large SUV for China, but says it is too early to get into detail. "We're currrently putting together a business plan for the joint venture." Muller says Saab was approached by a dozen companies about some sort of partnership, but Hawtai was chosen because it is a similar size to Saab and has similarly aggressive management and growth plans. "We have been courted by at least a dozen individual mnaufa for cooperation in China.We chose this one for many reasons, but one in particular is that it is a very entreprenurial company. Their size is very attractive. So they are a very equal partner."

The baby 9-2 will have separate parentage and could easily be fostered by BMW Group, but everything else will be Phoenix under the skin. The news comes as the Swedish maker gets serious about an Australian comeback with its flagship 9-5, a classy looking prestige sedan that's priced from $71,900 and only let down by shonky suspension. "Phoenix is the future of Saab. It's the mechanical platform for everything we do, except for the small car. It's demonstrating our independence and capability to survive by ourselves," Steve Nicholls, managing director of Saab Cars Australia, tells Carsguide. Saab has already previewed Phoenix with a concept car of the same name at this year's Geneva Motor Show. It was cartoonish in some ways, but strip away the outrageous body bits and you reveal the 9-3 underneath. "The big news comes in 2012, probably quarter three, with the launch of the all-new Saab 9-3. That will be based very much on the Phoenix car that was shown in Geneva. The underpinnings we showed in Geneva are pretty much the car," Nicholls says. Saab will soldier through until then with a lineup of current 9-3 models and the 9-5, as the 9-4X SUV is twinned with a Cadillac for the USA and is not available in left-hand drive. Nicholls says Saab has limited sales aspirations at present as it rebuilds support in Australia and expands a dealer network that has shrunk to just eight outlets. "Our job is to tick over and then gradually grow. We've got our first few batches of 9-3 on the ground and the 9-5 launch stock is here." He admits he is also fighting perceptions of problems following a factory shutdown in Sweden last week and overseas reports of financial trouble for a company that is not long out of General Motors' ownership. "Would I have chosen to have this happen? Of course not," Nicholls admits. "The funding is there, but the cash flow isn't. We've had a couple of unfortunate hiccups. "We've had losses, but they were within the parameters of the business plan. Hopefully we'll be in a profit making situation in 2012. Once we have the new 9-3 we should be making money. "We're here to stay. Saab has invested to be in Australia, it's a significant market for us and we were always one of the top 10 markets in the world. The fact that we've set up as a factory distributor, and not gone with an importer, shows we're taking this seriously."

The elegant newcomer faces a huge challenge in rebuilding confidence and sales, but has a lot going for it - including a starting price of $71,900 with a turbodiesel engine. There are three models in the lineup - two Vectors and the flagship V6 Aero Xwd from $94,900 - and they join the 9-3s which have already being providing trickle sales during the start-up phase of Saab Cars Australia. "We're here to stay. Saab has invested to be in Australia, it's a significant market for us and we were always one of the top 10 Saab markets in the world," says Steve Nicholls, managing director of Saab Cars Australia. "The fact that we've set up as a factory distributor, and not gone with an importer, shows we're taking this seriously." The 9-5 is a very serious car, slightly bigger than an E-Class Mercedes-Benz, and loaded with standard equipment from a six-speed automatic gearbox and leather seats to a head-up display for major instruments. In classic Saab style, the new-age push-start button is located in the console between the front seats, the traditional location for the company's ignition keys. The design of the 9-5 finally breaks away from the origami-style angles and creases favoured by so many European carmakers, with a number of smart visual tricks including a huge wraparound windscreen, a prominent grille and a wide-opening sedan boot. Cabin space is good and the final finishing work is what you expect in a Saab. But the 9-5 runs into some tough opposition in Australia, from the E-Class and BMW's brilliant 5 Series to the new Audi A6 and the Jaguar XF that's doing so well in Australia. Saab has had problems at its Swedish factory this week, culminating in a temporary shutdown at Trollhatten to sort problems with some suppliers, but Nicholls says it is only a hiccup. "We've got the funds we need. The company is well funded into the medium term. Cash flow is the problem.  This week we've been stopping and starting. So we've decidd to stop the factoyr this week, sort everything out, and start again next week," he says. Saab is targeting around 100 sales of the 9-5 this year, with 25 already on the ground of its small network of eight dealerships - although this will grow - and a similar number on a boat to Australia. The first Saab after the General Motors' disaster - first 20 years of neglect, then a fire sale - promises a lot.  The 9-5 looks good, is roomy, nicely designed and well finished. The diesel and four-cylinder Vectors are well equipped, and the flagship V6 has everything you expect at nearly $100,000.  There are some nice touches, too, including an effective head-up display - although this means you can actually have three different speedo readings from the regular speedo, head-up system and a rolling 'altimeter' that's a bit of a gimmick. All three cars get along well enough but there is a giant flaw - ride comfort.  Saab says it has always had a slightly sporty suspension tune but the 9-5 is harsh and jiggly on any surface, regardless of the suspension or tyres. Carsguide tried 9-5s with 17,18 and 19-inch tyres and standard and adjustable suspension, but nothing helped. There is also kickback in corners and some torque steer.  The suspension is a real pity because it is a nasty shortcoming in a car that otherwise does a good job. SAAB 9-5 2011 Price: from $71,990 Warranty: 3 years/100,00km + Roadside assist Engines: 119kW/350Nm (Vector TiD4), 162kW/350Nm (Vector Turbo4), 221kW/400Nm (Aero Turbo6) Body: Four-door sedan Weight: 1725-2065kg Transmission: 6-speed auto Drive: Front or All-Wheel-Drive Thirst: 6.7-11.3L/100km Fuel: Diesel or +95RON CO2: 177-262g/km