• Sweden edition
 
SAAB CASH CRISIS
Saab secures partnership with Chinese firm

Saab secures partnership with Chinese firm

Published: 03 May 2011 09:43 GMT+02:00
Updated: 03 May 2011 11:25 GMT+02:00

The partnership with the Hawtai followed an announcement on Monday that Saab had secured short-term cash of €30 million ($44 million) to restart production within a week.

The agreement secures funding of €150 million for the cash-strapped Swedish firm. The deal is a joint venture and spans production, technology and distribution, Spyker Cars said in a statement.

"Our partnership with Hawtai secures our medium-term financing and this gives Saab Automobile a chance to enter the Chinese market. This also establishes a technology partnership with a strong Chinese car manufacturer," Saab chairperson Victor Muller said.

Hawtai is set to invest €120 million in Spyker Cars which in return will secure a maximum of 29.9 percent of the shares in the firm.

The remaining €30 million will be provided in the form of convertible loans for a period of six months and at an interest rate of 7 percent.

The confirmation of the partnership sent Spyker Cars' stock up 18 percent on the Amsterdam stock exchange on Tuesday morning.

"With Hawtai's technology for clean diesel engines and its production capacity as well as the firm's ambitious development programme we have found the right partner for the development of Saab and build a strong cooperation," Muller said.

Richard Zhang, Hawtai vice chairperson, in turn regards the Saab brand as an "icon" among cars.

"This gives us access to innovative technology and an international network which would otherwise have taken us decades to build up. This is a big day for a relatively young company which was formed only ten years ago," he said.

According to a Saab source cited by the Dagens Industri daily, Hawtai will begin manufacturing Saab cars in a factory in inner Mongolia.

The partnership marks the second time in under a year that a Chinese carmaker has invested in a Swedish carmaker.

In August last year, China's Geely bought Sweden's Volvo Cars, previously owned by Ford.

Speaking to reporters by phone from Beijing, Spyker chief Victor Muller said the partnership would be beneficial to both parties, just like acquiring Volvo was favorable to Geely.

He however stressed the deal was a partnership and not an acquisition, and thus very different.

Described by Spyker as an "agreement on strategic alliances partnership with respect to manufacturing, technology and distribution," Tuesday's deal comes a day after Spyker said it had secured a short-term cash injection of €30 million to restart production within a week.

"Saab is now well financed, it has secured its short and mid-term financing," Muller said. "That puts the liquidity crunch that the company went through in the month of April to bed."

The deal is still subject to approval and conditions including the consent of Chinese government agencies, the European Investment Bank and the Swedish National Debt office, Spyker said.

Muller told reporters he expected regulatory approvals to be obtained in six to twelve weeks and no problems in getting approval from the European Investment Bank, which loaned the carmaker money, were anticipated.

If it goes through, the partnership plans for Saabs destined to the Chinese market to be built at a Hawtai plant in China starting in 2013.

"Production in China is for China, and production in Trollhättan (in western Sweden) is for the rest of the world. There is no cannibalism here in any way, shape, or form," Muller told reporters, adding "the Saab 9-3 would be the first car that would be eligible for such local production."

"There is a tremendous benefit in sharing technologies," Muller said, adding the partnership would allow Saab to take advantage of Hawtai's distribution network, which could pave the way for the import in China of Saabs made in Sweden.

That would boost overall sales, he said, stressing it would not decrease production in Sweden.

Yang Jian, a China-based writer for trade publication Automotive News, described the transaction as a "win-win" situation.

"Spyker gets the money it needed and Hawtai gets access to Saab technology. Hawtai needs the help of an international brand, he said, according to Swedish news agency TT, describing Hawtai as a "small and fairly unknown company in China."

Hawtai has the capacity to produce 350,000 vehicles, 300,000 engines and 450,000 automatic transmissions per year, Spyker said.

In Sweden, Enterprise Minister Maud Olofsson, who previously said Saab would not receive any help from the state, applauded the partnership.

"I've said the whole time that for it to work in the long term there had to be private interests ready to invest the money," she said.

Saab union representatives also reacted positively.

"We have both the news that came yesterday about a short-term solution that will allow us to start production again, and now this for the longer term and it is obviously extremely good news for us," said Håkan Schött of the Metall

union.

TT/AFP/The Local (news@thelocal.se)

Your comments about this article

10:45 May 3, 2011 by SAAB101
It's the Chinese again coming to rescue Swedish "icon"!

They should have done this before when SAAB was in crisis last year. Without the money from BAIC for purchasing the used 93, 95 assembly lines, SAAB would probably already be facing this tough situation...

God bless SAAB.
11:15 May 3, 2011 by Eagle63
Better to enter a 'strategic partnership' with the Chinese than being owned by them, like Ovlov....
15:04 May 3, 2011 by 2394040
When the dust settles sometime in the future, China will probably own SAAB anyway.
15:34 May 3, 2011 by Stickeroo
Who cares who owns them. The way I see it, its only a short matter of time before either they go belly up or all their production goes overseas (Mexico was a good idea). Only a fool would produce something that labour intensive in a country like Sweden (not to mention shipping for all the parts to get here). They really need to re-think their entire program from start to finish. They need factories close to their parts suppliers, and somewhere with a more favorable labour atmosphere. Saab is a great brand, but that's not enough when your profit margins are so low. Then need to boost profits, and not through cheaper materials. That leaves assembly techniques and labour.
20:45 May 3, 2011 by hjoian
i dont know why saab sold out to GM in the first place....if it was because it was not making money,then i see little hope for it now,however, the "iconic" saab being made in inner Mongolia to hoards of Chinese may save it yet. IMO after the 9000 series,it all went down hill.
21:22 May 3, 2011 by 9395
died or live in other counrty? This may be the future of SAAB. In which country? Can SAAB make choice? Who has milk? Who wants to offer milk?
22:46 May 3, 2011 by Ivan Juric
Quick Quick run said the Tibetan monk, The Red Army is coming to slaughter us in their nice new shiny Saab's.
10:47 May 4, 2011 by Tony Hird
Sense at last, whatever ones personal thoughts on China. The future is cooperation with China the fastest growing economy in the world SAAB now has the oportunity to be part of that future.There are too many negatives expressed by people who only look backwards.Look forward to the oportunities becoming available for SAAB to become a major player at last on the world stage.
Today's headlines
Sport
Sweden's star striker Zlatan 'recovering well'
Zlatan Ibrahimovic is Sweden's top scorer in history. PHOTO: TT/Maja Suslin

Sweden's star striker Zlatan 'recovering well'

Zlatan Ibrahimovic is recovering well from the nagging heel problem that has stopped him playing for Sweden during its Euro 2016 qualifying campaign. READ  

International
Swedish sisters create viral Syria stir
A shot from the video on YouTube.

Swedish sisters create viral Syria stir

Two sisters from Södertälje near Stockholm are celebrating getting more than 1.3 million hits on YouTube, with a video calling for peace in war-torn Syria. READ  

Pirate Bay
Pirate Bay founder gets three years in prison
A 2013 image of Svartholm Warg. Photo: TT

Pirate Bay founder gets three years in prison

Swedish "hactivist" Gottfrid Svartholm Warg has been sentenced to three-and-a-half years in prison for hacking crimes. READ  

Royal family
Princess Madeleine to make Nobel comeback
Princess Madeleine at a previous Nobel banquet. Photo: TT

Princess Madeleine to make Nobel comeback

Sweden's Princess Madeleine is scheduled to appear at the Nobel Festival in Stockholm in December, after taking time out from her royal duties to focus on looking after her daughter. READ  

Politics
'We knew that Israel would be critical'
Foreign Minister Margot Wallström (left), with Sweden's Prime Minister Stefan Löfven. Photo: TT

'We knew that Israel would be critical'

Sweden's Foreign Minister has told The Local she respects Israel's decision to recall its ambassador after Sweden officially recognized the State of Palestine, and laughed off comments about IKEA furniture made by her Israeli counterpart. READ  

Analysis
'Store up your sunlight hours before winter'
Doctors say we should make the most of the autumn sunshine. Photo: Shutterstock

'Store up your sunlight hours before winter'

Spending time outdoors this autumn will help you survive a cold, dark Swedish winter. Baba Pendse, Head of Psychiatry at Lund University shares his top tips for battling the seasonal blues with The Local. READ  

Sports
Plot for shared Scandi Winter Olympic bid
Skiers hit the slopes in Åre, western Sweden. Photo: TT

Plot for shared Scandi Winter Olympic bid

Norwegian sports officials have said they want to co-host the winter Olympics with Sweden in 2026. But there has so far been no official response from Sweden. READ  

National
Anti-Israel graffiti 'not a race crime': Court
Photo: TT

Anti-Israel graffiti 'not a race crime': Court

A teenage boy who painted anti-Israel slogans and symbols on the Concert Hall in Gothenburg has been convicted for the damages he caused, but he walked free from racial agitation charges. READ  

Entertainment
A closer look at Sweden's rising stars
Swedish actresses Sandra Huldt and Julia Ragnarsson. Julia (right) has been nominated for a Rising Star award. Photo: TT

A closer look at Sweden's rising stars

Like to be ahead of the game when it comes to the next big thing on the silver screen? We find out more about the Swedish nominees for the Rising Star award to be presented at Stockholm's International Film Festival next week. READ  

Science
Swedish women in two-year sex pill study
Contraceptive pills have been linked to mood swings. Photo: Shutterstock

Swedish women in two-year sex pill study

Three hundred women from across Sweden are taking part in a study designed to demonstrate that modern contraceptive pills don't lead to decreased libido or mood swings. READ  

RECEIVE OUR NEWSLETTER AND ALERTS
Lifestyle
Stockholm's shocking take on Halloween
Sport
Top ten quotes from Zlatan Ibrahimovic
Business & Money
Get your own office in Gothenburg or Stockholm - free for a day
Gallery
People-watching: October 30th
National
Sweden remains fourth best for gender equality
Blog updates

31 October

Editor’s Blog, October 31st (The Local Sweden) »

"Hello readers, Welcome to our latest 60-second round-up of the week’s news. First, Sweden made headlines around the..." READ »

 

29 October

Scariest day (Blogweiser) »

"This is what’s frightening me on Halloween. http://www.youtube.com/watch?v=D4OFZVCu8J0&list=UUJu5J7jG4uoYSjWbpFsJBuQ Follow my posts on FB. ..." READ »

 
 
 
National
Timeline: Julian Assange sex allegations
Sport
World Cup ski race on 'fake' Stockholm slope
Society
An Arctic tradition: hunting and handicraft
Society
Stockholm taxis offer free therapy sessions
National
The Local meets Health Minister Gabriel Wikström
Gallery
Property of the week: Österåker
Society
Homeless turtles get Stockholm police ride
National
Construction worker has 'Sweden's best beard'
National
Italian musician jazzes up Sweden's Lapland
Gallery
Zlatan's career in pictures
Finest.se
Gallery
People-watching: October 25th and 26th
Lifestyle
'Swedes are funnier than they think'
National
Swedish town 'like Venice' after heavy rains
Lifestyle
What's On in Sweden: October 24th - 31st
Gallery
People-watching: October 22nd
Gallery
In Pictures: Prince Carl Philip and Sofia Hellqvist
Lifestyle
Eight things to love about renting a Swedish apartment
National
Vasa ship cannon blasted in Sweden
National
Sub hunt: Day-by-day
National
Sub hunt: Stockholm islanders share their fears with The Local
Sponsored Article
The best options for oversea transfers
National
Dentist gives free care to Roma beggars
Gallery
Property of the week: Malmö
Gallery
PHOTOS: 'Foreign activity' in Swedish waters
TT
Society
QUIZ: How good is your Swedish?
Society
The nudity... and nine other things expat men notice in Sweden
Gallery
People-watching: October 15th
Gallery
Your views: Should outdoor smoking be banned in Sweden?
Business & Money
Sweden has 'large hole' in finances
Sponsored Article
Introducing... Finding a job in Stockholm
Society
Monster salmon caught in northern Sweden
Gallery
Property of the week: Lorensberg
National
Scandinavia's child bride
National
Ebola crisis: How is Sweden preparing?
Business & Money
How Sweden is becoming a cashless society
Gallery
Stockholm Burlesque Festival 2014
National
How a little red horse became a symbol for Sweden
Gallery
People-watching: October 12th
Business & Money
The hottest start-ups from southern Sweden
National
Stockholm is 'best' region for well-being
Sponsored Article
How to catch the first lobster of the year
Team SCA
Sponsored Article
All-female SCA team takes off on Volvo Ocean Race
Latest news from The Local in Austria

More news from Austria at thelocal.at

Latest news from The Local in Switzerland

More news from Switzerland at thelocal.ch

Latest news from The Local in Germany

More news from Germany at thelocal.de

Latest news from The Local in Denmark

More news from Denmark at thelocal.dk

Latest news from The Local in Spain

More news from Spain at thelocal.es

Latest news from The Local in France

More news from France at thelocal.fr

Latest news from The Local in Italy

More news from Italy at thelocal.it

Latest news from The Local in Norway

More news from Norway at thelocal.no

970
jobs available
Swedish Down Town Consulting & Productions
Swedish Down Town Consulting & Productions is an innovative business company which provides valuable assistance with the Swedish Authorities, Swedish language practice and general communications. Call 073-100 47 81 or visit:
www.swedishdowntown.com
PSD Media
PSD Media is marketing company that offers innovative solutions for online retailers. We provide modern solutions that help increase traffic and raise conversion. Visit our site at:
http://psdmedia.se
If you want to drink, that’s your business.
If you want to stop, we can help.

Learn more about English-language Alcoholics Anonymous in Sweden. No dues. No fees. Confidentiality assured.
AA-EUROPE.ORG/SWEDEN