Beijing car maker keeps Saab options open
AFP/The Local · 25 Nov 2009, 11:37
Published: 25 Nov 2009 09:35 GMT+01:00
Updated: 25 Nov 2009 11:37 GMT+01:00
- Swedish press: Saab 'damaged beyond repair' (25 Nov 09)
- Chinese firms could swoop for Saab: analyst (25 Nov 09)
- Koenigsegg backs out of Saab deal (24 Nov 09)
Swedish luxury carmaker Koenigsegg said on Tuesday it was abandoning plans to join forces with BAIC to buy Saab from its US parent General Motors due to costly delays, plunging Saab's future into doubt.
"It has always been an important strategy of BAIC to go international," BAIC said in a statement quoted by Chinese web portal Sina.com.
"Given the pullout of Koenigsegg, we will reassess this project in a prudent manner and make proper arrangements," the statement said.
It gave no further indication of its plans, according to Sina.com.
BAIC referred AFP to the state press reports when contacted for a direct comment.
Analysts said BAIC might still proceed with the bid given the financial strength of Chinese auto makers and their desire to access foreign technology.
"There are chances that BAIC may continue the bidding using its own financial resources as long as it remains optimistic about the outlook of the Chinese auto market," Xia Ping, an analyst with Core Pacific - Yamaichi, told AFP.
"An acquisition is still possible judging from BAIC's own financial strength. It may also win some policy support on financing," she added.
In the first six months of the year, BAIC reported a net profit of $370 million, up 78 percent from the same period last year, previous state media reports said.
By contrast, under GM's stewardship, Saab rarely posted a profit and last year lost 3 billion kronor ($341 million).
But Xia said BAIC may need a foreign partner to clinch the Saab deal due to certain "policy restrictions abroad".
Koenigsegg had needed a $600 million loan from the European Investment Bank and wanted the Swedish government to act as a guarantor, but the request was not acted on.
Koenigsegg announced its plan to acquire Saab in June, and the deal was originally expected to be concluded by the end of October but was repeatedly delayed.
BAIC, founded in 1958, is China's fifth-largest automaker and already has joint ventures with Daimler and South Korea's Hyundai.
It had also attempted to buy Opel, another European unit of GM, but announced in July that it failed to reach an agreement with the US company due to intellectual property rights concerns.