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BAIC confirms purchase of Saab assets

AFP/The Local · 14 Dec 2009, 11:58

Published: 14 Dec 2009 10:28 GMT+01:00
Updated: 14 Dec 2009 11:58 GMT+01:00

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The deal comes after BAIC, China's fifth largest automaker, and Swedish high-performance carmaker Koenigsegg gave up their joint bid for Saab last month, citing costly delays in the transaction.

BAIC will acquire the technology for Saab's 9-3 and 9-5 car models, turbine engines and gearboxes, it said in a statement.

Saab will also help BAIC develop its own-brand cars using the Swedish carmaker's technology, it said.

The Chinese company said the deal was an "important milestone for BAIC and Saab's strategic cooperation and paved a good foundation for the two sides to further explore and expand win-win cooperation".

Financial details of the deal were not released.

Jan Åke Jonsson, managing director of Saab, said in a separate statement that the deal was "excellent for both parties, now and for the future."

"We have developed a good relationship with BAIC and look forward to working with them to integrate this Saab technology into their future vehicles," Jonsson said.

Hou Yankun, a Hong Kong-based analyst at Nomura International, told AFP: "I think it's a clever move -- Chinese companies have had a hard time operating the brands they acquired.

"What the Chinese auto sector is in need of is technology. When you have the technology you can launch improved models, which is the key, and build your own brand step by step."

The BAIC-Koenigsegg bid for Saab fell through as Koenigsegg 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 upon.

Despite the setback, analysts had not ruled out BAIC pursuing the bid on its own given its financial strength and desire to access foreign technology.

In the first six months of this year, BAIC reported a net profit of 370 million dollars, up 78 percent from the same period last year, previous state media reports said.

BAIC, founded in 1958, already has joint ventures with Daimler and South Korea's Hyundai.

Story continues below…

An attempt to buy Opel, another European unit of the troubled US auto giant GM, collapsed in July after BAIC failed to reach an agreement with the US company due to intellectual property rights concerns.

Despite the deal with BAIC, the future of the Saab nameplate remains uncertain.

Dutch sports car maker Spyker said early this month that it was in talks with GM on the possibility of buying Saab from the US company.

GM said previously it has received interest from buyers and would decide the fate of its Swedish unit, which employs 3,400 people, by the end of December. It has warned it may end the Saab brand if it fails to find a suitable buyer.

AFP/The Local (news@thelocal.se)

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Your comments about this article

11:11 December 14, 2009 by Twiceshy
This is a bit different from the earlier information. Looks like BAIC won't be producing the exact cars Saab had, just using their technology on their own cars.
11:45 December 14, 2009 by aaww
smart move for BAIC

they for sure won't need more employees, and they are not interested in the name plate as well.
12:39 December 14, 2009 by karex
They're also not interested in the production facilities it seems...

For those who have commented on the Saab and Volvo sales earlier citing that China did not need the technology, well, there you go...
12:53 December 14, 2009 by bjinger
To #3

There is no reseans for China to pay Saab for nothing.It's a win-win solution. Obviorsly, it's Saab needs China more than China needs Saab.
13:09 December 14, 2009 by Glempa
I can not see any positive news here!

There is no mention of what will happen to the SAAB name and where the cars will be produced. The only news is that some SAAB technology is going to be used on Chinese cars!

This is the end for SAAB.
13:09 December 14, 2009 by karex
All I'm saying is that a Tiger does not change its stripes...

And technically, Saab does not need China, specifically, Saab needs a buyer. On the other hand, China seems to need Saab, or equivalent level of technology.
13:43 December 14, 2009 by hfvikingarna
Saab needs cash for surviving and Baic needs technology for its products. Then it becomes a deal. So simple it is. Remember, this is globalized world economy.
00:33 December 15, 2009 by Days-of-yore
Saab is doomed, this all sounds very familiar. Think back five years ago when MG-Rover sold all its technology to SAIC (another Chinese Car Manufacturer) with a possible sale of the remainder of the firm later on. They never bought MG-Rover, they took what was of value and left the rest to the creditors. Once Saab relinquishes sole rights to its technology, there is nothing left of intrinsic value (just a loss making car manufacturer). RIP Saab!
04:10 December 15, 2009 by falcon
Saab had a few experts bidding in the process. All were turned away in favor of money losing supercar makers. Saab is indeed doomed in these hands and GM knows it. Where is the government? Why are they so passive.

Bring back the experts.
09:13 December 15, 2009 by Flying Scotsman
They are only buying the equipment to produce the parts for the cars, I have no idea how they are allowed to do this, as this is the main function of the business that generates the highest amount of profit.
22:07 December 16, 2009 by spy
Their motives are obviously to make their own cars from old or outgoing Saab tooling. Also it seems that with the news that Spyker is the last bidder for Saab it proves that the Chinese were only allowed by GM to buy the OLD technology (old 9-3 and 9-5) as many people suspected - Well done Saab!!!
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