Saab may be sold to SAIC at a low price

It is not the ending of their deep cooperation that GM has transferred 1% stake of its JV Shanghai GM to SAIC and the two sides will establish a JV company in Hong Kong to jointly explore the Indian market, not GM, SAIC- in the end. A source close to SAIC has revealed that although the brand Saab under GM are still struggling to find buyers, GM and SAIC have already reached a tacit agreement that after the bankruptcy liquidation of Saab at the end of this month, Saab will be transferred to SAIC at a low cost, including its core assets such as brand and platform.

At the same time, another domestic company Beijing Automotive Group also slows down its step in order to buy Saab’s production line of model 9-5 whose production has already been discontinued at a lower price and an engine technology have not been disclosed previously.

By then, the history of SAIC and Nanjing Automobile Group dividing the British company Rover will be restaged again by SAIC and Beijing Automotive Group. The only difference is this time the two sides are waiting for the bankruptcy of Saab.

The general director of public relations has made it clear in a telephone interview that currently SAIC has got no plan to purchase the Saab’s assets.

However, the source said, “SAIC did not wait to tender offer Saab’s assets, but to transfer it at a very low cost. Perhaps this is related to their successive with their cooperation on other projects.”

Insiders have speculated taking Saab as a counter, GM may require to expand its shares of SAIC-GM-Wuling and to develop the Asia Pacific market together with SAIC.

It is most likely that after the bankruptcy liquidation of Saab, SAIC and Beijing Automotive Group will respectively get Saab’s relevant assets in order to seek for more space for their self-owned brands. After all, as a type of high-class brand, the brand, platform, technology and engines are beneficial to the self-owned brands of both sides.” the above-mentioned source analyzed.

To Beijing Automotive Group, its determination has been strengthened after a series of unsuccessful overseas acquisitions, especially on Saab. Previously, in order to acquire Saab, Beijing Automotive Group was even intervened in Koenigsegg to Saab. Although Koenigsegg has already given up, abandoned, Beijing Automotive Group is still moving on. According to the reports from foreign news agencies, consultations have been held between Saab and Beijing Automotive Group in Saab’s headquarter, located in Trollhattan. The two sides have discussed issues about transporting the production facilities of some Saab’s old car models.

Like the analysis of Christer Karlsson, professor of Copenhagen Business School, GM is unlikely to sell Saab’s core assets to Beijing Automotive Group, “selling the brand of Saab to Beijing Automotive Group is virtually nothing but putting GM’s own products into competion with Beijing Automotive Group for the new models of Buick and Saab are somewhat similar.

Therefore, Beijing Automotive Group is only willing to buy Saab’s production line and technologies of related models. It has no interest in its brand and other assets.” Wang Dazong, general manager of Beijing Automotive Group has revealed like this, “I just want to say we need time for observation.”

A source close to Beijing Automotive Group has disclosed that besides the old production line, Beijing Automotive Group also intend to purchase the production line and technology of a special type of engine, which is unknown to the outside world.

The situation of SAIC is more particular that its cooperation with GM is not simply on JV. This can be corroborated by the transfer of shares and jointly developing the Indian market recently. One source who once worked in SAIC has revealed that GM held a communication with SAIC the moment it decided to sell Saab. With the experience of purchasing Rover at a premium, SAIC seemed have no interest in it.

However, it does not mean SAIC have no consideration on its self-owned brand. SAIC has always expected to produce independent high-class brands. After the acquisition of Rover, the large amount of money to b the sales price of Roewe, the new built brand at an expensive cost is almost the highest among its self-owned models. Besides, Roewe is also initially located as high-class model in the market by the experienced team. SAIC also spent great efforts to promote the brands of MG after purchasing the Southern Motor Company. On the just-concluded Guangzhou auto show, the courage can be seen through the action of laying only one model of MG6 on such a huge display booth.

If the bankruptcy liquidation of Saab can be done, there will be no more brothers from debts and labors and the situation will be very different. Considering the demands GM have upon SAIC, it is possibly that GM will transfer Saab to SAIC at a low price.” Insiders said so.

The above-mentioned source disclosed that the “the tacit agreement GM has reached to with SAIC is to transfer the brand and the platform of Saab at a very low cost red to SAIC. Then, Saab will become another high-class brand of SAIC, forming a concerted effort together with Roewe. Moreover, originally, the marketing network of Saab in China is relied on SAIC.”

According to Economic Observer, the latest news is that GM has issued an official statement that the board will assess the potential bid of purchasing Saab from now till the end of December. Statement has pointed out that the decision whether to sell Saab will be made before the end of December. If Saab will not be sold, its business size will be reduced instead.

As the bankruptcy due of Saab is the end of this year, a number of insiders expressed in the interview that “it is almost impossible for Saab to find a new buyer in two weeks time”.(Translator: Yalong/ Jessie)

　　See original Chinese report Please click