How Swedish is Saab now?

September 8, 2009

Less by the hour if there is any truth to the story in Reuters that China’s SAIC is considering funding the iconic Swedish car brand’s buy-out from GM.

The deal, announced in August, was originally supposed to be a patriotic flag-waving exercise, in which a tiny Swedish supercar maker, Koenigsegg, would “repatriate” Saab from American control. The Opelisation of the Saab range would be stopped. A new generation of quirky cars designed by Nordic designers in square specs would be manufactured at the company’s historic (and splendidly named) Trollhattan factory. Saabs would again be as Swedish as a meatball or an Ikea “Billy” bookcase.

A moving vision? Certainly. But how practical given Koenigsegg’s small size? Well, about as practical as owning an insanely fast Koenigsegg car in Sweden, where the speed limit is 60kph. Incidently Koenigsegg sells less than two dozen cars a year (although they are quite pricey), while Saab sells closer to 100,000.

Anyway, that as I say was the vision. What appears to be emerging seems more like a foreign-funded buy-out of Saab from GM. Assuming SAIC makes it, the Chinese group’s 3 billion kronor investment ($410 million) should help to unlock Swedish government support in the form of guarantees of some 400 million in European Investment Bank loans. That in turn will allow the company to fund a business plan that involves continuing to source components from GM.

And it will be interesting to see  what SAIC gets in return for any cash it puts up. The company has a fairly chequered history of investing overseas. It made a total pigs ear of its investment in Ssangyong of Korea – although its punt on MG Rover has turned out a bit better.

2 comments

We welcome comments that advance the story through relevant opinion, anecdotes, links and data. If you see a comment that you believe is irrelevant or inappropriate, you can flag it to our editors by using the report abuse links. Views expressed in the comments do not represent those of Reuters. For more information on our comment policy, see http://blogs.reuters.com/fulldisclosure/2010/09/27/toward-a-more-thoughtful-conversation-on-stories/

Well I guess the GM haters will now be replaced by the China haters on all Saab lists.

As a big fan of SAAB, I am very much worried about having chinese support. They don’t invest. Period. Ultimately they will just take out technologies and after taking only inside of the fruits, they will simply throw skins away. abandon the company. That is exactly what happened to SsangYong. SsangYong was a decent carmaker with high technology especially for SUV and trucks, but SAIC didn’t make any necessay investment (they did minimal), and took the technologies with skilled engineers with saying they would do invest, but it never happened, and the company is bankrupt. A worse track to take for Koenigsegg

Posted by nochinese | Report as abusive