Saab and Volvo – made in China?

September 9, 2009

SWEDEN/At this rate it might not be long before Sweden’s once mighty Volvo and Saab car marques come with “Made in China” stamped on the chassis.

After failing in the auction of Opel, Beijing Automotive Industry Holding (BAIC) is set to take a minority stake in supercar maker Koenigsegg, which is bidding to take over all of GM’s Saab. Meanwhile, Geely Automotive’s parent company Geely Holding Group Co plans to bid for Ford’s Volvo.

Chinese carmakers have had mixed fortunes in their attempts to buy overseas brands. SAIC Motor Corp snapped up 51 percent of Korea’s Ssangyong Motor Co in 2004 but made a hash of running an overseas operation and was later forced to write down the investment.

SAIC had more success with the acquisition of the historic British MG Rover. In the case of Rover,  SAIC simply boxed up the machinery, stripped the plants and took all the technology back to China where it produces the cars of the same design far more cheaply. But in MG’s case, the sportscar continues to roll off the assembly line at the UK’s Longbridge plant.

Technological asset stripping rather than a commitment to build cars in Sweden is what some there fear will be in store for Volvo and Saab should the Chinese firms succeed with their bids. But analysts point out that in the case of Saab, the technology is owned by GM

Stockholm is doing all it can to avoid giving either of its iconic carmakers state financing. If it ends up giving any loan guarantees, it will also want to look very closely at the fine print to make sure it does not sign away its carmaking heritage and the jobs which go with it.


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