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It might start to be a real sob story over at Saab, if the Swedish automaker can’t find a partner to help finance operations and help get production restarted. News of a most recent deal with Chinese automaker Great Wall might be little more than a rumor, with the Associated Press now reporting a Great Wall representative is denying any talks between the two automakers.
Last week Saab announced a deal with Hawtai Motor Group, another Chinese automaker, with a $222 million investment. Several days later Saab said it was “forced to terminate” the contract because certain Hawtai investors were unwilling to commit. The two automakers are continuing to hold talks, although not exclusively.
Saab and Spyker CEO Victor Muller is currently in China wooing potential investors, a list that has now grown to include China Youngman Automobile Group, Co., which currently imports Lotus vehicles into China.
With severe clashflow problems, Saab was forced to halt production on April 6th and has been eagerly pursuing financial suitors since then in an effort to get the assembly line back up and running.
With the apparent collapse of the deal between Hawtai and Spyker, the Dutch parent company of Saab is now courting Chinese automaker Great Wall in an apparent bid to find a partner for the ailing Saab brand.
Hawtai was apparently unable to get the necessary approval to complete a transaction with Saab worth 150 million euros, in which Hawtai would get a stake in the Swedish luxury car maker. Saab would have used the cash to pay off suppliers and resume production at its Swedish plants.
Spyker released a short statement today, claiming ”Spyker and Saab Automobile continue to work on securing short and medium term funding. To that end Spyker and Saab Automobile are negotiating equity and debt financing and/or technology licensing with various (strategic) Chinese partners.”
A source close to the deal told Retuers that Saab and Great Wall had been in communication throughout the Hawtai deal, stating “the two sides have never stopped talking…”
[Source: Automotive News]
While nothing is certain at this stage, what’s clear is that Jaguar and Land Rover are two internationally-recognized brands that do not have any manufacturing presence in China, one of the world’s largest markets and a major source of sales for the two brands. Meanwhile, competitors Audi, Mercedes-Benz, and BMW have all found partners in China, leaving parent company Tata Motors alone at the prom.
“The two companies are exploring opportunities for a cooperative effort. Senior executives of Jaguar and Land Rover came over and visited our plant earlier this month,” said the executives. “It’s fair to say that contacts between the two parties have already passed the initial stage, but no final decision has been reached so far.”
After Jaguar and Land Rover lost money during their messy sale to Tata, the Chinese market helped turn them around to the tune of approx. $434 million in profits in the last quarters of 2008. The market was the fastest-growing for the company in 2010, with a staggering increase of 95 percent. With these results, it’s only logical that Jaguar and Land Rover will seek to solidify their growth in the Chinese luxury segment while Great Wall builds mass-produced sedans and trucks.
[Sources: Automotive News, Reuters]