My 2 cents on the inclusion of BAIC into the Koenigsegg Group

Finally, the Koenigsegg Group appear to have all the pieces in place.
The makeup of the group has changed significantly since their nomination as the preferred bidder for Saab, just a few months ago in Geneva.
Since then, they have conducted their due diligence testing, Mark Bishop has left the group, they have formulated a new business plan, signed a binding Share Purchase agreement and finally, attracted new investment to the group and convinced the Swedish Government of their financial stability.
Who said they’d never make it?
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When a Chinese company was first raised as a possible new owner for Saab (oh-so-long-ago now) it sent shivers down the collective spines of the Saab faithful. And rightly so, I think.
Call it fear of the unknown or whatever, the fact is that Saab’s heritage as a Swedish company is ingrained in its DNA and is an essential component to its future success. Design and production must remain Swedish – of that there is no doubt.
BAIC’s inclusion as a minority shareholder in the Koenigsegg Group, however, is a welcome addition. It really does seem like a win-win-win.
Koenigsegg Group gets the investor they need to take the transaction forward. BAIC get access to technical development and maybe even a new brand to promote in their home market in the future. Saab – they get to live another day – maintaining their Swedish roots and culture – a fact for which I’m sure we’re all pretty thankful.
I heard just a little about the respective Chinese bidders from some people on the ground in Sweden in the early stages of the Saab sale. I won’t repeat the impressions that were passed on, but I can tell you that I’d rather be in Saab’s shoes right now instead of Volvo’s. Both Chinese bidders made an impression but from what came through to me (which was very little actual info, just impressions) those impressions were diametrically opposed – and we got the good ones.
I don’t know the BAIC people at all but if they’re bulding Benzes for the country that buys more S-Classes than any other in the world (i.e. China) then they must be doing something right.
Nothing has been mentioned about it today, but I think we’d all better get used to the fact that all going well, there will be Saabs made in China in the medium term. I think those will be primarily for the Chinese domestic market but I would be too surprised if some other part of Asia were served from this region as well. Given the difficulty of making a profitable small car, your collective wish for a Saab 9-1 could also come true as long as it’s OK to have strings attached. I’m just thinking out loud here.
BAIC are not likely to be pulling any strings here. Saab now have one of the most efficient plants in Europe and some of the automotive sectors best engineering minds as well. BAIC are a player in what could be the world’s biggest automotive market, consistently, starting as early as the end of this year. They are going to be learning from Saab – that’s going to be one of the biggest payofffs in this investment.
The good news as far as I’m concerned is that Koenigsegg Group have been able to prove their many detractors wrong and that Saab will get a real chance to prosper and flourish.
There’s plenty of hard work left before that can happen, though.
Saab still have a business plan being tested by the EIB. They need to get EIB approval, Swedish government guarantees, and have the whole plan approved by the European Union.
They’re not out of the woods yet. But at least now they have a map, a compass, and a packed lunch for the journey.
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Related articles:
Press Release – Koenigsegg and BAIC sign memorandum of understanding
About Beijing Automotive Industry Holding Co

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