Pang Da-Saab partnership faces uncertainty *UPDATE
May 20, 2011 in News
UPDATE: We’re getting many emails from Saab insiders that there’s not much as much uncertainty as Shanghai Daily would have us believe. As most of this and other articles posted in the last 24 hours cite “Industry experts” and not actual first person sources that are part of the deal, much of this article is based on speculation.
Pang Da has background in Joint-Manufacturing deals, as noted with Beijing Automotive, to produce Subarus. For the expert Jia to claim that Pang Da isn’t experienced in this sort of deal or can’t get it done is strange, seeing that they have navigated the Chinese regulatory environment of the NRDC before. Part of Subaru’s plans to expand into China included forming a Joint Venture between themselves (Fuji Heavy, a Japanese company) with a 50 percent stake in the JV, while Beijing Auto and Pang Da (sometimes translated as Power Diversity) hold 25 percent each. While this deal hasn’t yet been finalized, Pang Da’s CEO has outright said the Saab deal is more important to them, because they will be Saab’s exclusive dealer (whereas they wouldn’t be with Subaru, even with an MJV). In essence, Saab just became a preferred partner to Pangda than Subaru. From an interview with the CEO of Pang Da, Pang Qing Hua in ChinaCarTimes:
Sohu: So we could say that this round of investment copies the Subaru method?
PQH: (background: Subaru and Pangda were in talks to produce Subaru’s in China, but with the added twist of Pangda offering to buy into them)
The Saab method is likely to be more stable than the Subaru method. Subaru-Pangda is just a simple car dealer, but one day Subaru’s will be made in China. The problem with working with Saab and Spyker is that is that we hope we can be the main sales company, we want to protect our sales rights.
So let’s all wait before “expert” speculation starts to stick when it shouldn’t. We don’t need to fan flames.
________________________________
shanghaidaily.com (original article here) The surprising tie-up between China’s auto distributor Pang Da Automobile Trade and cash-strapped Saab may still face uncertainty due to the difficulties in gaining government approval, according to industrial analysts.
Netherlands-based Spyker Cars, the parent of the Saab unit, said on Monday that Pang Da will inject 65 million euros (US$92 million) for a 24 percent stake of Spyker and the two companies will form a 50-50 joint venture in China for distributing Saab cars.
The plan also includes a car-manufacturing joint venture, which will be 50 percent-owned by Saab while leaving the rest to be held by Pang Da and another Chinese car maker yet to be decided.
Spyker said the deal is also subject to approval from the Chinese government, the European Investment Bank, previous Saab owner General Motors and the Swedish National Debt Office.
Independent auto analyst Jia Xinguang said it is not likely Pang Da will get the nod from the government.
“As an auto-sales group, Pang Da lacks the car-manufacturing ability,” said Jia.
“Having two Chinese companies share the 50 percent stake in one Sino-foreign joint venture is also not allowed.”
According to China’s regulations on new joint ventures, it allows one Chinese company to hold a 50 percent stake with one or several foreign counterparts sharing the remainder.
Jia also said that the acquisition carries a lot of risks for Pang Da as no government will provide a warrant for the deal.
Spyker has been seeking cash to save its Saab unit from collapse, which was forced to stop production at a plant in Sweden in April. The announcement came three days after Spyker’s cooperation with China’s Hawtai collapsed due to the Chinese company failing to get necessary approval from authorities in time.
Hebei Province-based Pang Da said the cooperation will help raise brand image and lay foundations for distributing premier models in China.
Market observers also questioned Pang Da’s financial strength for Saab’s future expansion.
Zhang Xin, an analyst from Guotai Junan Securities Co said, “Any cooperation is not as easy as expected. Besides the government approval, Pang Da will also need huge investment on labor costs and future operation for Saab.”
Pang Da raised 6 billion yuan (US$923 million) in an initial public offering in April, making it the first auto-sales group to float shares on the mainland stock market.
According to Jia, Pang Da reported a sales revenue of 53.8 billion yuan last year with a profit of 1.24 billion yuan. The company mainly distribute Japan’s Subaru models in China in addition to lower-end vehicles.
Shanghai-listed Pang Da hiked a combined 3.56 percent on Tuesday and Wednesday, compared with an overall 0.83 percent rise in the benchmark Shanghai Composite Index.
74StingSaab said on May 20, 2011
TimR said on May 20, 2011
Regardless of how bad the news gets! I will never stop Griffin UP!!! =)
74StingSaab said on May 20, 2011
OK… Pep talk is always good…drama time over… time to Griffin UP and head to Carlisle to meet other Saabers,..
Anders said on May 20, 2011
“All great changes are preceded by chaos.” – Deepak Chopra
Jason Petho said on May 20, 2011
+1
Frank Wulfers said on May 20, 2011
No more uncertainty! Sometimes I just want to turn off all media and come back after a year.
74StingSaab said on May 20, 2011
amen to that!
Kikaluka said on May 20, 2011
Buy a Saab. It will make you feel better, day in day out…
74StingSaab said on May 20, 2011
I just bought our second one on Monday,
zippy said on May 20, 2011
Well done 74StingSaab!
I have just about finished paying off the car loan on my current car.
JasonPowell said on May 20, 2011
zippy, when’s your next one? lol
Christian said on May 20, 2011
+1. Guys, please, watch for your style of writing headlines like these here at SU. IMHO, there has been far too much alerting and spreading uncertainty over rumors and negative media. It’s OK to post both positive and negative press about SAAB, but please make sure you don’t add drama where there should only be plain facts.
Cerulean said on May 20, 2011
+1
Belfast_Saab said on May 20, 2011
+1 These are unconfirmed headlines perpetuating bad news. Let’s leave it to others to do the work of the negaitve voices shall we?
Please SU, don’t feel obliged to link every item of news – sometimes less is more
baas900i said on May 20, 2011
agreed while the su crew work is to be admired there appears to be a new commercial orientated approach and i uneasy with this….
TimR said on May 21, 2011
The problem is that this website is far from free to run or buy
We’re not doing this for money, neither did Swade, but both him and we need to pay the bills… its as simple as that…
Jeff said on May 21, 2011
I can assure you Tim isn’t doing this for money. None of the writers are paid, and we’re all doing this for our love of Saab. Tim is buying a new server with his own money, we’re all spending time that we should be focusing on our own careers/families to make sure everything goes well for Saab and we can enjoy our brand’s future again. If he can find one or two more advertisers to take some pressure off, I hope he takes advantage of it. Just like I hope Victor/Vladimir can find a few more investors.
Profit and SaabsUnited shouldn’t ever go in the same sentence– I can tell you first hand they don’t.
TimR said on May 21, 2011
If you only knew how much we discard!! =) There are tons of stuff we just ignore! =)
Jos said on May 21, 2011
If anything, please then just please moderate the headline of an entry like this, so that a news or rumour that is effectively not sensational doens’t get a header like this. Putting “Pang Da-Saab partnership faces uncertainty ” (and linking to that on twitter) is not wise. Not only to our own visitors, who don’t always have the time to immediately read the full article, and will have a bad couple of hours before they can, but more importantly, we’ve come to see that even mainstream media, like Swedish TV, Reuters and many papers follow SU, and many a journalist will also only read the headline, and maybe the three lines of the article, and the next poisonous, sensationalist and negative article about SAAB is already forming in his head. Regardless if the rumour is defused in the article underneath. The damage is already done, and sadly in this case, the source SU.
So whenever a romour like this arises, and you need to publish about it, count to ten, and see if you can put a headline on it that will not spark a bushfire on it’s own.
Quijote said on May 20, 2011
+1
mike saunders said on May 20, 2011
To his credit, TimR took the original headline straight from the source of the story, a headline that fairly accurately sums up the point of the text, that due to various factors, the deal faces uncertainty.
Nothing inflammatory or sensational about that…it just happens to be the truth.
Audun said on May 20, 2011
+1
Cokeisit said on May 20, 2011
+1
Dennis UK said on May 20, 2011
Am I right in thinking that the Pang Da advance payment for cars will help Saab’s cash flow very short term but do nothing to change the situation medium term if the following Euro 65m part ownership investment is disallowed?
If the advance car purchase money from Pang Da is soaked up paying Saab’s existing debts and Saab gets no further revenue / cash flow from actually supplying these pre paid cars in future (Pang Da will not pay twice for each car) then nothing changes longer term without investment from other sources?
Sweden should learn from the demise of MG Rover in the UK. Unlike the “Pheonix 4″ VM is putting his heart, blood. sweat and tears in saving Saab. Now he has to find another source and really needs the Swedish Governments help. They should not let Manufacturing fail without doing everything possible to retain it. It’s a big mistake to give up on manufacturing for any developed economy.
saabsessing said on May 20, 2011
+1, Dennis UK.
Wealth is added to an economy by converting raw material into finished product (i.e., manufacturing), and through the livable wages that manufacturing jobs provide, not through cashier jobs at Walmart. No offense to any here who works in the retail, service, or financial sectors, but I think my point is clear. A government that allows a key player in its manufacturing sector to wither and die is in insane and is doing irreparable harm to the society it exists to serve.
Here in America, partisan politics and various political agendas were largely put aside (temporarily, at least) to make sure our automakers survived. It looks like GM and Chrysler are back on their feet thanks to that. We taxpayers actively funded loan packages and took part ownership of our affected automakers, in a nation where “Socialism” and “nationalize” are dirty words. WHY is there not a parallel to this story in Sweden?!?
theSandySaab said on May 20, 2011
+2!
rallyho said on May 20, 2011
Nice, but also very flawed because life and economics are not reduced to a single sentence.
That was also the problem with Reaganomics too. The corporate raiders stripped many company’s in the name of capitalism. But it was a false capitalism that was short sighted. A true capitalist would not borrow from a bank and run with the high salary that drove so many American firms to ruin during this tragic period. Because it was done and some made money does not make it sound economic policy does it? People called him cowboy and short sighted and perhaps they were right but following is not a good idea is it? We are now a bunch of second rate saber rattlers.
What if too much of the profits are diverted from the other country as is the case with Walmart? Not just the manufacturing jobs that are lost from even the most simple of products it is the profit that no longer exists within that economic sphere. The US economy is not in good shape and if no one here can afford a Saab what good is it?
Don’t try to reduce economics to a simple sound-bite.
saabsessing said on May 20, 2011
Sometimes we need to attempt to understand impossibly complex situtations in simpler terms, especially since the vast majority of us are not economists, political scientists, financial analysts, or investigative journalists. You can call it a “sound bite” – I’ll call it an attempt to understand what the hell is going on, lest you think I am somehow a fan of the recession and the bailouts.
The US economy is in rough shape, but people here apparently can afford Chryslers, Dodges, Fords, Lincolns, Ram Trucks, Buicks, Chevrolets, Jeeps, GMC trucks, and Cadillacs, all of which still exist, corporate raiding or not, thanks largely to the bailout…
rallyho said on May 20, 2011
Excellent point but I think they are leasing and borrowing on short credit that will soon extinguish itself. I do not see a “Silicon Valley” to bail us out.
The bail out was a bandage on a greater problem though?
saabsessing said on May 20, 2011
Agreed – just an expedient fix for a much deeper systemic problem that hasn’t been addressed and may never be.
eduardo_spain said on May 20, 2011
Again new uncertainties. In my opinion if this continues maybe the best solution is to sell the company to a Chinese manufacturer, similarly as Volvo did. The brand may loose a little bit of it´s charm but in the end I prefer it to survive in an eastern style, while part of the cars are still being designed and built in Sweden, in stead of dying a scandinavian and definitive dead.
theSandySaab said on May 20, 2011
I think I will get new spark plugs in my 2.8T 9-3 Aero 2006… Maybe that will help this rough idling…
Be positive – even in worst case Saab can re-start manufacturing and then we send out VM yet again defending our iqonic brand! To me it seems that the dampening statement from the chinese government came after the chinese car companies were all TOO enthusiastic and willing to cash up for Saab. At least they seem to know the intrinsic and actual values in Saab. The swedish government does not… So, lets get Lars Carlström talking to the Swedish government, with his inside knowledge and facts. Then let the swedish and chinese governments talk and clear the air. Then we can found a new major player with firm foundations in Sweden & Europe, China and Russia… Anything to stay viable and prosperous!
Saab Up!
Börjesson said on May 20, 2011
Correct me if I’m wrong, but isn’t this article just about some unknown (to me) analyst speculating freely? It’s the Chinese equivalent of DI.se asking Dudenhoffer to yet again comment on Saab.
terry9000k said on May 20, 2011
FAO: The Swedish Goverment….
A sad picture of what DETROIT is today…Act now on SAAB, otherwise it could be Sweden:
http://www.time.com/time/photogallery/0,29307,1864272_1810101,00.html
Hans H said on May 20, 2011
Detroit looks almost like Pripyat !!!
How could anybody let it go that far?
The city seems to wait for OCP to clean it up.
SAAB_Andee said on May 20, 2011
If you take the Press Release from Monday you will see that this reports were no real news and nothing new.
These are all facts we know already. The chinese Government has to approve a joint venture as the EIB and the NDO. The approval for the Joint Venture hasn´t started yet because PangDa and SAAB have no manufacturer in china. These talks should be ongoing with Baic ,Hawtai etc…
So the Chinese Government hasn´t got any information what they would do or they have to approve. When there is no deal to approve ( because it´s a MOD) they couldn´t say anything.
And if Pangda has stakes in Spyker – there could be a 50/50 joint venture with any manufacturer in china ,where they get there cars from. It´s the same the CEO of Pangda and Victor Mueller said.
Please stop hysterical writing – start thinking!!! Nothing changed since monday – only saab gets 30 mio eur from china
Keep calm and carry on
Lars S said on May 20, 2011
+1
f*****g spot on! ( I hope).
Frank Wulfers said on May 20, 2011
Just another comment.. You should have mentioned this is an exact copy of the article from their website. It appears this is written by SaabsUnited as the text wasn’t marked as quoted and there was no introduction to the article from SU.
Probably just an oversight being busy and getting stories out.
terry9000k said on May 20, 2011
FAO: The Swedish Goverment….PART 2
Sad pictures of MG/ROVER…Act now on SAAB, otherwise it could be Sweden:
http://www.28dayslater.co.uk/forums/showthread.php?t=9749
Börjesson said on May 20, 2011
Good lord, those are sad pictures. My brother has an MG ZS that was probably made in that plant. I think I’ll refrain from sending him that link…
Börjesson said on May 20, 2011
My two öre on the discussion on what SU should and should not publish:
Well, first of all, SU should definitely publish bad news as well as good news. This is an info site aimed at Saabers, not a PR channel from within Saab. Sometimes, there’s little difference between the two, but at other times, that makes all the difference in the world. That SU managed to have such an impact during the (real) crisis last year was in large part due to the fact that everybody knew that Swade would tell it like it is, even when neither he nor the readers particularly liked the news in question. If it was written on SU, then it could be trusted. That kind of reputation is hard to build and easy to destroy.
Secondly, as I’ve already griped about a bit before, everything published on SU should live up to a certain quality standard. I think the minumum demands for republishing a news story from elsewhere should be that:
1: The SU staffer has read the article, and not just the headline,
2: The SU staffer has actually understood the article.
3: The SU staffer has carefully considered whether the article has any new facts or an interesting perspective, and is thus worth passing on to the readers.
At present, I get the impression that we’re somewhere between step 1 and 2, with 3 rarely even entering into it. It seems that just about everything written about Saab, and that someone has tipped the SU staff about, gets published. That is not a good way of running the site. It erodes trust very quickly.
We the readers (if I allow myself to speak for everybody for a sec) rely on the SU staff to be better informed than us, and to be in a better position to judge the merits of each news article. If an article gets published here, especially if it’s done without any editorial comment, then SU is implicitly telling us that this is a newsworthy and/or well-written story. Not just that it’s one of a gazillion daily stories on Saab, and that this one happened to randomly catch the eye of an SU staffer.
Jeff said on May 20, 2011
Thank you Börjesson. You’re the reason why I went back to square one at the beginning and began double sourcing, commenting, and interpreting news rather than regurgitating it. I’d almost rather report nothing than just dump headlines onto the main page without a filter. On your third point, it’s why I try so often to combine complimentary articles into a more coherent narrative when reporting news.
Hopefully we can all improve.
Börjesson said on May 20, 2011
Well, I didn’t like to point fingers, but in order to be fair to the rest of you, I should clarify that in my impression, it’s mainly Tim who does these “hit and run” article dumps. I guess with his job, he only has short gaps in his schedule, and often doesn’t have the time to write more worked-through stories. It’s perfectly understandable that he wants to contribute whatever he has time for, but like you say, it may be better to not write at all than to write in haste. Especially since there are so many other staffers who can fill out the gap.
As for you in particular, Jeff, in my opinion you write the best and most insightful articles on SU – and that’s saying something! You had me a little worried in the beginning, when you seemed inclined to use your talents more for propaganda than for reporting, but I’m not the least bit worried anymore. Keep ut the good work!
Audun said on May 20, 2011
Well spoken.
Audun said on May 20, 2011
Thank you for the mail I got.
I´ll stop bringing links in comments, but instead send it to you in mails. I agree with Börjesson. (I think that the articles that I´ve brougt a link to in comments have been of thegood type.) I hope that I haven´t don any harm. (For information: I didn´t bring any link today about Pang Da.)
Cokeisit said on May 20, 2011
+1 agree
Ralph said on May 20, 2011
What would also be good, is the setting up of some kind of “database” of source reliability. For SU, there’s no need to limit itself to ‘DI.se’ as the only well known unreliable/biased one out there. Try to figure out how reliable this shanghaidaily is for example. That takes time, but I’m just saying: keep an open eye and record/share your -accumulating- impressions of particular news sources that write about Saab with all the other SU writers/editors. ‘Database’ sounds more than it has to be, but you get the idea….just something to keep as reference and to add stuff to over time.
Christian said on May 20, 2011
I fully agree, too. And to be very clear, I think that the entire SU crew does an incredibly good job in keeping SU up and alive. I truly appreciate all of you guys’ effort – it is an honor to be part of such a great community. And of course, there is always room for improvement. Let’s all together try to provide the best support for our beloved brand and to mirror SAAB’s customers in a way that shows how special the brand and its workforce is. To sum it up: Keep calm and carry on.
Jeff said on May 20, 2011
In all fairness to Tim, you’re absolutely right about his work schedule not allowing him to sometimes give adequate clarification. He has the best interests of Saab in mind of course.
We are working on new ways to make the site easier to navigate and separate out news articles that are posted up for discussion and actual commentary we have, so that they’re not equally weighted. Right now everything just dumps onto one page, and that sometimes gives news stories like this an inordinate amount of credibility, when perhaps Tim was just posting it for general discussion. In many ways, the comments section here worked as they should, with many people refuting the claims. But I agree for the time being that until that design update is up, we need to but disclaimers on pieces we don’t necessarily know 100% are true.
Thylmuc said on May 20, 2011
I say stop negotiating with obscure Chinese manufacturers. Now only a big bang can restore buyers’ trust, like Apple/Google investing one billion to showcase automotive use of their mobile OSs.
zippy said on May 20, 2011
I know I am TOTALLY gonna get flamed for this but isnt BMW going to star building FWD cars soon. Would it not be advantageous for them to buy/invest in Saab to gain a little expertise from the inventors of FWD cars? Im getting kind of bored with all this uncertainty. ;(
Just a thought!
Jeff said on May 20, 2011
Sadly their experts seem to have already figured out most of the FWD architecture on their own (and from what I’ve read, might have even leapfrogged Saab in many ways). They even have fully electric rear axles for the electric vehicles. Hopefully the eAAM project could be licensed to other automakers though. GM would be a coup.
Red J said on May 21, 2011
Jeff,
BMW haven’t leapfrogged anybody.
They have slept with the French (PSA) to get a FWD platform. OK everybody will say it is the best because the three letters will be on the car, but that’s all.
And yes they have electric rear axles, but they are not comparable with the eAAM project. And yes the technology can and has been licensed by third parties, but they will have to wait 6 months after Saab comes out with it to release a product based on that.
Quijote said on May 20, 2011
You don’t want to fan the flame, yet you post speculative news on the top front page of SU.
Jeff said on May 20, 2011
I updated the post to try to put out the fire
JasonPowell said on May 21, 2011
Jeff, when you update maybe you can put your update in a different color or something. I didn’t notice your update right away, maybe make it bold or something. Just a suggestion, thanks for all the updates though.
saabdog said on May 20, 2011
I don’t think Swade would have lead with such a speculative story…just sayin’
Börjesson said on May 21, 2011
And here we go again…
http://www.svd.se/ego/mainColumn_s185/http://www.svd.se/naringsliv/nya-saab-affaren-i-regeringsbekymmer_6184575.svd
Still, Victor’s reassurances actually sound fairly reassuring for a change. Or maybe I’m just in a hopeful mood today.
KarlR said on May 21, 2011
I think VM is just a joke!! I can bet many thousands that SAAB will never start the factory on friday or maybe ever. They will go bankrupcy and china(Youngman) will buy the brand and Volvo the fabric and no more SAAB cars in Trollhättan.
saabsessing said on May 21, 2011
KarlR – Is it your wisdom and experience that tells you that, or just your cynicism? If it is the latter, keep it to yourself. We don’t need it here – save it for the comment sections of Swedish newspapers. Speculative and mean-spirited opinions are easy to throw around, but difficult to support.
Regardless of how you feel about Mr. Muller, he is the one who is fighting the hardest to keep Saab alive.