Without further comment
It would be a significant understatement to say that the last weeks have been challenging for Saab Automobile.
We are a car company. Designing and building distinctive cars according to a well honed, Swedish philosophy is what we do. And yet our production line – the beating heart of our company – has been idle for the last five weeks.
Though no-one’s fault but our own, we found ourselves in a cashflow crisis and unable to buy the parts we need to build our cars. This has hurt our dealers, our suppliers, our employees and many of our customers, a situation for which we are truly sorry. We want nothing more than to secure our financial position so that we can get to building cars again.
On May 3, we announced a deal with Hawtai Motor Group, a vehicle manufacturer from China. This deal would have included an ownership stake for Hawtai and significantly, an opportunity to develop Saab manufacturing in China, the new automotive frontier. This deal collapsed late last week due to an inability to secure the required regulatory approvals for it to proceed. This was a significant blow for us, however we persisted with partnership talks in China, which we see as an essential step in securing Saab’s future.
On May 16, we announced the signing of a memorandum of understanding with Pang Da Automobile Trade Co. Pang Da is the largest publicly traded sales and service distributor in the Chinese market, with over 1,100 outlets in China and Mongolia. The MoU includes strategic deals for distribution, branding and potential future joint ventures in manufacturing.
Perhaps even more importantly for our immediate future, Pang Da have placed an order for approximately 1,300 vehicles, with immediate payment to be made for these vehicles. A further order can be placed in the near term, subject to certain conditions.
This cash injection is important for Saab, not only as a vote of confidence in our brand portfolio, but also as a much-needed cash injection that will enable us to get our plant operational again.
With this and other cash injections in place, Saab Automobile will be well placed to initiate negotiations with our 1,200+ suppliers. These negotiations are intended to provide full payment for outstanding amounts at regular intervals and within a specified time period – and they are crucial to getting the supply chain moving, and our plant and our business operational once again.
Saab already has an order bank of nearly 5,000 vehicles for the Trollhättan factory. These are cars that are ordered and awaiting delivery to dealers and customers. These are cars that will see our cash position improve as soon as they leave the factory. We will also have the initial order from Pang Da to build, as well as the potential secondary order. These orders would take our order bank to well over 6,000 vehicles for our Swedish plant.
In addition, we are also pleased to report that orders of the new Saab 9-4x crossover vehicle are very strong, coming on the back of very favourable reviews from our recent Saab 9-4x press event in Washington DC. The Saab 9-4x is intended primarily for the North American market and US magazine, Winding Road, said “the driving dynamics of the 9-4x are positively brilliant”. The Saab 9-4x has also attracted praise from markets outside of North America. Robert Collin from Sweden’s Aftonbladet called it “the best Saab ever built”, noting the crucial role Saab played as the architects of the vehicle. The Saab 9-4x is indicative of the future for Saab Automobile. Dynamic. Exciting. Engaging.
In addition to the Saab 9-4x, the new Saab 9-3 Griffin range is the most fuel-efficient 9-3 range we’ve ever offered, featuring a diesel range specially developed to offer road tax advantages for a number of significant European markets. Our new 9-3 petrol engines offer the best combination of fuel efficiency and power in their class. We also have our new flagship Saab 9-5 Sedan and the all-new Saab 9-5 SportCombi coming later in 2011, which is going to deliver a new level of practicality to Saab 9-5 customers around the world.
Our vehicle range is constantly expanding and improving. More than that, we have new vehicles and groundbreaking innovations coming very soon, things that we believe will excite our customers everywhere. We are working on partnerships that will take us to new places, with new technologies to make driving safer, more enjoyable, more economical and more ecologically responsible.
The Saab Spirit that built this company remains strong and we cannot help but be excited by the future.
We thank you for your patience and we ask for your continued support.
Kjell ac Bergström – Vice President Product Development Powertrain
Gunnar Brunius – Vice President Purchasing & Manufacturing
Mats Fägerhag – Vice President Vehicle Product Development
Matthias Seidl – Vice President Global Sales & Aftersales
Anders Svensson – Vice President Vehicle Lines
Knut Simonsson – Vice President Brand & Marketing