Sobering Chinese News Snippets

Both recommended reads and both show just how complicated getting past the NDRC is going to be for Saab in China. The first is an analysis from Reuters, and while it cites many skeptical sources, it ends by landing on the hope that BAIC might be the company given the NDRC’s official blessing.

The second comes from Caixin Online (and brought to us through CBS MarketWatch) which spells out a little more clearly and backs up SvD’s claims that Youngman might be the chosen one. I’m not going to comment much on them but to say that Saab clearly has a lot of work to do to get their Chinese joint operation with Pang Da up and running, and I’m confident that the executive teams of both Spyker and Pang Da know what they need to do to get there.

Dagens Nyheter Report About Press Conference

An excellent piece covering the press conference was published by dn.se. Read a translation after the break.

  • Pang Da is optimistic about future Saab sales and production in China.
  • The deal will take an additional 2-3 months to complete.
  • Youngman’s exclusivity deal expired in March with Spyker, leaving the door open to alternatives.

Read moreDagens Nyheter Report About Press Conference

Välkommen till Sverige, Pang Da *UPDATED

An article from ttela.se brings us details of Pang Da’s visit today and tomorrow. There are two groups from Pang Da, a team visiting Trolhattan today and another comprised of senior leadership meeting with government officials (including Maud Olosson and the NDO) in Stockholm. Normally I don’t like just posting news article translations but I’ll be the first to admit this sums up the activities of the last 48 hours well and explains what next 24-48 hours hold.

A special congratulations to Saab staff for putting in so much hard work to get production rolling again, we’re all amazed by your work ethic.

Photo: Roger Larch, ttela

Read moreVälkommen till Sverige, Pang Da *UPDATED

Press Release: Pang Da starts discussions with NDRC

Pang Da Enters Procedure Discussions With Chinese Authorities To Obtain Necessary Regulatory Approvals For Investment In Spyker And Saab Automobile

Trollhättan, Sweden – Spyker Cars N.V. (Spyker) and Saab Automobile AB (Saab Automobile) confirm that Pang Da Automobile (Pang Da) has entered procedure discussions with Chinese authorities, including the National Development and Reform Commission (NDRC), to obtain regulatory approvals for the investment in Spyker and Saab Automobile. Spyker Cars is to be renamed Swedish Automobile N.V. shortly. The general meeting of shareholders has decided so.

Victor Muller, CEO of Spyker and Saab Automobile, said: “Based on our discussions with Pang Da we are confident that Pang Da will get the regulatory approvals needed to formalize the deal. I am very much looking forward to creating a strong business with Pang Da, initially in the distribution and subsequently in the manufacturing of Saab vehicles in China. What needs to be pointed out is that Pang Da’s advance payment and sales of imported Saab cars are not subject to approval from the NDRC. The first advance payment of EUR 30 million was received last Tuesday.”

Mr. PANG Qinghua, CEO of Pang Da, said: “The initial procedure discussions we have had with the NDRC were done in good spirit and all parties have a good understanding of the process going forward. We remain convinced that we will be able to get all the necessary documentation and approvals to successfully complete the transactions and look forward to our visit at Saab Automobile’s headquarters in Trollhättan, Sweden, later this week.”

China: While Uncertainty Remains Over Future Deal, Saab Must Focus On the Present

  • Future hurdles to setting up the Manufacturing Joint Venture (MJV) between Saab, Pang Da, and a Chinese domestic manufacturing partner include getting past the NDRC. However, Pang Da has suggested that they will be asking the NDRC themselves who they would recommend as a partner– casting doubts over the reports that suggest the NDRC would get in the way.
  • No matter what happens with the future MJV, Saab’s focus continues to be securing short and medium term financing to ensure a smooth production in Trollhättan and continued development of the NG 9-3. The distribution agreement with Pang Da for Chinese importation of Saabs is a needed cash infusion, and sets the stage for future cooperation. In the meantime, Victor Muller recently suggested that his focus will return to Trollhättan and the EIB loan. “After the Pangda deal is implemented, my focus is going to be finding a new CEO and getting a commercial loan to take out the EIB,” Muller said. “We cannot be dependent on the government or the EIB for whatever we do with the company. We have been paralyzed, we cannot move left or right.”

No doubt the Chinese auto market is complex and difficult to navigate, certainly for a small automaker from Sweden. The deal between Swedish Automobile (formerly Spyker) and Pang Da has multiple arms, the first are solely based on distribution and sales. Pang Da as one of the largest dealership groups in China as we know already sells a number of brands. Several news reports filed over the weekend with more expected to come this week suggest that Saab’s future partnership to produce cars for the local Chinese market will meet resistance with China’s regulatory agencies. Two articles emerged in particular, one from Bloomberg and the other from Automotive News that cast doubt over the future of the MJV Saab and Pang Da intend to form. But should we even be worried about deals that were crafted to take place a year or two from now when there are much more pressing matters happening in Sweden now?

Read moreChina: While Uncertainty Remains Over Future Deal, Saab Must Focus On the Present

Victor Muller speaks to TTela’s Valdemar Lönnroth

In an exclusive meeting, Valdemar Lönnroth interviewed Victor on details of the past 96 hours. If you live in the Trollhättan area, get your hands on a copy of today’s paper which has a more complete account. If Swedish is your native language, check out the online edition. For the rest of us, a translation of Victor’s weekend marathon is after the break.

Read moreVictor Muller speaks to TTela’s Valdemar Lönnroth

Production *Should* Start Next Wednesday

This according to Gunnar Brunius, Saab’s purchasing manager and production director. According to DI, the money for the first Saabs was wired from Pang Da. This effectively quashes claims from skeptics who thought the deal too good to be true (read: TTAC). From DI:

“I expect the plant to begin production on Wednesday of next week since they’ve come to the Saab on Tuesday this week,” said Gunnar Brunius, Purchasing and Production Manager at Saab Automobile to DI.

On Tuesday, he initiates the process of agreeing with Saab’s 800 suppliers so that they start to deliver the components again after a six-week shutdowns.

The major suppliers, including IAC, Sweden, Plastal and car seat manufacturer Lear, are invited to personal meetings, while many other contacts are handled through e-mail.

“Many of them will certainly take up demands for immediate cash payment, or nearly so,” said Svenåke Berglie, president of Automotive Component Group [FKG].

The plan is that Saab will begin production at a level of 230-240 cars per day.

This may be optimistic, but for Gunnar Brunius to give a mid-next week target date, they must be reasonably confident that they can make it.

Victor Muller to meet Staff in Trollhattan @12:30 Today

From TTela:

Muller to meet staff today

Saab’s chairman Victor Muller and myself [assuming this means Mikael Rosengren from Saab’s communication dept.] will inform staff at the Saab factory in Trollhattan on the new agreement with Chinese Pang Da.

He was sitting in a plane en route from China state TV 4 News West. A task that is confirmed by Mikael Rosengren on Saab’s communications department.

The information meeting for staff is scheduled to be held at 12.30, according to the television channel.

We’ll obviously provide as much coverage as is possible.

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