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NINETY EIGHT REGENCY

Report: BAIC acquired old Saab rights for $197m; dealers get extra month

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Report: BAIC acquired old Saab rights for $197m; dealers get extra month

12/15/2009, 8:57 AMBY ANDREW GANZ

Yesterday, General Motors, Saab and Beijing Automotive Industry Holding Corporation came to an agreement over the sale of tooling to older Saab products, a deal that reports out of Sweden now indicate was worth $197 million to Saab. In addition, there was good short term news for North American Saab dealers, who saw their contracts extended through the end of January next year.

BAIC required the rights to produce vehicles based on the outgoing 9-5 and the 2003-2006 model 9-3 in China. The deal will give BAIC its first ever line of new cars in China; up until now, the company’s only business had been building vehicles in joint ventures for other automakers. What the deal did not give BAIC was the right to any technologies based on the current 9-3, or the upcoming 9-5 and 9-4x models, which leaves the door open for a new Saab owner to start with a fresh company.

The deal, which is being heralded as a good move by all sides involved, also gave Saab some cash on hand for a new owner.

“The money [from the deal] will finance the new Saab and contribute to a good start under new ownership,” Saab spokeswoman Gunilla Gustavs told Reuters.

Meanwhile, Saab’s North American dealer network received a very last minute stay of execution on their own yesterday. Contracts with current owner GM were set to expire today – it had been assumed that Koenigsegg would be in control of the dealership network by now. GM sent letters to all of Saab’s stores to say that their contracts will be extended through the end of January, which leaves sufficient room for GM to keep selling the brand through the end of the year.

It is unclear what will happen to the dealerships that Koenigsegg had planned to shut down, however.

Saab suitor chosen?

European media outlets are reporting that GM has passed on them name of its chosen buyer to the Swedish government and the European Investment Bank, both of whom plan to provide a loan to the new buyer. GM has not reported the name of the new buyer, although an announcement is expected soon.

LINK:

http://www.leftlanenews.com/report-baic-acquired-old-saab-rights-for-197m-dealers-get-extra-month.html

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