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NINETY EIGHT REGENCY

Saab pushing on with small car plan

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Saab pushing on with small car plan

June 24, 2010 06:01 CET

BILBAO, Spain (Reuters) – Spyker Cars NV wants to secure a platform-sharing partner for Saab's planned new 92 small car before deciding how to fund the project, and hopes to decide on a partner by year-end, CEO Victor Muller said.

Niche Dutch carmaker Spyker took over Sweden's Saab from General Motors Co. earlier this year and is working to revive the flagging brand.

Under GM, Saab's sales slumped to around 40,000 cars last year from around 130,000 five years ago.

Muller said that "in a perfect world" the new 92 small car will compete with the cars such as Audi's A1 and BMW AG's Mini and would be launched in 2013.

"We are still in the middle of discussions with potential platform-sharing partners, and we haven't got the funding in place, so those are two massive variables that need to be answered," Muller said in an interview on the sidelines of the Automotive News Europe Congress in Bilbao.

The company is in talks with several partners and should make a decision by year-end, Muller said, declining to comment on the identities of the other carmakers.

Swedish daily newspaper Dagens Industri reported earlier this month that the two companies were in talks over sharing engine and transmission technology.

Muller said he had not yet decided on how the project would be financed.

"There are many ways to skin that cat. We don't want to do massive share issues as that's very unattractive," he said. Raising the several hundred million dollars likely needed through a share issue would dilute existing shareholders' shares too much, he explained.

"If it would be a good business model for the company you could consider taking on debt, but it's way too early to start thinking about that structure," he said.

"Clearly we're not very keen on loading ourselves with debt," Muller said.

Muller said he hoped the company would be cash positive by the end of 2011.

Asked if Saab would consider jointly developing the platform itself with its new partner, Muller replied: "That's not unthinkable ... Then you would probably be looking more at a 2014 launch," Muller said.

Dual listing

Spyker is also planning a dual listing – it is already listed in Amsterdam – but this is not in order to raise cash for the 92, Muller said.

The company has chosen Stockholm for the dual listing because of its good reputation as a market for engineering companies and also to strengthen the company's Swedish identity, Muller said: "We want to make the brand as Swedish as we can."

It is talking to the Swedish stock exchange about what is needed for a listing, he said. "If we do it, it's going to be done this year," Muller said.

Making Saabs more "Saabish"

Referring to the appointment of designer Jason Castriota, formerly of Fiat's prestigious sports car unit Ferrari, Muller said Castriota had been the only person he considered.

"I had my eye on him and him only. I didn't talk to anyone else," Muller said.

"The designs I saw didn't meet my expectations. I thought the car needed to be bolder, more aerodynamically inspired, more Saabish."

Referring to the 9-4 X crossover that will go on sale in April, Muller said Saab had lost customers, despite their inherent loyalty to the brand, because they lacked the variety of other carmakers offering options such as four-wheel drives and crossovers.

"It's not easy to make a Saab customer leave," Muller said, adding, "Saab doesn't need any new customers, it only needs its old customers back

Read more: http://www.autonews.com/apps/pbcs.dll/article?AID=/20100624/ANE/306239936/1265#ixzz0rmcDnIkT

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