On July 4th, Saab signed agreements with two Chinese companies, Pang Da and Youngman. The signatures on those deals converted what was a Memorandum of Understanding into a binding agreement that subject to approvals, will provide the stability, strength and reach into new markets that Saab needs to be a sustainable and successful car company.
There has been some doubt in the community as to whether or not those approvals will be forthcoming. The big tick has to come from the National Development and Reform Committee (NDRC) in China.
Two of the key Saab players in the deals with Pang Da and Youngman are Anna Petre, our Director of Government Relations, and Martin Larsson, our Director of Business Development. They both spoke with Trollhattan’s local newspaper, TTELA, yesterday and they gave a bit of insight into the process and how it is evolving. In a nutshell:
- The applications are made by Pang Da and Youngman, not by Saab, but Saab is in constant contact with all involved and provides all information required by the applicants.
- The applications go through several stages of approval at levels more local/regional than the national level, prior to being reviewed by the NDRC itself. You progress though one level to the next, and so on. Our progress through this very structured process continues, and the progress that we’ve made so far gives us confidence that the deal will be approved in the near term.
You cannot place enough emphasis on what these deals mean for Saab.
Many have looked simply at the buy-in price of €245,000,000 and concluded that that’s not enough for Saab to commence sustainable operations. What they seem to overlook is that that figure is just the buy-in price. There will be investment in vehicle development, joint-venture manufacturing as well as assistance for re-financing that will change the operation of this company completely.
In Pang Da, we have access to the biggest publicly traded dealership group in China, with over 1,100 outlets. This is a significant in-road into what is now the world’s largest automotive market and will provide Saab with increased demand as well as a much larger distribution network that is already well established and has strong customer links.
In Youngman, we have a manufacturing partner that will see us eventually develop and build vehicles in China for distribution in China and other markets, whilst still maintaining our base and manufacturing in Trollhattan. We also have an agreement in place with Youngman for the development of three new Saab vehicles that were not in our previous product plans – tentatively named as the 9-1, 9-6 and 9-7.
Again, you cannot place enough emphasis on what these deals mean for Saab’s future. It means a stable financial base, increased consumer confidence, vehicle development, manufacturing and distribution. The interests of Pang Da and Youngman do not end when they buy-in to this company. That’s where they begin.
As we speak right now, this is the future that we are seeking a bridge to.