News - Saab
Saab in trouble again
New Saab owner halts production after failed shareholder causes cash-flow issues
21 May 2014
SAAB'S Chinese-Japanese owner has temporarily halted production of the re-born 9-3 sedan after one of the company's shareholders failed to properly finance the operations, resulting in a cash-flow problem.
The iconic Swedish brand was resurrected last year by the Chinese-Japanese conglomerate National Electric Vehicle Sweden (NEVS) using old General Motors-developed platforms and technology to produce the 9-3, initially powered by internal combustion engines before a roll out of electric-powered cars.
A release from NEVS says that Qingbo Investment Co. Ltd has not “fulfilled their contractual obligations” to finance the company, leaving NEVS' main owner, National Modern Energy Holdings as the only remaining financier.
Despite a 3 billion SEK ($A4.9 billion) cash injection from National Modern Energy Holdings, the company concluded that it was unable to fund NEVS on its own, as it needs to not only pay suppliers but also build a new battery factory and technical centre.
Further investment looks to be on the way, with NEVS saying in the statement that it has signed an agreement with a “major international automotive” company to develop the Phoenix architecture.
The Phoenix was a concept coupe from the 2011 Geneva motor show that was built on a new platform slated to underpin the next-generation 9-3, the 9-4X crossover and a series of other new models.
The company says it is also negotiating with another global automotive company to take a stake in NEVS, with the objective of boosting its resources to develop Saab as a “global premium car brand name”.
“The partnerships will contribute to secure NEVS with the right financial and technical support to develop new products and distribution of cars on a global basis,” the statement said.
Some of the short-term measures NEVS has taken to reduce its costs include halting production of the 9-3 sedan which currently rolls off the production line at a rate of six cars per day as well as axing a number of hired consultants. It is not known how long the production halt will last.
Production at the Saab production facility in Trollhattan, Sweden recommenced late last year following a successful pilot program in September, with Swedish delivers starting in late December after an online sales campaign.
NEVS announced last month that it was building 200 9-3 EVs for a pilot program in China before a wider roll-out of the green-powered vehicles in Sweden and China.
The production halt and cash-flow issues are the latest in a long line of dramas for the Swedish car-maker that date back to the global financial crisis in 2008 which forced then owner General Motors to offload the loss-making brand as a part of its wider recovery plans.
After a number of failed buy-outs by parties including Swedish supercar-maker Spyker, Saab was eventually purchased by NEVS in September 2012 with the promise of turning the company into an electric vehicle manufacturer.
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