Saab may have finally been saved last week when Chinese companies Pang Da Automobile Trade Co. and Zhejiang Youngman Lotus Automobile Co. agreed to buy the Swedish automaker, thus providing some much-needed short- and long-term financing. Pang Da and Youngman purchased Saab for 100 million euros ($142M USD) and they are offering up a €50 million ($70M) bridge loan. Most importantly, the Chinese companies have now pledged €600 million ($854M) in long-term funding. That's assuming, of course, that the Chinese government gives this deal its seal of approval – a very big "if."

According to Saab's restructuring plan, vehicle production will once again resume in Sweden and Mexico, though vehicles may be built in China in the future. Saab is keen to get its latest products – the 9-4X and 9-5 SportCombi – out to its key markets, and hopes to sell up to 55,000 units in 2012, with an even larger goal of moving 205,000 units per year in the long-term. That's very optimistic, especially considering that in 2010, Saab sold just under 32,000 vehicles.

Even so, Pang Da and Yougman are confident that Saab can become a profitable company in the very near future. The restructuring plan states that 2012 and 2013 will be "financial transition years," with full profitability expected in 2014. Follow the jump to read the full release.
Show full PR text
Swedish Automobile N.V. : INFORMATION ON RESTRUCTURING PLAN SAAB AUTOMOBILE

Zeewolde, The Netherlands, 31 October 2011 - Swedish Automobile N.V. (Swan) announces that Saab Automobile AB and its subsidiaries Saab Automobile Powertrain AB and Saab Automobile Tools AB (together Saab Automobile) today present their preliminary reorganization plan to their creditors during a creditors' meeting in Vänersborg, Sweden.

The preliminary reorganization plan, which was developed by Saab Automobile management and supported by the current and foreseen owners of Saab Automobile as well as its administrator of the reorganization, contains the following highlights:

• Pending the approval from all relevant parties, short- and long-term funding for Saab Automobile is assured: Youngman and Pang Da have expressed their commitment to provide EUR 50 million, to fund Saab Automobile while in reorganization. In addition, the Chinese investors will provide a minimum of EUR 600 million in funding to restart production, to settle the company's clear and due debts and to fund operations for the 2012-2013 medium-term timeframe. To provide funding for the revised business plan and provide long-term financial stability the new Chinese owners have also budgeted funding for the planned expansion of Saab Automobile's portfolio and additional operations to be set up in China. Saab Automobile has not received the funds from Pang Da and Youngman that have been committed for today.

• New strategy and structure to combine the strength of Pang Da, Youngman and Saab Automobile, with Saab Automobile's brand equity and heritage, product portfolio and capabilities being the key elements of that partnership combined with the distribution capabilities of Pang Da in China and the manufacturing expertise of Youngman.

• Key actions during reorganization: establish new ownership structure with Pang Da and Youngman as strategic partners; reach agreement with creditors on repayment of outstanding debt to restore Saab Automobile's supply chain; reduce structural costs by SEK1 billion, among others through reducing headcount by 500 employees; and generally restore confidence and trust with all key stakeholders

• Restart plan highlights include: seamless production restart supported by existing order bank; accelerate access to China as major growth market; new distributorship agreements in other emerging markets like Russia, new products for traditional key markets (65% of volume) and China which include the 9-5 SportCombi and the 9-4X.

• Confirmation of the long-term strategy of repositioning Saab as a distinctive, near premium brand supported by a renewed and broadened product portfolio, a more flexible cost structure with global production footprint, cross-carline modular technology architecture generating synergies, provision of external engineering services and expanded operations to take advantage of growth opportunities available in China and provided by strong Chinese owners.

• Sales targets for 2012 of 35-55,000 cars and 2013 of 75-85,000 cars based on realistic ramp up in line with sales development since last restart.

• Long term volume outlook of 185-205,000 cars of Saab Automobile based on three main growth drivers: 1) broadened product portfolio in fast growing market segments; 2) capitalizing on access to Chinese market, and; 3) strong profitability focus.

• 2012 and 2013 seen as financial transition years, profitability expected no later than 2014. Long term margins and profitability in line with other near premium car manufacturers.



I'm reporting this comment as:

Reported comments and users are reviewed by Autoblog staff 24 hours a day, seven days a week to determine whether they violate Community Guideline. Accounts are penalized for Community Guidelines violations and serious or repeated violations can lead to account termination.


    • 1 Second Ago
  • 14 Comments
      Westcoastsaab
      • 3 Years Ago
      The numbers for the next few years seem realistic, and with the introduction of new models and the cost savings with parts from China and some fat cutting at the factory then maybe it's not too far off. Remember, China is going to be a huge market for these guys, and also remember Russia is opening up too. I'm wishing Saab the best. Hopefully this is the start of better things to come. Yeah!
        TriShield
        • 3 Years Ago
        @Westcoastsaab
        China's market is growing in the single digits, Pang Da only wanted 11,000 units to start out with and it remains to be seen if they could even sell them. The Chinese market is completely saturated with choices and automakers already. The Chinese government wants to consolidate it down drastically. How does allowing a Chinese dealer network and a bit player in manufacturing aquiring a dead Western automaker play into that plan?
      CarCrazy24
      • 3 Years Ago
      So glad to hear this, I know that if I see a 9-5 SportCombi for sale here, I will be first in line!
      IBx27
      • 3 Years Ago
      What's saab?
      drewpy
      • 3 Years Ago
      While i'll probably never buy or drive a saab, I'm glad they still exist.
      David Lloyd
      • 3 Years Ago
      850 million ain't enough to save Saab. What a waste of money!
      asng15
      • 3 Years Ago
      In today's world, no one has this purchasing power other than China. If Chinese don't like HUMMER, HUMMER bankrupt.....
      benzaholic
      • 3 Years Ago
      Good luck with that.
      TriShield
      • 3 Years Ago
      So where's all the projected volume for this going to come from? Is Pang Da going to in effect buy their own cars to resell in the Chinese market? None of the plans address Saab's lack of profitability, they just limp the organization along as-is. Meanwhile a lot of their talent is bailing for jobs with more stable companies. Saab's manufacturing operation is extremely expensive, how long until the lion's share moves to the People's Republic? How long will we have to wait until the Chinese government deep sixes all of this, one month, six months?
      Yu Yung Shin
      • 3 Years Ago
      I hope only the best for SAAB and ppl of Sweden.
    • Load More Comments