Chinese-Made Saab to Be Produced in Two Years

Odd as it seemed at the time of the announcement made a couple of days ago, the partnership between Swedish manufacturer Saab and an internationally little known Chinese car dealer is expected to produce its first results in a very short time.

Strapped for cash and with the production frozen because of unpaid debts to its suppliers, Saab had to force the entry of a Chinese investor, Pang Da, who could provide immediate cash and ask for little in return for the short time.

Pang Da, which is one of the biggest car sellers in China (the company operates 1,100 dealerships in the country and will open 50 Saab-exclusive stores) will pay EUR30 million to purchase cars from Saab, has taken a stake in the car maker through Spyker and will become Saab's manufacturing partner in China.

The first models to be produced under this new alliance will arrive on the market two years from now, Wang Yin, Pang Da's board secretary told Reuters. At least, that's the plan, who can be changed depending on regulatory approval.

The tie-up between Saab and Pang Da, with Spyker caught in between, calls for the set up of three different businesses in China: one will be in charge with the distribution of Saab vehicles, the other for the production of Saab branded vehicles, and one with the production of a local sub-brand of Saab.

As for what Saab hopes to achieve in China, the sky is the limit. Activating on one of the world's strongest markets, Pang Da managed to sell last year 470,000 vehicles last year, a stronger achievement than in 2009. The cars Pang Da will produce, however, will remain mostly a Saab-endeavor.

"We have no intention to be deeply involved in the manufacturing side. We are only interested in being a minor shareholder in the future JV so as to better adjust our strategies in accordance with output levels," Yin said.