Sweden Willing to Aid Automotive Industry

The Swedish government confirmed on Thursday that it agrees to help the domestic carmakers go through the economic crisis and aid them to concentrate on fuel-efficient engines. Sweden will provide a $3.10 billion credit to Volvo and Saab, but there's no plan to buy stakes in these two companies, Reuters reported today. Similar to other companies who saw their sales going down on most emerging markets, the Volvo and Saab encounter extremely difficult times due to the same much-debated economic recession.

More importantly, Volvo's and Saab's future is in doubt as their parent company, Ford Motor and General Motors, respectively, may sell the two Swedish brands as soon as possible, as part of their attempt to remain on the floating line of the financial crisis.

Just like the US Government who conditioned the $25 billion loan package by asking carmakers to concentrate on environmentally-friendly and fuel efficient engines, Sweden's officials imposed a bunch of special rules, forcing manufacturers to develop emission-friendly vehicles.

"The measures will be taken with the clear assumption that the state does not intend to acquire any of the existing automotive manufacturers," Reuters reported quoting government sources.

Beside all of these, Sweden issued a more “unique” idea that could help the country revive the domestic auto industry: a state-owned firm especially focused on automotive research and new technology development. 3 billion crowns have already been assigned for this task, Reuters wrote.

"We have with these three measures found a structure which allows us, with great responsibility for public finances, to lay the groundwork for solving the real problems of the automotive industry," Finance Minister Anders Borg explained the role of this new investment.