Saab: production down Monday, signs $351 milion deal with Youngman, Pang Da image

Production at the struggling Swedish carmaker Saab Automobile AB is still down, and according to the company, the entire production will be closed all of next week while it negotiates with suppliers to get a stable material flow to the factory.

Saab spokeswoman Gunilla Gustavs said Friday the plant will be closed next week, but would not give a definite forecast when production is expected to start again, saying the flow from suppliers needs to stabilize first.

However, on Monday morning, Saab has signed a nonbinding agreement with two Chinese companies, which will inject a total of euro245 million ($351 million) into Saab-owner Spyker Cars NV.

Saab said Zhejiang Youngman Lotus Automobile Co. will invest €136 million for a 29.9 percent stake in Spyker to participate in joint ventures to make and distribute Saab-branded cars in China.

Pangda Automobile Trade Co., which agreed on an equity and distribution deal with Saab May 16, will pay 109 million euros for a 24 percent stake instead of the previously agreed 65 million euros.

The agreement “significantly strengthens Saab’s financial position and would secure the mid- and long-term financing of Saab Automobile,” Victor Muller, chief executive officer of Spyker and Saab, said in the statement.

Victor Muller, CEO of Spyker and Saab Automobile said: “Having entered the MOU on May 16 with Pang Da, we collectively immediately set out to identify the most suitable (manufacturing) partner to join Saab and our joint ventures. We are convinced that Youngman represents all the qualities required to make Saab and the joint ventures a success. This MOU not only shows the belief of Pang Da and Youngman in our products for the Chinese market, it also is a step that significantly strengthens Saab’s financial position and would secure the mid and long term financing of Saab Automobile. Both Pang Da and Youngman have demonstrated a similar entrepreneurial mindset as we have which we feel will be instrumental to establish Saab’s presence in China. I am very confident that based on their experience, proven skills, their ability to move quickly and their financial strength, we found the partners that are best suited to fully explore Saab’s potential in China.”