Saab said to be near deal with Chinese carmakers to raise cash

STOCKHOLM (Bloomberg) -- Saab is negotiating an investment and production deal with three Chinese carmakers, which may result in a deal within days, two people with direct knowledge of the matter told Bloomberg News.

Saab is in talks with Great Wall Motor Co., China Youngman Automobile Group Co. and Jiangsu Yueda Group Co., said the people, who declined to be identified as the discussions are private.

The talks with all three companies are advancing and a deal with one could soon be finalized, the people said.

Saab is seeking a Chinese partner to raise funds amid a cash crunch that has forced it to halt production. The move would also give it an entrance to the world's largest auto market.

A Chinese partnership agreement would likely include an investment in the Swedish carmaker as well as forming a joint venture to produce Saab vehicles in China, the people said. It may also include the Chinese company distributing the Swedish brand at its dealerships.

Focus on new 9-3

The production aspect of the Saab deal would focus on the Chinese company producing the updated 9-3 model, scheduled for release late next year, the people said.

Great Wall Motor, China's largest maker of pickup trucks, has been one of several Chinese companies in talks about a joint venture with Tata Motors Ltd.'s Land Rover, Chairman Wei Jianjun said last month, adding then that "nothing concrete" had come out of the talks so far.


Eric Geers, a Saab spokesman, declined to comment on the talks. Shang Yu Gui, Great Wall's director of communications, said he has "no idea" if talks are happening. An official at Jiangsu Yueda Group Co.'s president's office declined to comment as did staff in the chairman's office at China Youngman.

Saab owner Spyker Cars today reported a first-quarter net loss of 79 million euros ($118 million) compared with profit of 6.96 million euros a year earlier.

Saab won't meet a target to sell 80,000 cars this year because of the production halt, it said.

Saab suspended manufacturing after component makers stopped deliveries and demanded payment.

The Swedish unit is short of cash after last year's sales of 31,696 cars fell short of an original target range of 50,000 to 60,000 vehicles.