Quirky Saab styling should fit right in at BAIC.
Koenigsegg Group AB, the ultra small Swedish sports car maker for the ultra rich, said this morning that Beijing Automotive Industry Holdings Company Ltd would become a partner as it buys Saab from General Motors Company. The new financing announced today was first revealed yesterday by TheDetroitBureau.com.
BAIC, which is controlled by the Chinese Government, will become a minority owner in Koenigsegg Group when the deal is finalized by the end of the year.
The sales still requires that Saab obtain about $580 million in loans from the European Investment Bank and loan guarantees from the Swedish government. The Swedish government confirmed yesterday that it had received the new Saab proposal. It is now studying whether to provide the necessary loan guarantee. It would not comment further. EIB will rule on the loan late in October.
At the core of the matter is whether Saab can become viable under the undisclosed business plan. BAIC would give Saab access to China, the world’s largest auto market.
General Motors had signed a memorandum of understanding in August to sell Saab Automobile AB to Koenigsegg, but without all of the needed financing in place. The Swedish government then refused to lend money to Koenigsegg. At the time, Koenigsegg said it needed another $425 million to make the proposed business plan work.
“We have a solid business plan, an important partnership and we are now in a position to go ahead without any governmental financing,” said Christian von Koenigsegg, founder and chief executive of Koenigsegg Group. He refused to provide further details.
Beijing Auto proposed an unsuccessful bid for GM’s European brands, Opel and Vauxhall, earlier this summer.
Media speculation has it that Beijing Auto is also a bidder for Volvo, Ford Motor Company’s loss-making Swedish subsidiary.
BAIC is one of the country’s major auto producers and among the eight largest automobile groups in China. It produces 700,000 vehicles per year in three major categories — off road vehicles, light-duty trucks and vans. BAIC is thought to be seeking access to western auto technology.