Beijing Automotive Buys a Saab Lineup

And by doing so, finally gets a lineup of their own

By Brendan Moore

12.13.2009

Saab emblem blue backgroundUPDATED: 12.14.2009 12:15 – Negotiations between China’s Beijing Automotive Industry Holding Corp (BAIC) and GM regarding the sale of the technology and tooling required to produce all the iterations of Saab’s previous 9-5 and 9-3 models has concluded today with the preliminary sale of same to BAIC, according to sources in Sweden.

Beijing Automotive will build the older models in China under their own, as yet undisclosed, brand name.

The sources offered assurances that the deal for the older models will not impede the possible sale of Saab to a new owner in any way.

There is no official comment from GM, Saab or Beijing Automotive. Previous comments by Saab officials regarding the possible sale of the old technology to Beijing Automotive merely stated that Saab was confident that any new versions of old Saabs produced in China would not injure the Saab brand elsewhere in the world.

Saab is fighting for its very existence since the canceled sale of it to Koenigsegg, a tiny Swedish manufacturer of low-volume supercars. Beijing Automotive was Koenigsegg’s financial backer to the tune of $300 million USD in that previous deal gone astray.

2011 Saab 9-5

If Saab survives, it has a new 9-5 (first update of the large sedan in a decade) in the pipeline, which is scheduled to appear in April of 2010.

Saab does not have a new 9-3 ready, and will sell the existing 9-3 until it does, according to reports. Although it appears that Saab has sold at least some of the current 9-3 platform to Beijing Automotive, they have apparently included a clause that allows them to keep marketing the 9-3 until they can gin up a replacement.

That potential dilemma prompts another question for whatever next version of Saab exists, which is, “what are Saab’s plans for the 9-3 line?”

But, first things first. Saab needs to survive before it can worry about its future lineup. This deal to sell some of its older assets will bring the company some much-needed cash for operational puposes and make it that much more attractive to a potential buyer.

If Saab can consummate this side deal and get a new buyer to believe the company itself has a future, then maybe they can sell enough of the old 9-3 models and the new 9-5 models to stay afloat until reinforcements can arrive at the sales front. Saab is going to sell only around 10,000 units this year (a huge drop) in the United States in 2009, one of its key markets, and if the 9-5 is as good as it appears, Saab just may be able to at least get close to matching those sales numbers and hang on in the next couple of years as it regroups.

COPYRIGHT Autosavant – All Rights Reserved

Author: Brendan Moore

Brendan Moore is a Principal Consultant with Cedar Point Consulting , a management consulting practice based in the Washington, DC area. He also manages Autosavant Consulting, a separate practice within Cedar Point Consulting. where he advises businesses connected to the auto industry. Cedar Point Consulting can be found at http://www.cedarpointconsulting.com.

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9 Comments

  1. Just how is that going to work? A one-model car company? They must have the rights to the 9-3 for a couple more years.

  2. Saab still has the current 9-3, BAIC is buying the previous 9-3 from between 98-2002, which also shares platform, engine and gearbox with the 9-5.

  3. The reports out of Sweden seem to say that Saab can make the 9-3 for another year until BAIC starts production in China, and that 9-5 production will cease shortly until the new 9-5 comes on line.

    Wonder where the tooling is for the 99 and the 900?

  4. But Reuters is only reporting the existing 9-3 and the 9-5 have been sold to BAIC, with no other sale modifications mentioned concerning continued production by Saab. I’m sure the confusion will be cleared up soon. I can’t think that Saab would allow itself to have only the 9-5.

  5. It is most likely that Saab has retained the option of making the 9-3 for themselves for some time even if they have sold it to the BAIC company. The new owners cannot make these cars the day after the sale is finished because it will take some long time to set this up in China. Maybe Saab will make the 9-3 in this time period until the new AWD 9-3 is made for all sales.

  6. Grim picture. SAAB is definitely dead man walking. Someone has to be out of his mind to pay any cash for SAAB. FIAT did not pay for Chrysler, why someone has to pay for SAAB?

  7. They can use the money and I’m glad to see the sale. Now if they can sell the company, it’s all good.

  8. So where will future replacement parts come from for the current 9-5 and 9-3? Only from China? That doesn’t sound promising.

  9. I guess that’s where the replacement parts will have to come from if that’s where they’re made. I just don’t know how comfortable I am buying Chinese-made replacement parts. I’m sure those would be ok later, but I’m a little nervous about doing that in the near term.

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