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Saab Looks To Chinese For Cash Infusion

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On: Mon, May 2, 2011 at 3:11PM | By: Tim Healey

Saab Looks To Chinese For Cash Infusion

Saab is struggling to come up with enough cash to survive, and the company is looking to several Chinese companies for help. Saab is in talks with three Chinese automakers in regards to an investment and production deal. A deal could be reached within days.

Saab is talking to Great Wall Motor Company, China Youngman Automobile Group Company, and Jiangsu Yueda Group Company. Talks with all three are moving forward, and a deal with one of the three may be reached soon.

The Swedish automaker, which is owned by Spyker, has suffered a bit of a cash crunch in recent months, forcing it to halt production.

A deal could give Saab entry into the Chinese market. It could also mean that one of the Chinese companies will invest in Saab, or produce Saabs in China in a joint venture. The Chinese company could even sell Saabs through its dealerships in China.

It's a good bet that the Chinese company that strikes a deal with Saab will produce the next 9-3, which is scheduled to be launched late in 2012. All three Chinese companies and Saab declined to comment about any talks.

Spyker lost 79 millions euros ($118 million) in the first quarter of 2011, comparing to a profit of 6.96 million in 2010. Thanks to the production halt, Saab will fall short of a production target of 80,000 units.

Last year's sales of 31,696 units left it short of its goal of 50,000 to 60,000 vehicles, thus leaving it short of cash.

Despite these struggles, Saab still plan to launch its 9-4X crossover SUV this year, and it showed a concept vehicle at the 2011 New York International Auto Show.

If a Chinese buyer saves Saab from its struggles that will be another strange turn of events in a turbulent time for the brand that begin with the bankruptcy of General Motors. Saab was left in limbo until Spyker rescued it, but the brand is still hanging in there until new product can be launched. Saab buyers have long appreciated the cars for their quirkiness, but there might not be enough Saab buyers out there.

Spyker hopes that's not the case, but, in case it is, it might just need some help from the Chinese.


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