Time appears to be running out for Saab, which hasn't built a single car since 1 April. And the hunt for new investors intensified this week as a deal worth more than £100 million with a Chinese partner collapsed.
Trollhattan factory has been idle since 1 April, halted by cashflow issues which saw suppliers withold parts in response to unpaid bills. Unless the business has an urgent cash injection, analysts say the future is bleak.
Saab's money dramas: the story so far
Last week it seemed as if Saab had found a solution to its cashflow crisis, signing a collaboration agreement worth £132m with Chinese car maker Hawtai Motor Group. This followed a proposed property lease-back deal with former Spyker Cars N.V shareholder and thwarted Saab investor Vladimir Antonov, a refinancing plan to repay European Investment Bank loans guaranteed by the Swedish National Debt Office, and a £26m short-term loan from Gemini Investment Fund.
However, the latest news is that the Saab-Hawtai collaboration agreement has collapsed. Initially the agreement was believed to have failed due to lack of regulatory approvals in China and concerns by the National Debt Office in Sweden. But Hawtai vice-president Richard Zhang told Reuters overnight: 'This situation is complex. It was commercial and economic realities, not a lack of government approval, that forced the termination of our 2 May agreement.'
Saab chairman Victor Muller is understood to be pursuing other potential collaborations, and media reports have linked Chinese SUV and commercial vehicle manufacturer Great Wall Motors to Saab.
Why is China Saab's last hope for financial salvation?
With a burgeoning domestic market for vehicles and a manufacturing environment which requires local joint-venture partnerships, China seems the most likely location for a fresh investor to buy in to Saab. Given the apparent enthusiasm for collaboration, why would a deal like Saab-Hawtai fall over? CAR asked automotive industry analyst Max Warburton of Sanford C. Bernstein for his thoughts on Saab's situation.
'China seems to be the last hope for bankrupt or marginal european automakers - and one could argue Saab does have some attractions given some new product including sedans and an SUV - the two most important segments for Chinese tastes,' Warburton told CAR. 'But nothing will happen without Chinese government approval and we're seeing the Chinese slowing down auto industry decision making. For example a backlog on domestic decisions such as approving the PSA-Chang-an joint venture project that was signed a whole year ago'.
Saab's frustrated suitor: Vladimir Antonov
In Europe, Russian banker and businessman Vladimir Antonov maintains his eagerness to invest in Saab. Yet questions over his eligibility to invest in Saab linger from the original sale of the firm to Spyker Cars N.V by General Motors, when Antonov was specifically barred from participating in the sale due to stakeholder concerns over his business practices.
Antonov maintains his businesses are proven legitimate by independent investigations, and has indirectly supported Saab by purchasing the Spyker sports cars division of Spyker Cars N.V in early 2011. However permission for Antonov to invest directly has continued to have been the subject of protracted negotiation between the Swedish Government, Spyker N.V and General Motors.
What happens now for Saab?
The status quo continues. In an official statment Spyker Cars N.V confirmed that talks continue with other potential partners in China, and with the European Investment Bank to complete the existing loan drawdown, and meet conditions to enable the asset lease-back proposal to proceed. Saab continues to market, sell and support its existing range of vehicles.
However Saab is unable to restart production until it resolves its financial problems. The longer Saab continues without new production, the more the existing inventory of new vehicles for dealers dwindle, and encouraging sales momentum (UK sales were up 73.5% in the first quarter of 2011, to 2378 units) will be lost.
Over the past six weeks Saab's owners have explored various solutions which have failed to resolve the growing crisis. Until a valid investor is found that can meet the needs of both Saab's and their own stakeholders, the company's future remains in limbo.
1 March 2011 - Saab Phoenix concept (2011) at Geneva motor show
5 April 2011 - Latest Saab production halt raises concern
11 April 2011 - Saab's latest factory shutdowns 'just a blip'
16 May 2011 - Saab announces new China Joint-venture
16 June 2011 - Saab 9-5 Sportwagon (2011) prices and revised 9-5 range
24 June 2011 - Saab unable to pay wages as financing crisis deepens
27 June 2011 - Saab secures more funds as it seeks to avert collapse
28 October 2011 - Saab is sold again: two Chinese makers buy Saab
1 November - Saab 9-3: is this the new 2013 hatch