Saab looks to China’s Youngman
BY RON HAMMERTON | 14th Jun 2011
Youngman Automobile – full name Zhejiang Youngman Lotus Automobile Co Ltd – has signed a three-way deal with Saab owner Spyker Cars NV and its new Chinese distributor Pang Da Automobile for joint ventures to not only make and distribute Saab cars in China but also a second brand – tentatively dubbed ‘child’ – to be created by the partners.
Effectively, Youngman will buy a 29.9 per cent slice of Spyker to become the Chinese manufacturing partner for the strategic alliance, with Pang Da handling most of the distribution through its huge dealership network of more than 1100 outlets.
The deal – costing Youngman €245 million ($A333m) – still needs to be approved by Chinese and Swedish authorities and third parties such as General Motors and the European Investment Bank – a stumbling block that tripped Saab’s previous attempt with Hawtai Motor.
The latest attempt to shore up the ailing Swedish brand comes as Saab tries to wrap up the sale of its Trollhattan facilities and lease them back to ease its cash crunch.
Production of Saab cars stalled again this week due to parts shortages, with Saab saying it was negotiating with suppliers as it tries to raise more cash to pay them.
Under the terms of the memorandum of understanding signed by all three parties, two joint ventures will be created for the Chinese business. In the manufacturing joint venture, Youngman and Saab will both take 45 per cent, with Pang Da taking the remaining 10 per cent.
For the distribution branch, Pang Da will be the dominant shareholder, with 34 per cent, with Youngman and Saab taking 33 per cent each.
Pang Da will hold 24 per cent of parent company Spyker, with Youngman taking 29.9 per cent for €136 million ($A184m).
Spyker CEO Victor Muller said Saab had set out to find a manufacturing partner in China after signing its distribution arrangement with retail group Dang Pa.
“We are convinced that Youngman represents all the qualities required to make Saab and the joint ventures a success,” he said.
“This MOU not only shows the belief of Pang Da and Youngman in our products for the Chinese market, it also is a step that significantly strengthens Saab’s financial position and would secure the mid- and long-term financing of Saab Automobile.
“Both Pang Da and Youngman have demonstrated a similar entrepreneurial mindset as we have, which we feel will be instrumental to establish Saab’s presence in China.
“I am very confident that based on their experience, proven skills, their ability to move quickly and their financial strength, we found the partners that are best suited to fully explore Saab’s potential in China.”Youngman CEO Mr Pang Qingnian said his company had been in contact with Saab Automobile for some time.
“We feel that Saab as a premium European brand appeals strongly to the taste and preferences of the Chinese customer who is looking for top quality vehicles with the highest levels of safety, driving pleasure and comfort and an unmistakable design language,” he said.
Youngman has a strategic alliance with the Malaysian-owned Proton and Lotus Cars, handling their products in the Chinese market.
The Proton cars are sold under Youngman badges, the company makes the Gen 2 – known as the L3 in China – in sedan and hatchback forms, and the larger L5. The latter – launched in April – is powered by a 90kW 1.6-litre petrol engine with five-speed manual gearbox or four-speed automatic.
The company is based in Zhejiang province, south east of Shanghai, and has factories in Jinan, Taian, LIanyugang and Quzhou.
Its website says it exports vehicles to the US, Europe, Russia, South Korea, Singapore and the Middle East.
Youngman is said to have a strategic alliance with US-China electric vehicle specialist Zap, working on new-generation electric cars.
