Mahindra seeks majority stake in SAAB
Back in May, we welcomed the news that SAAB would be returning to production after a three-year hiatus. National Electric Vehicle Sweden (NEVS), owned by Hong Kong-based National Modern Energy Holdings and founded by Swedish-Chinese Kai Johan Jiang, acquired Saab Automobile, Saab Automobile Powertrain, and Saab Automobile Tools two year ago when the automotive company declared bankruptcy after years of poor sales and financial difficulties.
NEVS was the hero who swooped in to rescue the Swedish brand that still commanded a small but loyal following, until it ran into financial trouble itself when a €127 million investment promised by shareholder, Qingbo Investment, did not materialise; in August, NEVS sought protection from creditors after struggling to deliver on a yearly target of 120,000 car by 2016 even though at its peak in 2006, SAAb produced only 133,000 vehicles. Now NEVS needs rescuing and it has found a willing hero, albeit with vested interest, in Mahindra & Mahindra, India’s largest manufacturer of utility vehicles and tractors.
For now, the partnership is just speculation. Sort of. According to court filing, NEVS is in negotiations with an original equipment maker from Asia to hand over majority ownership. Mahindra has been on a roll snapping up distressed assets and absorbing their technology to bridge the gap it needs to enter European and premium markets. In October, the Indian company paid €28 million for a 51% share in Peugeot’s ailing scooter business. In 2011, it acquired a 70% stake in SsyangYong. It has also in the past attempted to acquire upscale global brands like Aston Martin and Jaguar Land Rover (the latter eventually went to another Indian conglomerate, Tata). Mahindra had also expressed an interest in SAAB before it was bought by NEVS.
However, there is also another Asian contender in the ring. Reports suggest that NEVS is also in talks with China’s Dongfeng Motor. The only detail that NEVS has revealed is that one of the potential majority shareholder is offering to provide a monthly financing of €5 million to cover operating costs until the agreement is complete, which should be by February. Well, that’s not much of a clue since both Mahindra and Dongfeng have deep, deep pockets.