By on October 14, 2011

 

There was no better place to clear up some questions about Saab than in Chengdu. After all, nowhere can you find the CEOs of all major Chinese carmakers and government officials all under the same roof, or even at your dining table. There also was no better place to get entangled in the messiest web of facts and fiction. Here is some local color:

When on stage, nobody made any public announcements or mentions of Saab. Even when a lone moderator of a group discussion dared to say that “Saab certainly is a hot story,” he was ignored by Pangda’s chairman Pang Qinghua, who was one of his panelists.

Did I say no one? I lied. Representatives of BAIC, from Chairman Xu Heyi on down, never missed a chance to weave Saab into public comments. It was usually branded as “cooperation.” Once, the “cooperation” mutated to “joint venture,” but that could have been a slip of the simultaneous translator. BAIC had bought tooling of previous generation Saabs, and appears to be quite happy with what they received.

Any remarks coming from Chengdu were made, as they say, “at the sidelines of the conference.” When Chairman Pang had said “now that Saab is in bankruptcy protection, all previous pacts are invalid. It’s up to the court to decide. It can also find a new partner,” he had said it. The quote still sits on the little black recorder Reuters reporter Fang Yan had stuck in Pang’s face. There was no room for a “misunderstanding.” Both are Chinese and literally saw eye-to-eye. The later “what I meant …” correction was no correction. It was damage control.

Interestingly, Chairman Pang was the lone Chinese voice that warned against introducing new brands to a China that already is knee-deep in brands. Ever the boss of a car dealer, he warned that new brands require huge investments (also) from dealers, that customers treat unknown brands with suspicion and reservation, and that his dealerships don’t have the room to show all these new brands. Those were not the words of someone who is about to introduce another unknown brand to China. Saab has no brand equity in China.

When word spread that Youngman had (finally) sent money to Saab, it was quickly noted that nobody had said when, how much and for what. On Wednesday, Youngman had denied any comment. Conference participants were divided in their comments. Some called it downright “crazy” to send money to Saab under the circumstances. Some noted that paying a little money, even if it is paid for not completely clear intellectual property, establishes an interesting legal position that could take many years to challenge, especially in a Chinese court. Intellectual property cases already tend to be lengthy. By the time it is sorted out who bought what, who cheated whom, and who misunderstood  when, that PhoeniX  platform probably will be ready for cremation.

As for the NDRC decision, there was no one at the conference that would not have questioned the sanity of a person that hopes for an impending decision. People who have seen the NDRC in (in-)action suggest immediate medical care when someone thinks that the NDRC will approve the Saab deal within days, or even months. At a conference that was very serious, predictions of  quick NDRC action always was good for laughs. It’s the end of October 14 in China, for when a decision of the NDRC was expected and predicted. There was none.

Get the latest TTAC e-Newsletter!

9 Comments on “Our Daily Saab: Chengdu Noodles...”


  • avatar
    Dimwit

    This is the Hummer story all over again. The government is not going to allow any overseas adventures and typically Chinese will also not say “no”.

    They must be getting aggravated in how long it’s taking for Saab to roll over and play dead.

  • avatar
    jeff_vader

    Does anyone know if the NRDC say no, can Saab/SWAN/PangDa/Youngman appeal the decision? I just want someone, somewhere finally to say this charade is over & the idea of it dragging on through the Chinese courts for another six months just fills me with dread.

    But look on the bright side, if this does drag on til March then Saab will have made fewer cars in 12 months than that other Muller run goliath of the motor industry, Spyker.

  • avatar
    DC Bruce

    Accepting the premise that bureaucracies are the same everywhere, it should surprise no one that the Chinese agency has not acted. Nor should such non-action be interpreted as anything but a denial. It’s just easier for the bureaucracy to defend inaction than action of any kind, even when the bureaucracy knows (as appears to be the case here) that delay beyond a certain point in time (which probably already has been — or soon will be — reached) is a denial, because the “window of opportunity” that precipitated the request will have closed.

    Anyone who has any experience dealing with bureaucracies — in any reasonably advanced country (certainly including China) — knows this to a certainty.

    • 0 avatar
      Educator(of teachers)Dan

      The purpose of the bureaucracy is to perpetuate the bureaucracy. I’m sure this is especially true in a country like China that has a bureaucratic tradition that is likely longer than the traditions of some major world religions.

  • avatar
    MOSullivan

    Wouldn’t any payment from Youngman be the loan secured by the Phoenix platform? If Youngman wants the technology it has to make the loan. The question is whether it wants Saab or Phoenix.

    If Saab needs 1-2 billion euros to make it a viable company (assuming there are buyers for its vehicles) are the Chinese companies able and willing to kick that much in? The Youngman web site avoids financial information like it’s radioactive. The Pang Da site says it had “35.5 billion of income, 1.01 billion profits” last year. If that’s renminbi it’s approximately 4.3b euros and 121m euros. Pang Da doesn’t have deep pockets and Youngman is a closed book. Perhaps more investors could be found but there’s a limit to the number of interests trying to steer the company before it becomes unmanagable.

  • avatar
    Charles T

    Sounds like Pangda is getting bearish.


Back to TopLeave a Reply

You must be logged in to post a comment.

Subscribe without commenting

Recent Comments

New Car Research

Get a Free Dealer Quote

Staff

  • Authors

  • Brendan McAleer, Canada
  • Marcelo De Vasconcellos, Brazil
  • Matthias Gasnier, Australia
  • W. Christian 'Mental' Ward, Abu Dhabi
  • Mark Stevenson, Canada
  • Faisal Ali Khan, India