By on February 2, 2010

Spyker has set the goal of turning a profit with its newly-purchased Saab division by 2012, reports Automotive News [sub]. That effort will be led by a total of three Saab products: the existing 9-3 (with a new version rumored for 2011), the forthcoming 9-5 sedan and, later next year, the GM-built Saab 9-4X Crossover. Other models, including a 9-1 compact are being hinted at, but Spyker acknowledges that such a product would require about a billion dollars more than Saab-Spyker currently has access to. Meanwhile, those three vehicles will have to generate 100k-125k annual sales in order to keep the business plan rolling along. Saab-Spyker honcho Victor Muller has an almost shockingly confident take on this possibility, telling Reuters:

It’s all about the restoration of the confidence in the company. Customers have been very reluctant to buy because of the uncertainty surrounding the brand… Saab has to do nothing but regain its existing and old customers because that in itself would be in enough to create a very strong business model..

Saab sold a total of 8,680 vehicles in the US over the course of 2009. Globally, the firm sold 39,903 units last year, down from 94,751 in 2008. Perhaps the challenge is a bit more difficult than Muller lets on.

Muller says Spyker-Saab (the name change will become official on the 12th of this month) requires “peak funding” of about one billion dollars to complete its turnaround. $326m of that funding comes as development aid from GM, which will receive that amount in  redeemable preference shares in Saab. $400m is set to come from a European Investment Bank loan that, while guaranteed by the Swedish government, could still be rejected (for good reasons) by EU regulators. But the financial troubles don’t end there.

Apparently  $50m of $74m cash portion of the deal has been funded on a 50-50 basis by a loan from an investment vehicle of Muller’s, and shares predominantly issued to GEM Global Yield Fund Ltd for which it has received a €150m credit facility. Another $24m is due on July 15, but has yet to be funded. According to the company, “Spyker has been approached by various investors to fund this instalment. Spyker intends to finance this amount primarily through senior debt.” Saab-Spyker assets have been pledged to GM as security for this as yet unfunded final payment.

It’s not immediately clear when or how Muller intends his investment vehicle’s $25m investment to be repaid, and indeed this new investment vehicle is also raising concerns among investors. Spyker was required to buy out mobbed-up Russian plutorcrat Alexander Antonov before GM approved the deal, and this new investment vehicle was the way to get it done. But, Muller refuses to reveal who exactly is behind the fund, telling Reuters that a confidentiality agreement prevents such disclosure. This is being seen within Holland [via]as yet more evidence of Muller’s infatuation with risky, creative financing.

Under Dutch law, Muller’s ownership of over 30 percent of the new combined firm would require him to make a public offer within 30 days of the deal closing. Per Reuters:

although he did not indicate he would make a public offer for the company, Muller said his options include selling shares in the market, selling shares to an investor, or making a public offer for the company.

But he added any public offer would be made against the average price of Spyker shares over the past year and that investors would be unlikely to offer their shares at that price given that the offer price would be below the current market price.

Spyker shares, which debuted at €15.50 per share in 2004, had risen to about €6.8 last week, and have since fallen to about €3.5.

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20 Comments on “Spyker Claims 2012 Profit Goal For Saab...”

  • avatar

    Good luck with that.

  • avatar
    Facebook User

    It’s nice to see naivete and starry-eyed dreams still have their places in the world… at Spyker HQ, apparently.

  • avatar

    Most people around here tell you if they like the styling only after they know what the badge is . . . a Spyker has NEVER failed to get an “oooooooooh” out of me before knowing what the car is.

    If Saabs looked like Spykers (for the saab price), sales would go up.

  • avatar

    What’s wrong with believing that when you triple the number of models available for sale, your triple your sales ?
    Many A6 buyers are former Saab owners wanting to come back. Same applies to the CUV/SUVS offerings from BMW/Audi.
    There is an Audi/BMW fatigue creeping in, at least in Europe.

    • 0 avatar

      100,000 won’t come easy, but is quite plausible a goal for 2012. This year, they’ll be lucky to sell 55-60,000, and perhaps 80-85,000 in 2011.

      In retrospect, they did manage to sell 40,000 vehicles while the media was blasting them, declaring them dead, resurrecting them, selling them to Geely, Fiat, BAIC, Koenigsegg, Spyker, winding them down and what not, all this while they practically had one sellable model: the 9-3, and a zero dollar advertising budget.

      With two brand-new models, an all-new 9-3 coming out in 2012 (realistically as a MY13 vehicle) and some advertising dollars 100,000 is a conservative estimate. With the new 9-5 and 9-4X, Saab will be able to tap two market segments where it has been practically absent. If they manage to keep sales sales above the 100K mark and not fall into another 10 year model cycle, profitability is possible.

    • 0 avatar

      Audi/BMW owners are really clamoring for Saab-styled GM cars for their next vehicle purchase?

    • 0 avatar

      Not plausible. But nobody will be able to see if this will be true or not.

      I’m not convinced that there will be a done deal.

      Spyker will be out of money and gone long before 2012. Probably before june 6th 2010!

    • 0 avatar

      @ TriShield – 3/4 of current Audi and BMW owners have no clue GM owned Saab. They don’t know (nor care) what platform their car is built on, much like they don’t care if their Lexus is a “rebadged Camry” or their Audi a “rebadged Volkswagen” (using your own definition of “rebadge”).

      Btw. I am curious to know what’s in your garage/driveway. Not planning on analyzing your choices, as I believe in consumer choice. Just curious.

    • 0 avatar

      I have a Pontiac G8 GXP.

    • 0 avatar

      That’s very nice, one of GM’s best cars in fact.

    • 0 avatar

      @Kroum, I tend to believe your 3/4 statement about most people’s awareness of company ownership and platforms — one survey I saw said that 3/4 of Mercedes owners thought their cars were FWD!

  • avatar
    blue adidas

    I’m very interested in seeing what they are going to do with SAAB. I’ve always loved the cars, but they were always a little out of their league in one way or another.

  • avatar

    With the prolonged constant barrage of Saab’s demise the brand equity is about non-existent. I think it will be very difficult to give potential buyers the confidence that Saab is a viable entity and will be around to provide parts and service for the vehicles. Without that confidence they are going to have a very difficult time selling cars. Saab’s resale value is terrible (at least in the U.S. market) for the same reason. It’s like they’ve got both hands tied behind their backs before they even get out of the starting gate. Sorry to say, I don’t see Saab succeeding in any form.

  • avatar

    Even if they sell 125,000 cars. With 3 models that is little more than 40,000 per vehicle. unless you can charge Porsche prices, how will that make them profitable?
    If Saab would regain its brand equity, would have sophisticated technology… in 10 years they could be like Audi. But how many cars does Audi sell to be profitable again? and Audi has the VW cost advantage.

    I think styling wise any BMW or Mercedes owner of current models (Bangle??) would consider choosing a different brand, but Saab???
    Audis look really good (in muy opinion), why would someone chose Saab over Audi regarding looks?

    • 0 avatar

      Does Saab need to be Porsche-profitable? No. They could build a viable business model on a tenth of Porsche’s profit per car. Unlike Porsche, Saab has no plans to control the world.

      I love Audi’s styling, too, although in my opinion it peaked with the S5. They have since started to get overdone and lost a little of that crisp, handsome looks. Styling is always a personal thing.

    • 0 avatar

      Kroum: they don’t need to be profitable as Porsche (profitable at all would be progress already)… but with small volume you need to charge higher prices, which you only can if you have a Porsche type brand or product. I guess I meant more Porsche prices, than profit. and they are not near being able to charge that.

      They are just too small and their products are not special enough to survive as small manufacturer. 5 mio cars a year to survive is the number… how does 125,000 be even close? And even (profitable) Porsche needed to go under the VW umbrella.

  • avatar

    Right now, only Hyundai has the clout to be taken seriously for setting such optimistic goals.

    Perhaps Spyker can right a long-standing wrong and offer a 10-year warranty for it’s newly-acquired former GM brand. That’s a start…

  • avatar

    “Muller refuses to reveal who exactly is behind the fund, telling Reuters that a confidentiality agreement prevents such disclosure.”

    And Vinny “No Nose” Spilatro is very serious about that confidentiality. He don’t like nobody sticking dere noses inta his bidness.

  • avatar

    As long as Muller is working to line up the $1 billion in funding, the forecast is for hype on steroids. At a minimum, he has to provide sound bites that give political cover to the bureaucrats who will approve state subsidies.

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