#BAIC

When “Beijing’s car industry” (read: BAIC) put forward the suggestion to exempt EVs from the license plate lottery, and when that suggestion was adopted, those in the know said: “Great idea, bad timing.” Why? There are no EVs one can buy in Beijing.“Beijing’s car industry” (read: BAIC) is about to change that.

When we reported last month that a strange assortment of Indian and Chinese truck builders is after the Italian design house and coach builder Pininfarina, we asked what you probably thought: “What do all these truck makers want to do with a company that designed Ferraris?” Now there’s a Chinese company that can put a hot design house to better use: Beijing’s BAIC.

So who will be he big Chinese EV producer when the Chinese start buying EVs in earnest? It more and more doesn’t look like BYD. It could be staid old BAIC, Beijing’s partner of Hyundai and Mercedes.

I had a beer and a pizza yesterday night with Ash Sutcliffe of China Car Times (us expat car bloggers need to stick together) and he swore on a stack of bibles that he had seen the resurrection of the Chrysler Sebring over at Beijing Auto. But it won’t be a Sebring.

Ah, there’s nothing like a good old Chinese catfight over a foreign joint venture partner. Daimler’s Chinese partner BAIC (they build the E-Class and C-Class in Beijing) became increasingly green-eyed watching Daimler playing footsie with up-start BYD. Now, BAIC is throwing a fit.

Gasgoo says that BAIC might withdraw from or delay its planned acquisition of Fujian Daimler, and this could frustrate Daimler’s partnership with BYD. Why is that?

Wondered what BAIC will do with the used tooling and blueprints it has bought from Saab at the fire sale price of only $200m? BAIC has big plans, and big pockets.

Xu Heyi, chairman of BAIC group, told China Daily that the company will spend some $5b over the next three years to develop three to four passenger car models and two to three turbocharged engines based on the acquired Saab technology.

BAIC will revive their “Beijing” brand which was born in 1958, but abandoned soon thereafter. Beijing’s initial lineup will include a mid-sized hatchback, a notchback, a compact hatchback and a CUV. The cars will be made at 150,000 unit plant in Beijing. Construction will start in February.

GM netted a paltry $200m for the Saab technology it sold to China’s BAIC. So said BAIC to Reuters today, while desperately trying to keep a straight face. The money bought BAIC the rights to three vehicle platforms, two engine technologies and two transmission systems. A pittance, given the fact that developing a new car typically costs from $1b on upwards these days.

Granted, the IP for the 9-5 and 9-3, and the tooling to make them are not the newest, but you can trust BAIC to make the most of it. Interestingly, BAIC got what they desperately needed:

Bård Eker has given an open-hearted interview to Norwegian newspaper Aftenposten, referred here at e24.no telling his version on the failed Saab-deal. Eker was one of the investors in the Koenigsegg Group’s bid for Saab, through his company, Eker Group – 49% owner of Koenigsegg Automotive. Here is his hindsight on the deal:

“General Motors made it very hard to buy Saab”, he says. “Saab wasn’t structured as a subordinate, it was completely swallowed into the massive GM body. And while you can remove a lung from a body, you can’t remove all the veins. And GM had not done the required separating job prior to starting negotiations with interested buyers. That was a contributing cause why things took longer time for us too”.

Sweden’s prime minister Fredrik Reinfeldt had his fill of failed negotiations. Returning home from round-the-clock talks at the Copenhagen climate conference, he said that he saw the Saab collapse coming. Sweden’s prime minister is “unsurprised” by the collapse of the sale, says Reuters. Asked if he was surprised, Reinfeldt said: “No, the process was built around a loss-making company and an American owner that owned Saab for 20 years and made a profit in one of the 20. It’s clear that it was not successful enough.” Sweden’s head blames GM for the failure.

GM’s CEO and Chairman Ed Whitacre confirmed today that Dutch boutique sportscar firm Spyker is the only bidder for what’s left of Saab after the BAIC deal. Saab insiders insist that the firm can continue without the old tooling and technology sold to BAIC, and they still have their hopes pinned on the new 9-5 model. But, as the WSJ reports, Spyker earned a mere €7.9m in 2008 revenue, and has already endured an €8.7m net loss in the first half of this year. Spyker’s in no position to be saving struggling Swedish automakers. But behind Spyker is Convers Group, a Russian banking group with deep pockets… and a uniquely Russian reputation.

With the intellectual property and tooling for 9-5 and 9-3 models headed for Beijing, there’s less to Saab than ever. Sort of. The BAIC deal actually proved to be less dramatic than previously thought, netting the Swedish GM subsidiary a mere $197m according to Automotive News [sub]. BAIC had just obtained a $2.93b line of credit with Bank of China, so there was nothing stopping them from buying more… except GM’s unwillingness to hand over modern platforms. What BAIC did get out of the deal still isn’t entirely clear, but what is clear is that GM has received nothing from the Saab sale so far. That $197m was deposited into Saab’s Swedish account, according to sources speaking to di.se.

It’s pretty much as clear as it can possibly be that China’s BAIC will cart off the used tooling of the 9-5 and 9-3 models, and possibly others to Beijing, and then that’s the end of Trollhättan and Saab, Reuters reports.

Other assets of the brand, including its headquarters will be liquidated, more than 3,000 Saab jobs in Sweden will go bye-bye. The Saab car brand will be retired.

A few days ago I captured some news from Swedish Aftonbladet.se that Beijing Auto (BAIC) is buying Saab’s now to be replaced 9-5 technology. Even though the Koenigsegg-Saab deal fell apart, and BAIC were a part of the investor group, the Chinese has not given up the idea to build Saabs in China. At the time I couldn’t find any other reports on this, and wondered wether Aftonbladet had done some creative journalism, but yesterday, Nyteknik.se reported the same news, citing their own sources. They’ve even confronted Saab’s spokesperson Gunilla Gustavs, but of course she can not, will not comment on that.