Car Boss – Buying Saab

With our plans afoot (albeit fictitious), about resurrecting and running SAAB, the Geneva Motor Show in March would be a perfect platform to announce our future plans. In the meantime…..

The Paragon Automotive board have already been reading through documents that detail the buy-out offer for SAAB. Our first plan is to pay the 100 million euro purchase price which initially secures a percentage of SAAB holdings. The other is to meet with General Motors to see what holding share they are still willing to negotiate. As they hold the key to the technology rights, we need to work out on how to move forward and a partnership with GM seems like the most logical plan. Starting over again with SAAB would require a 200 million euro investment as well as research and development costs and factory tooling. Improving and replacing the current SAAB model range would need a technology sharing partner and GM seems to be our best option. We also need to invest a further 10 million euros which will pay off the debts to the suppliers and re-employment of the factory staff.

Another issue on the agenda is our global dealer network. We understand that 30% are already preparing to terminate their contracts. And with a downturn in aftersales business, customers are switching to independent repairers. Used car values have also dropped. With new and used car registrations down globally for the middle quarter of 2011, customers are very reluctant to commit to the brand. Confidence needs to be restored and the Paragon board are due to meet shortly to put the dealer network plans and parts supplies into place.

A recruitment drive is also planned to be launched once the purchase of the company has been finalised. Likely candidates have initially paid a visit to our global head quarters and an announcement will be made in due course.

Looking ahead for an immediate plan, we are investigating a revival of the 9-4X SUV. With production short lived at the beginning of 2011, the mid-SUV is still an extremely positive market share, albeit a competitive one for any potential manufacturer, and tooling the 9-4X for Europe would only require a small investment. Still using GM’s plant in Ramos, Mexico, would save finding any new manufacturing facility. Generating brand awareness and interest into a new SAAB model would be at least two years away, where as tooling the 9-4X for Europe would only require a 6-8 month turnaround. With plenty of engine choices in the GM family, a diesel version for Europe could be developed if plans are given the green light.

Our next port of call is to fly over to Sweden and finalise a deal with the receivers and the General Motors board. Spending 100 million euro’s is the easy part. It’s the decisions, boardroom meetings and further partnerships and plans that will we will need to overcome. Interesting times ahead.