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The future of Saab will be decided within weeks, and in an extremely complex global situation. Demand for cars probably will be much lower than in the past for some years to come, with inevitable overcapacity and price wars as consequence. The mother company, that Saab on a technology as well as on a part supply base will depend on for years to come, might get into chapter 11 itself, and Opel/GM Europe's future is not clear as well. Why in such a situation a serious investor should consider taking over? The arguments are relatively simple. For the first time since years, Saab will have a new and comprehensive product line-up, with competitive products in several market segments ((9-3, 9-5, 9-4, xwd, diesels, engines, quality) . The horrendously expansive development costs are sunk costs for GM, and the buyer will benefit from a cash flow in visible future. The only models to be developed in future refer to a successor for the 9-3, where the platorm exists or is in planning, and for engines with lower fuel consumption. There will be necessary investments to transfer production back to Sweden. Production costs should be very low, as Sweden with the weak korona offers a competitive edge over the Eurozone, and Saab has had considerable restructuring. Necessary condition is the transfer pricing for GM parts, which should not include development costs. Once on its own, Saab in fact should be able to sharply undercut German carmaker prices for the same or better quality, and should be able to gain market share easily, and yet be highly profitable. Saabs biggest weakness is marketing/sales/distribution network, which is tied to GM operation and does not have a similar own independent distribution network as Volvo. A potential buyer must be sure, that Saabs necessary GM dependencies offer a certainty also under conditions of a chapter 11 bankruptcy for GM. A buyer should add two things - financial muscles as well as adding to distribution network and investments into marketing. Access to car financing is also a requirement. But most important will be management capacity, as a road to independence in such chaotic and uncertain circumstances requires a high and experienced management. If you think about this, very few buyers potentially will fit, mostly mass carmakers, that never were able to diversify into the premium segment. Against these huge uncertainties, only a strong state guarantee for the transition period of 3-5 years will incentive a potential buyer. Either the Swedish government better defines its industrial policy both from a financial and a management perspective, or Saab will be gone.
posted by 92.106.6...
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