Beiqi to Acquire Some of Saab's Non-core Assets to Sign Today

Beijing Automotive Industry Holding Co., Ltd. announced on the 14th that Beijing Automotive Holding Company has completed the purchase of related intellectual property rights with Swedish Saab Automobile Company. Today (December 23), the two parties formally signed a signing ceremony in Beijing. The cash Saab 9-5, 9-3, etc. will officially come to China.

The data shows that after 2000, Saab was mostly in a loss state. In the last three years — 2006, 2007 and 2008, Saab’s losses were 2.9 billion kronor, 2.2 billion kronor and 3 billion kronor respectively. But even then, GM still has reservations about selling Saab to BAIC. Saab's core technology and intellectual property rights are still in the hands of GM. Foreign parties only sell some obsolete platform technologies that have been discontinued to Chinese companies and earn surplus value.

According to informed sources, BAIC may raise funds through the state-owned banks in China. Among the financing projects that have been announced so far, the Bank of China has provided 20 billion yuan (about 2.93 billion U.S. dollars) in loans to BAIC. Previously, Koenigsegg, another related acquirer of Saab Automobile, had set aside about 1 billion U.S. dollars for the restructuring of Saab.

According to previous reports, Beijing Auto Holding’s transaction price for acquiring Saab’s assets was US$197 million. National Securities Auto Industry analyst Cao He believes that the price of nearly 200 million U.S. dollars is a bit high, and it will be more cost-effective if it is around 150 million U.S. dollars. "This is mainly because Beiqi can't wait too much." Cao He believes that compared with SAIC, BAIC's bargain hunters have delayed the fighters.

What did Baic Holding buy from Saab?

The negotiation of the acquisition of Saab Assets by BAIC covers Saab's entire vehicle development system. The major IP transfers include:

1. All relevant and complete technical design specifications, standards and processes (vehicles, systems, components).

2. 9-3, 9-5 BOM, all CAD models and drawings, 9-3 data structure diagram, 9-5 part data structure diagram.

3. Supplier development management system: SOR (system, parts procurement technical specifications, requirements, approval system); PPAP (production parts approval process); P-BOM (parts procurement list); supplier list; .

4. Analysis of all system and component failure modes (may not be complete).

5. Test/preparation plans, processes, and reports that meet design requirements, CAE analysis models, plans, and reports.

6. Vehicle manufacturing system: stamping, welding, painting, assembly process cards; press data; workshop station layout, station equipment, logistics and other documents; model, folder, check list; mold, fixture digital mold, Assembly manual; manufacturing technical requirements; terminal inspection equipment list and testing procedures.

7. Vehicle Quality Management System: Quality Assessment Process and Documentation; GCA Specs (Customer Assessment Standards); Body Builder Review Specification.

The Saab-related assets acquired by BAIC are mainly concentrated on old models and technologies. Saab 9-5, this is a very long life model, from the listing in 1997 to this year, has gone through 12 years, and in early July of this year, Saab has stopped production of 9-5 models. "If there is no market-based breakthrough and selling point, then it (Saab) is likely to become tired." Researcher Zhang Xin believes that Guotai Junan.

In addition, when the previous agreement with the Koenigsegg Group reached a joint acquisition of Saab, Beijing Automotive has said that "will use Saab in the European network to promote their own products." Now, Saab channel is not within the scope of the acquisition of Beijing Automotive, Beijing Auto's acquisition of Saab's The significance is obviously also discounted.

Some industry insiders believe that the reason why GM did not sell some new technologies and brands to BAIC is mainly concerned that BAIC will use it to form a competitive relationship with GM's similar products in China. "Beiqi has obtained Saab new technology and brand, it is very likely to create a model with the new Regal, etc. are in the same market segment, that the new Regal days will be difficult." Car industry renowned analyst Jia Xinguang believes.