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Whither the Swedish Auto Industry?

With Saab going to the Chinese, and the Volvo sale going nowhere, prospects are uncertain at best.

by on Oct.26, 2009


The Swedish car industry could collapse before customers return in numbers needed for revival.

As the global Great Recession drags on, with European and North American auto markets languishing, the prospects for the Swedish car industry are challenging.

The industry could collapse before customers return in numbers sufficient for revival.

Swedish new car sales fell 17% in 2008, with a 35% downturn in the final quarter. The forecast for 2009 is for a further a reduction of 27% – about the same decline as in the U.S. market. According to the national Institute of Economic Research, unemployment is expected to rise from 6.1% to 7.9%.



As the Swedish government is no doubt by now painfully aware, about 700 companies in auto related areas support a workforce of close to 140,000 taxpaying job holders.

About 72,000 are employed in vehicle production and the component supply chain. Truck makers Volvo and Scania remain relatively strong in European commercial vehicle production, although they too are wracking up big losses in the Great Recession.


Chinese Government Backs Saab Sale

Beijing Automotive Industry Holdings partners with Koenigsegg.

by on Sep.09, 2009

Quirky Saab styling should fit right in at Beijing Automotive.

Quirky Saab styling should fit right in at BAIC.

Koenigsegg Group AB, the ultra small Swedish sports car maker for the ultra rich, said this morning that Beijing Automotive Industry Holdings Company Ltd would become a partner as it buys Saab from General Motors Company. The new financing announced today was first revealed yesterday by

BAIC, which is controlled by the Chinese Government, will become a minority owner in Koenigsegg Group when the deal is finalized by the end of the year.

The sales still requires that Saab obtain about $580 million in loans from the European Investment Bank and loan guarantees from the Swedish government. The Swedish government confirmed yesterday that it had received the new Saab proposal. It is now studying whether to provide the necessary loan guarantee. It would not comment further. EIB will rule on the loan late in October.

At the core of the matter is whether Saab can become viable under the undisclosed business plan. BAIC would give Saab access to China, the world’s largest auto market.