Koenigsegg's dramatic decision to forego the takeover of Saab leaves the company's future in a serious limbo. Despite having done the initial formalities in June, Koenigsegg couldn't seem to get the Swedish government to act as a guarantor for a 400 million euro loan from the European Investment Bank to help the company tide over its crisis and get the all-new Saab 9-5 off the assembly line and on to showroom floors.
When Koenigsegg was announced as the winning bidder back in June, everything seemed to be out of a fairy tale book. The 17-cars-a-year company was buying out a 1,00,000-cars-a-year operation. Christian Von Koenigsegg soon put up a string of individuals and companies together that represented Koenigsegg AB. Beijing Automotive even picked up a stake in Koenigsegg and showed interest in acquiring the tooling for the outgoing Saab 9-5 and assembling it in China. But with Koenigsegg's and GM's joint announcement over the week that the former was pulling out of the deal, Saab, as we know it, is walking perilously close towards an early sunset.
What this means is, Saab, its employees and dealers could be without jobs and business by the end of December, unless GM manage to find a last minute buyer. GM had indicated that if it weren't for Koenigsegg, the firm would have wound up Saab's operations by the end of the year. That prospect has now re-emerged and it looks like there won't be any buyers who could walk into the ring at such a short notice.
There are market speculations that Beijing Auto could try on its own, but only after the company has wound down operations. Currently, the mood in Europe is averse to such a move, as was evident in the MG Rover case and recently in another high-profile near sell out of GM's Opel division. That pretty much leaves the job to one of the larger European car making conglomerates, of whom none want to have anything to do with Saab. VW is busy tying up Porsche and both the large French car makers - PSA and Renault-Nissan are busy trying to walk back into the black.
That pretty much leaves only one company that hasn't even been in the picture - M&M. This might sound strange, but if you look closely, M&M could gain on a couple of fronts. With its deal with Renault on the Logan looking dicey, Mahindra could find itself with a ready passenger car portfolio, that too in the luxury category. Add the fact that Saab has credible crossover platforms that have been developed and M&M could leverage those learnings and expand its own portfolio of future SUVs/crossovers. One key platform that could benefit from this takeover is its world SUV. It also gives Mahindra a grip in the European market, one which it really hasn't managed to make deep inroads into the automotive space, unlike the North and South America, while also giving them a strong manufacturing base. Besides, M&M has the ability to raise money from the markets and make a serious go at it, simply because of the goodwill that M&M now enjoys on a larger, global scale.
If I were Anand Mahindra, I'd make that call to Sweden right now! An attempt, however small, could signal a much bigger change.
