Chinese-built cars destined for U.S., Saab chairman says
Saab Chairman Victor Muller: "We will not be laughing when the Chinese come. The Chinese are like a steamroller.”
WASHINGTON D.C. -- A Chinese automaker could be selling cars in the United States and Europe priced as low as $10,000 in two or three years using an established distributor such as Saab, the Swedish automaker's chairman said.
"We laughed when the Japanese came," said Victor Muller, chairman of Saab Automobile AB. "We laughed when the Koreans came. But we will not be laughing when the Chinese come. The Chinese are like a steamroller."
Last week Spyker Cars, which owns Saab, signed an agreement with China's Hawtai Motor Group to form a joint venture that includes technology, manufacturing and distribution in China.
Muller stopped short of saying Saab will distribute Hawtai's vehicles in the United States, Europe and elsewhere. But he said Saab's global distribution network will be tempting for Hawtai. If an agreement is approved, the vehicle line would be distributed separately from Saab under the Chinese automaker's name.
Major asset: Dealers
"It took 67 years to build up our dealer network. It is the biggest asset not on our asset sheet, and these guys buy into it for free," said Muller, who was interviewed during a press event in Washington, D.C.
"If they make the proper cars, can you image how much simpler it will be to push product through the distribution network that is already there? It is like a railway network that is already there."
Muller said that it is possible Saab could be the distributor for a Chinese-built vehicle that sells for around $10,000.
Asked if this would be a vehicle produced by Hawtai, Muller said "there are 120 companies" in China. Saab would be interested in "the one with a strategy," he said.
Muller said the first Chinese cars sold here likely would not receive a 5-star safety rating. But he expects a low price would attract buyers.
In China "you can get a $10,000 SUV with air conditioning and electric windows, everything that was ever invented for a car. Do you really worry about a five-star (crash rating)? They look good," he said.
The agreement with Hawtai provides 150 million euros, or about $215.5 million, in funding for Saab. Hawtai is investing 120 million euros for a 29.9 percent stake in Spyker. The remaining 30 million euros is a loan to Spyker.
Hawtai is a small privately owned maker of SUVs and buses that was established in 2000. The company produced just over 81,000 units last year, according to J.D. Power. Hawtai began building its first sedan late last year.
Chinese automakers Chery, BYD and others have announced intentions to market vehicles in the United States, but those plans have been delayed or scrapped by the recent recession, regulatory hurdles and other market barriers, such as the high cost of establishing a retail channel.
Separately, a Saab spokesman said the automaker was hoping to restart production in Sweden next week. Saab halted production in April because it was unable to pay suppliers. It is in the process of securing investments and loans.