Chinese carmakers to buy Saab

Two Chinese auto companies plan to buy Sweden’s Saab Automobile, inject the company with cash and cut 15% of the workforce, MarketWatch reported. Pang Da Automobile Trade and Zhejiang Youngman Lotus Automobile signed a memorandum of understanding to buy Saab for EUR100 million (US$139.34 million) that is valid until November 15. Pang Da and Youngman would invest RMB20 billion (US$3.15 billion) in Saab, cut costs by US$156.7 million and layoff 500 workers. The deal will give Saab the liquidity needed to restructure and promote new car models. The new-owners-to-be hope to sell 35,000-55,000 cars next year and 185,000 to 205,000 by 2016. The plan proposes moving some production to China but vehicle design will remain in Sweden. Saab has lost money for decades, first under GM and then under Swedish Automobile. The automaker halted production and sought court protection from creditors earlier this year, after missing sales projections.