SAIC to purchase Buick? Rumor mill in overdrive
Rumors regarding the possible purchasing of Buick by SAIC have been going around since the probability of GM going bankrupt started early last year.
Various media outlets are linking SAIC to the possible purchase of either Buick or Saturn. The potential Buick purchase is linked to the brand only, which which give SAIC the rights to use the Buick brand in China on any car they see fit. Seeing as SAIC already have the MG, and have spent a lot of money on developing the Roewe brand, we cant see a purchase of the branding alone being a gigantic benefit for SAIC, although Buick sales in China are still very strong.
SAIC has also been linked to a purchase of the Saturn dealership network in North America. This would give SAIC a ready made dealership network covering the USA, for a potentially very low price. But do SAIC have cars that they can deliver to Saturn straight away? The answer to that is likely to be a firm no, but the MG brand is growing outwards, could we see the first MG hit American shores in 2010 via Saturn dealerships? Maybe, but probably not.
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@IHC:
Given GM’s current situation, I don’t think they have that much leverage. I think the Obama administration would actually endorse such a sale. They demanded GM to reduce its number of brands; and likely they will keep the ones profitable in the US market: Chevrolet, GMC and Cadillac. All others must go.
@charlie:
3. Actually not, the Buick brand has value in China. The Rover name actually belonged to BMW, and they weren’t willing to sell it to SAIC-Nanjing.
5. Opel is struggling to survive; they can’t afford Saturn – another liability.
@ charlie
> 1. Saturn dealers aren’t covered by franchising agreements; they are in a contract with GM with zero rights on their part.
Read http://www.autoblog.com/tag/Saturn+Distribution+Corporation/ for a better understanding of the relationship between GM, Saturn Distribution Corp, and Saturn dealers.
Saturn was “a different kind of car company” for GM, and its franchise agreement was structured differently from other GM brands, with dealers themselves sitting on the board of Saturn Distribution Corp.
> 2. Buying Saturn and having the current level of sales would be in a year every saturn dealer would close.
Exactly, and this is why Saturn dealers moved quickly to source a competitive full vehicle line up from an alternate Japanese/Korean automaker for Saturn-badged vehicles. They need to start selling cars now, and their chances are better with Japanese/Korean vehicles. Chinese vehicles are not even an option for Saturn dealers at all.
> 3. Selling Buick branding rights to the Chinese would be good but only worth maybe $150 million.
SAIC themselves valued Buick brand at $1 billion. And something like $1 billion bid would entice a bankruptcy court judge to seriously consider Buick brand sale to SAIC in spite of a political pressure, $150 million won’t do.
> 4. Selling GM Daweoo and Saturn as a unit might be interesting. Lots of smal l cheap cars. Chinese could buy that, run the Koreans into the ground, then try to sell chinese made saturns.
Saturn Distribution Corp already has a spin-off plan outlined by its dealers that doesn’t involve Chinese on an immediate term(They need competitive vehicles to sell starting beginning of next year and only ones that could supply such vehicles are previously mentioned Japanese/Korean automakers)
As for GM Daewoo, its primary lending bank(owned by Korean government) already formulated a strategy to take back GM Daewoo. There are three possible scenarios formulated by the government, and two involve a take back in exchange for a liquidity injection. The only way Daewoo would stay as part of GM is if the prepackaged bankruptcy process completes quickly in the US. Otherwise, Korean government will let GM Daewoo fail(Korean government has no bailout policy on all automakers), then package it with Ssangyong and sell them to either Samsung or POSCO, Foreign bidders excluded this time. Korean government, which has been pressuring Samsung to take over Ssangyong at presidential level, is hoping that Samsung with $25 billion in cash might be tempted if Daewoo is thrown in the package to instantly create a 2.1 million cars/year world-class automotive group.
> The most logical buyer for Saturn would be opel
Opel’s facing bankruptcy itself. What are you talking about?
@ Fiziks
> Given GM’s current situation, I don’t think they have that much leverage.
They do, since the goal of Obama administration is to create a viable GM. Obama administration will inject liquidity into New GM so money is not a problem.
> I think the Obama administration would actually endorse such a sale.
Not at all. GM needs Chinese market growth to be viable again. Selling Buick brand to SAIC dooms New GM to failure.
> and likely they will keep the ones profitable in the US market: Chevrolet, GMC and Cadillac. All others must go.
And Buick because of Chinese market. Heck, GM would drop GMC before they touch Buick.
Jeez calm down everyone…! It might never happen!
GM -> MG… They could save a small fortune on re-branding costs… they’d just need to turn all the signs & badges around!
@ fiziks
> 3. Actually not, the Buick brand has value in China. The Rover name actually belonged to BMW, and they weren’t willing to sell it to SAIC-Nanjing.
The Rover name is owned by Land Rover.
SAIC did indeed make an offer to buy it, but when BMW sold Land Rover to Ford it gave them first and last right of refusal over any future sale of the Rover name.
When faced with the very real prospect of SAIC selling Chinese built offroaders badged as Rovers in direct competition to Land Rover, Land Rover (Ford) naturally exercised that right. In other words SAIC never had a chance of buying the Rover name. Land Rover buying it back was always a forgone conclusion.
Isn’t Land Rover now owned by Tata? A company that has had ties with MG Rover in the past? I.e. Cityrover.
I might be wrong!?
Tata may be more willing than it’s predacessors to put the Rover brand up for discussion, given it’s financial difficulties?