China’s National Development and Reform Comission warns Pangda
China’s National Development and Reform Commission (NDRC), the country’s top economic planning body, held a small meeting on May 18 with Pangda Group, just two days after Pangda’s inked a deal with Saab. The key attendees of the meeting were companies close to the Saab deal, but one person who was included in the deal, but did not wish to state his name was quoted by the press as saying:”The meeting was held yesterday, I can’t tell you who was involved but I am certain you can guess. The main goal of the meeting was to point out that Pangda should not be overly competitive behind the backs of other companies, they need to communicate more. ”
The NDRC’s are hoping that the Chinese car industry will see further development through buyouts of foreign technology, at the same they are hoping that this plan will avoid economic losses by pushing Chinese companies to buy sinking ships.
The government started to intervene only half a month after Saab’s deal with Hawtai was exposed, one of the major reasons speculated in the media seems to be the failure of the Saab-Hawtai deal which did embarrass the Chinese leadership.
An unspecified international consultant has also been commenting on the Saab issue, which could see Pangda signing up with another company to produce Saab’s in China “China doesn’t allow one car company to partner with two at the same time. Previously we saw what happened when MG-Rover was talking with two companies, later SAIC and NAC were forced to merge. Now it appears that a car dealership group are planning to enter the international mergers and acquisitions arena, the Chinese government are likely to get involved in someway”
Saab broke up with Hawtai in only nine days, and then tied up with Pangda. Beijing Auto is also nervous as it acquired Saab’s products and technologies two years ago. Great Wall and Youngman Automobile are both rumored in talks with Saab. Each of these companies can be the key role of the Saab mess suddenly.
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It appears that Saab & Youngman signed an agreement to enter into exclusive negotiations. Shortly after, Saab signed a MOU with Pang Da, which they thought was legal because Pang Da is not an automaker. However, part of the MOU mentioned a future JV to build cars in China with an unidentified third party. It’s clear that many things still need to be sorted out. I wish the NRDC the best of luck trying to handle this mess.
For the tenacious, no road is impassable
通過頑強的道路走
For the tenacious, no road is impassable
通過頑強的道路走
The NDRC need to join the real world and realise that not every JV or business cooperation is going to be successful. If Pangda’s deal fell through due to NDRC interfering then that could give other foreign manufacturers cold feet about looking for deals outside the traditional industry.
Pangda should actually be encouraged to give it a shot because their approach is very innovative, something which we are not used to seeing from Chinese companies. If they fail then the lessons will have been learnt but they seem to be strong enough to ride through it and would bounce back rather unscathed.