Analysts and industry observers alike appear united in their views on Dutch luxury sportscar maker Spyker becoming the unlikely winner of the Saab auction, saying it is likely to struggle with the big challenge of converting two loss-making companies into one profitable entity.
Saab Spyker Automobiles NV faces huge challenges – persistent losses, outdated designs, high labour costs, declining sales and, perhaps above all, little belief in the industry that it can pull off a turnaround, Reuters noted.
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Among the comments the news agency heard was this from IHS Global Insight analyst Ian Fletcher: “It seems like a gamble. They’ve got the new 9-5, the 9-4X coming out next and the new 9-3 should be coming out in 2012, which could be quite lucrative, but whether they can attract customers back to the brand and make it profitable again is the billion-dollar question.
“They’ve just shed customers over the last couple of years. It’s not exactly been great publicity – the winding down process.”
Fiat CEO Sergio Marchionne was characteristically direct: “Marginal players will continue to be marginalised. We cannot build it on hopes and dreams.”
Saab lost EUR400m last year and others in the industry have raised doubts about Spyker’s ability to finance the company long enough to design new cars and turn around its fortunes.
But Spyker’s CEO Victor Muller said in an interview with Reuters on Wednesday the company “absolutely” had the financing to bridge a three-year development cycle for new Saab models.
He also denied reports that Spyker would draw on some of the EUR400bn EIB loan, likely to be guaranteed by the Swedish government, saying all of it would go directly into Saab. He has also arranged an additional EUR150bn loan facility with an investment group.
Spyker itself has not been profitable since restarting in 2000 and the value of its shares is also an open question for the market, Reuters noted. The stock rose as much as 74% at one point on Wednesday, up 240% since its most recent lows in October, but had settled to just under 50% up at 13:10GMT.
“It’s clearly a stock traded by private investors who like the story,” one trader said. “I don’t think it’s held in any stock portfolios.”
