Opel and Saab, two of the European auto industry’s heavyweights are on the verge of collapse, now that US-based car manufacturer General Motors cracked up. In Romania, the new car market has significantly nosedived in January: the sales shrank to 8,187 cars, namely 65% fewer cars delivered from prior year period.
Opel and Saab, on the verge of collapse
General Motors’ European brands are on the brink of downfall, with Opel seeking more state funding and Saab’s plea for 590 mln dollars state aid from the Swedish government, Reuters informs.
After filing from protection from creditors, Saab said it would draft a reorganization proposal within three weeks, while the court filings revealed Saab’s expected losses in 2008 and 2009 at roughly 3 billion Czech korunas (340.1 million dollars).
“Saab will draw the reorganization proposals, which will include the concentration of design, engineering and manufacturing activities in Sweden”, reads the press release remitted by the car maker, adding that the reorganization process will last three months and will need independent funding.
Opel, the first European carmaker to seek a government bailout, needs 3.3 bln euros liquidity to hold out amid crisis, according to a company source cited by German media.
Opel representatives, source says, have already returned to Berlin with a bigger request, after a prior solicitation of 1.8 bln euros in guarantees.
Situation can become dramatic in March
The steep depreciation of the situation in the European car industry has determined Opel representatives to estimate 2.5 bln euros loan guarantees aid from Berlin.
A source at the German government said Opel had explained the situation could become dramatic by March, with its liquidity dried out, with the bankruptcy threat looming over the car maker’s balance sheet.
Replying to a news article appeared in Spiegel publication, the first to write about the additional funding plea, General Motors said its second brand after Chevrolet had become a casualty of the market conditions, which had been impossible to forecast in November, such as the steep decline of the pound and ruble, amid dwindling car sales in Spain.
Meanwhile, the Swedish business daily, Dagens Industri said in an article that GM could pump 3.5 bln korunas (397 million dollars) in Saab, if the Swedish Government granted the car manufacturer a loan higher than 5.2 bln korunas.
Saab seeks rescue boats
The legal administrator of Saab will reorganize the brand under a completely different entity, as it seeks for new investor, after the government excluded repeatedly the possibility of nationalizing the carmaker.
The crisis has come at a tough time for Saab as it is scheduled to launch three new models.
The future of 4,500 employees is at stake as well as of thousand of workers working in the company’s retail chain.
Saab’s problems emerged in 1990, when GM acquired half of the company’s shares from Investor AB. The Swedish company sprang from the aircraft manufacturer Svenska Aeroplan AB, established in 1937 and provided war aircrafts to Sweden.
The first Saab automobile was released in 1947.
Sagging sales in Romanian car industry
The new-car sales in Romania fell this year to 8,187 cars in January, 65% fewer cars delivered from a year earlier period, according to data provided by APIA.
7,110 new cars were delivered in January, down 63.9% compared to January 2008.
The sale of commercial vehicles fell by 70.5%, down to 1,019 units, while the bus deliveries shrank 71.6%, down to 58 units.
In January, the car exports dropped by 30.7%, down to 8.943 units.
Car manufacturing and engineering slid 62% last month, down to 9,482 vehicles, of which 8,775 were cars (-63.8%).
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