a MINI by SAAB? - Mini Mania Inc.

a MINI by SAAB?

Saab is lining up an audacious bid to buy the rights to the outgoing BMW Mini platform, according to sources.

The struggling Swedish car maker is keen to secure the rights to a small-car platform that would allow it to compete in the booming market for premium compact cars, defined by the Mini itself and new models such as the Audi A1.

After securing a deal to buy Mini’s 1.6-litre turbo engine, Saab bosses are said to have their eye on the current Mini platform. BMW will begin to phase out the current Mini R56-generation platform in late 2012, when the all-new Mini 3, codenamed F56, is launched.

The Mini 3 is based on a new front-drive platform developed by BMW in Munich. It will also be used for BMW’s own Audi A1-rivalling small car.

One source suggests that in 2013 BMW’s Oxford plant will be re-equipped with the new production line to build the Mini 3. Saab would then be able to use the R56 for its own 9-1.

Despite these ambitious plans, Saab continues to struggle with its survival. Production of the 9-3 and 9-5 has been halted twice in recent weeks, with suppliers alleging that they have not received payment from Saab.

Spyker Cars, the Dutch parent company of Saab, says that it is continuing its search for ‘short and medium term funding’ after a suspension of some component deliveries last week halted Saab’s production line.

‘Spyker and Saab Automobile are currently in discussion with several parties to secure additional short and medium term funding for Saab Automobile’ Spyker said in an official statement.

‘The Swedish National Debt Office (NDO) has been requested to release its pledge in the shares of Saab Automobile Property AB in order to enable Saab Automobile to use this property to secure further funding. This is one of the funding scenarios Saab Automobile is currently working on.’

‘The outcome of the discussions is still not certain and subject to the release of the NDO. Spyker expects to be able to come with more details before Thursday 14 April 2011. With additional funding in place to resolve outstanding payment issues with its suppliers Saab Automobile expects it will be able to resume normal production within a week from the receipt of funds.’

Spyker says it needs the extra funding to allow it to re-start production as well as ‘realise’ its 2011 business plan, which includes the imminent launch of the 9-5 SportCombi estate and the GM-sourced 9-4X SUV.

It seems that sales of the new 9-5 and existing 9-3 range are not generating enough cash to pay suppliers and the expected start-up and launch costs of the 9-5 Sport Combi and 9-4X.

Crucially, the 9-5 estate is very important for EU sales and the 9-4X equally essential in the crossover-dominated US market. Saab’s financial position would probably improve significantly once these models are on sale.

However, until the two cars are launched, Saab is in the catch-22 situation that it will not generate enough cash from existing new car sales. Ironically, Saab has, though, got the funding for the development of the new generation 9-3 and the new corporate Phoenix platform.

This funding comes from a £350m European Investment Bank loan, around half of which has already been spent. However, Saab needs to survive on a day-to-day basis until next Autumn, when the new 9-3 is expected to arrive in showrooms.