New Saab owner looks to rev up pace on production line

SPYKER, the tiny Dutch sportscar maker, is looking to ramp up production at its newly-acquired Saab business by almost a fifth as it takes on the challenge of steering it back to the black.

The firm, which spent some $400 million (270m) buying the iconic Swedish brand last month, expects to increase its output by about 18 per cent this year.

Spyker also said yesterday that a final payment of 24m (22m) to General Motors for Saab due this summer would probably be paid out of its own funds "without attracting outside funding".

Saab plans to sell 50,000 to 60,000 Saab cars this year, its new owner said. The Swedish carmaker sold 39,903 cars in 2009 and 93,295 in 2008. Analysts have said Spyker must sell at least 75,000 cars per year to be cash flow positive.

The Dutch firm has put Saab on an ambitious turnaround path but neither business has made any money in the last decade.

Spyker reported a net loss of 22.9m in 2009, compared with a loss of 24.8m a year earlier. It only produced 31 of its exotic 200,000 sportscars, down from 43 in 2008.

Spyker chief executive Victor Muller, a hard-charging former fashion executive and mergers and acquisitions lawyer, has vowed the group will be profitable in 2012.

"Many people ask us why Spyker thinks that it can make Saab profitable by 2012, when Saab was perceived to be losing money under GM's stewardship for almost two decades," Muller said.

He argued that many of Saab's profitable activities were not reflected in its operational accounting when it was part of the US car giant, and it "did not lose money in all of those years".

Muller and Saab's management are betting that a complete renewal of Saab's model range will help it return to full profitability and eventually reach 125,000 units in annual car sales.

Saab, which will be run as a separate standalone company, will focus on three to four models, including the 9-3 and the new 9-5 based on an Opel platform.

Spyker has said its has sufficient financing – some $1 billion – to develop new Saab models. Saab aims to keep its operations afloat with its $200m in the bank, a 400m European Investment Bank loan and the preference shares issued to GM – which carry hefty dividend payments of 6 per cent from 2012 and 12 per cent from 2014.

Saab also has a 150m credit facility, but analysts have suggested that Spyker may still tap new investors for cash.

Muller told shareholders in February that he would seek to list Spyker shares in London and Stockholm, and possibly delist from Amsterdam. Asked then whether that would make it easier to raise cash, Muller said the goal was "to be closer to investors".