Mahindra no longer interested?

Despite yesterday’s relatively good news, it seems really hard for the troubled car maker in Trollhättan to get to a Happy Ending. Just when there were some shimmers of light at the end of the tunnel (exit of the reorganisation), rumours about Mahindra no longer being interested pop up in the media. Supposedly Mahindra lost interest in November already(!)

Is Mahindra still in the race of becoming the new majority owner?
Is Mahindra still in the race of becoming the new majority owner?

Lost interest in November over SAAB AB?
Today’s article in Swedish daily SVD is stirring up the pot pretty fiercely in stating that Mahindra supposedly lost interest in November already, yet signed the letter of intent to become majority owner in NEVS anyway that was later to be used as one of the key pieces of collateral in Court by the Administrator at the time of the application for the first extension on 2 December.
The author Jonas Fröberg quotes „a source in the consultancy sphere“ (i.e. someone who allegedly has been part of the group of advisors around the reorganisation) and also adds that SAAB AB had been informed by Mahindra about the situation and their intents around that same time.
The theory that Fröberg lays out is that (one of) the key reason(s) that Mahindra lost interest was because of the issues in the negotiations with SAAB AB around the trademark license.

Why?
The article has some quite harsh statements and I want to highlight two of them specifically:
SAAB AB was tired to give away the trademark for free only to receive bad press for it in return. That is why SAAB AB wanted to get paid for the trademark license and that was when Mahindra realised that their business case wouldn’t hold. The risk exposure became to big and they wanted to get the trademark license for free, and that’s where the discussions died in November.“ When I read this sentence, I had to read a few times again. Why would anyone expect to be able to license a trademark for free? I don’t have insight into the current and previous license agreements, but that seems like a really unlikely scenario, let alone the single most important reason for the deal to collapse.
„…Mahindra had a few weeks earlier -in mid November- cancelled the trademark negotiations with SAAB AB. Mahindra then, as confirmed by the Administrator, signed a non-binding contract at the end of November. But Mahindra had -according to the source- no intentions to buy NEVS and only did it to provide NEVS more time to find new solutions.“ This again sounds unlikely. Assuming for a moment that the negotiations had indeed been cancelled, why on earth would Mahindra state something they clearly weren’t intending on a paper that was going to be used in Court and why would the Administrator clearly and explicitly in both extension applications confirm the progress on the negotiations? I am not a legal expert but if what the article states is true, the recent actions from Mahindra, the Administrator and NEVS are punishable by law.

So most of the time, where there is smoke there is fire. The fact alone that NEVS doesn’t have a signed contract with secured long-term funding in place yet isn’t a reason necessarily to worry or get suspicious in my view. International mergers and acquisitions generally do take considerable time so that’s not it. There does seem to be something around the so essential trademark license though that doesn’t add up and there may be other areas where stated intent and reality differ.
SAAB AB declined to comment on the SVD article (I guess they have their hands full dealing with the crisis the Swedish government caused earlier this week in canceling a contract with Saudi Arabia, but this is off-topic), yet NEVS‘ Mikael Östlund was clear in stating  „I don’t comment on rumours, but the negotiations with the two vehicle manufacturers are ongoing“.
I think we’ll have to leave it at that. At least for now…

Update 13 March: the quoted article was first published yesterday around 06:30 CET on SVD.se. The story subsequently didn’t appear in the printed edition of the newspaper today. This to me is highly unusual given the scope and weigth of the online article and reason for more question marks in line with Swade’s comments. Someone is obviously not telling the truth and that should be stopped, now.

23 Gedanken zu „Mahindra no longer interested?

  • I would not be surprised if this is the case. Mahindra has long left the negotiations on the fate of the plant and all those interested in the fate of Saab – „led by the nose.“ As it was when Victor Muller, as was the case NEVS. As it is now. Once the money for salaries „effective crisis manager“ run out, so once all the cards will be opened and the factory finally closed forever.

    • Who knows, Andys. I think you’re being overly skeptical and pessimistic as I am convinced that both Spyker then and NEVS now entered their adventures with the right intentions. Whether these good intentions can translate into a long-lasting successful SAAB cars business is something that is dependent on so many more factors (the Stallbacka plant itself is actually broadly considered as in very good condition, so is rather an asset rather than a reason for Mahindra to feel „cheated“ as you’re essentially are saying).

      • As you said in the article – „there is no smoke without fire“ and I totally agree with that.

  • The newspapers do everything to sell their news, of course they have a new buyer for Saab automobile otherwise they would not have got an extention. But it can be another one than Mahindra.

    • At the end of the day that would be the goal for all commercial newspapers, John. Having said that, the author of this article is generally highly regarded in Sweden and was tightly following the developments when Spkyer took over SAAB Automobile AB from GM (he actually wrote a decent book about it, „Kampen om SAAB“). Having said that, he confirmed to me some time ago not to be equally close to NEVS.
      I agree with you that it would seem really unrealistic to believe that the Court would agree to a prolongation of the reorganisation without serious buyers. If anything I do hope that the SVD article triggers some more openness about what actually is going on from the Administrator, NEVS and SAAB AB’s side (not to mention Mahindra and Dongfeng…).

  • Have we not all been just interested that the cars built in Trollhattan are SAAB cars?
    In my opinion that now will not happen again; Saab AB will not give for free the license for the name anymore; and they are damned right to not give that for free. Mahindra, not willing to consider to pay a license fee for the brand name SAAB, might so only be interested in negotiating a production facility where they can built their own cars.
    That would of course be good news for the employment in that area.
    However for me that would only mean to support further the Saab Museum but unfortunately I could never purchase a brand new Saab anymore.
    Reason more to look good after the Saabs we now still drive.
    So let the parts business continue forever.

    • I guess you’re right in that the readers of this blog would want to see nothing less than new cars carrying the SAAB brand name leaving the Trollhättan factory, Kochje!
      On your point around the license fee- there may be other reasons why there is no agreement on the license but I sincerely doubt it why any commercial license owner would grant the trademark right to other parties for free so the statement that „Mahindra wants to get the trademark license for free“ I really don’t believe in.

      • Might be an excuse from Mahindra to withdrew from the negotiations?

  • Trollhättan rumor mill…
    everywhere i read that NEVS wants a new investor. Does anyone know if its an option for them to sell what they have?
    Because that could be a big point in that negotiations!

  • I ancest bad things. When NEVS wants to obtain production orders they have to EXIT the reconstruction. For winning tenders from suppliers / design Offices you need to be „debt-free“. It is no longer a topic to redesign of SAAB cars. This fits well with the statement of SAAB AB that they have no discussions about the name. I hope i am not right. But I Think it is all about Plan B.

    • Maybe, maybe not. Either way it is in everyone’s interest for NEVS to exit reorganisation. Whether „Plan B“ will become the main strategy we’ll only know in a few weeks from now. Until then, it is paramount that today’s allegations are being verified to confirm who is telling the truth and who isn’t as clearly the story doesn’t add up and only creates more FUD ahead of the March 23 meeting.

      • Just read in the News papers that Audi (VW Group) wants to become more successful as BMW and therefore looks at expanding their production capacity. Audi seems to be developing new additional models. Interesting discussion partner for NEVS’s plan B?

        • Can’t believe that. Some days ago, VW officially said that they have enough brands in the concern to manage. They are building new plants all over the world or invest in existing ones. Can’t imagine that VW Group uses third party manufacturers (in Europe!)
          While thinking about Plan B rather the BMW Group is in my head. In addition, they have less brands in the concern than VW and are looking forward to get more market share. Maybe they need a new brand for that? So maybe Plan B is an option for them AND the ‚(geographical) short distance‘ to the SAAB AB for name rights. Its my best wish 😉

  • If the Saab name licencing is such an issue, I would assume that potential buyers will now be in a category that they don’t need the name. Which will probably mean that they got one of their own 🙂

    BMW for example is a resputable brand. It is just that I believe that they have already solved their capacity issues for the production of the „Mini“. So, they don’t need another assembly plant. Nor am I aware of any other manufacturer. Maybe Maserati? I think they want to expand their volume with a smaller sedan.

    Or, and here my rumors mill turns again ;-), Apple. In that case, we will get no information whatsoever, until Apple Car is released.

    • That could indeed be a scenario, but so far we don’t actually know for a fact what the apparent problems with the SAAB trademark are (and whether or not they may have led to Mahindra backing off).
      What you’re painting Thylmuc is more or or less the „Plan B“ strategy and there are a few other examples in the world of companies who have this as their main (e.g. Valmet, NedCar, Magna Steyr) or secondairy (e.g. Mercedes) business.

      • Right. Hopefuly, those rumored 1000 engineers working at Apple at the car project are compatible with those hundreds in Trollhättan, so that there can be some Saab influence in the final product; if that is indeed under discussion.

        If it is Saaby enough, I don’t care too much for the logo it caries.

        • First of all this is wishful thinking.

          They have enough fanboys and fangirls out there and everywhere. Aplle is not going to produce cars for a certain market but is going to flood the entire world with it.

          Trollhättan does not have a third of the capacity apple will need.
          And they don’t care about Sweden at all. A link to (a swedish) tradition in technology and design is probably even unacceptable and pretty much the exact opposite of what they have in mind.

          Apple is all about revenue far beyond common sense. Designed in California (and made in China) is what the iCar will be.

          And secondly someones dream might be another’s nightmare …

          Don’t get me wrong, I use many of apple’s products myself (phone, book, pro, screens). Still an apple on wheels is as little my cup of tea as an apple watch on my wrist or an apple sticker at the rear of my SAAB. There is a limit to everything.

  • If Mahindra really was interested since such a long time at some point they should have reached a decission to not waste managment resources for endless time. So if the court lets the process go on there is some small hope something else is going on.

  • The message of the SVD is no surprise. Mahindra was just a distraction.

  • Who knows … business and company take-over are sometimes strange, cruel …. buyers are waiting or forcing companies to get weaker and weaker!!

    Cheapest way to buy … assets from NEVS … if NEVS gets totally weak or goes bankrupt!

    Now the bad news from Mahindra … after a little light was in the tunnel for NEVS and NEVS gets little stronger for dealing!

    For me that’s clear … buyers are waiting and hoping that NEVS is struggling. And they will do their best .. to get NEVS not in a better position

    Bad games … but normal …

  • I am glad there are several forists who still keep their hope up. I was shocked for the first time during this whole saabisode by this news: Until now, I could not imagine Saab would really drown; ‚too good to finally fail‘, something like that. And I always had Mahindra in mind, them just keeping in the back until things are being done. Now this picture may be smashed and if this turns out to be true, for the first time I seriously doubt that there will be any new Saab cars in the future. Shocking day.

    • Let’s not jump to conclusions, Mario. Yesterday morning’s story on SVD.se hasn’t been confirmed by anyone yet. In fact, the paper decided NOT to print it in their printed edition today. Highly unusual. Instead there is a story by the same author about the progress in the court case against Victor Muller (which is completely unrelated).

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