China's NEVS suspends Saab output in Sweden amid cash shortage
China's National Electric Vehicle Sweden has temporarily halted output of Saab cars due to a shortage of funds, it said on Tuesday.
NEVS, which last year resumed low-volume production of the Saab brand after it bought the bankrupt iconic Swedish marque, said it currently did not have enough cash to pay outstanding debt.
"The reason is that NEVS' part-owner, Qingbo Investment Co., has not fulfilled its commitment to, when necessary, finance NEVS' activity," it said in a statement.
"NEVS is therefore making a temporary and controlled halt of production, which hitherto has been six cars per day, and is reducing agency staff."
The Trollhattan plant in south Sweden will be idled for four weeks beginning Thursday, NEVS spokesman Mikael Ostlund said.
Qingbo is the investment agency of the city of Qingdao, which bought a 22 percent stake in NEVS last year and has ordered a fleet of 200 electric Saab vehicles for the Chinese city.
"Qingbo hasn't terminated the deal, they say they will complete it. But we haven't received the financing they had agreed with our main owner," Ostlund said.
NEVS is betting on an as yet unbuilt electric version of a decade old Saab model to bring the brand back from the dead. It is targeting its home market of China, where the government is promoting clean automotive technology.
The battery version of the current model will compete against the likes of BMW, VW and Ford in one of the most competitive industries in the world.
NEVS said it was negotiating with another carmaker to co-develop a new platform for new models. It is also in talks with another carmaker about buying a stake in NEVS.
"We are now seeking bridge solutions until sometime in June when we expect to have the result of the discussions with the intended partners," Ostlund said.