NEVS halts Saab production due to cash crunch
STOCKHOLM May 20 (Reuters) - China's National Electric Vehicle Sweden (NEVS) has temporarily halted output of its Saab car due to a shortage of funds, it said on Tuesday.
NEVS, which last year resumed low-volume production of the car 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. Ltd 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 would stand idle for four weeks from Thursday, NEVS spokesman Mikael Ostlund said.
Qingbo is the investment vehicle 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.
"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 be up against the likes of BMW, VW and Ford in one of the most competitive industries in the world.
NEVS said it was negotiating a co-operation deal with a carmaker for the development of a new platform for new car models. It is also in talks with another carmaker about it 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. (Reporting by Anna Ringstrom; Editing by Mark Potter)
- Qatar adamant it will host 2022 World Cup despite doubts
- Argentina's Fernandez to meet billionaire investor Soros in New York
- New Jersey hiker killed by black bear : police
- Islamic State urges attacks on U.S., French citizens, taunts Obama
- Housing data hits Wall Street; S&P has worst day since August 5