 "All you wanted to know about NEVS, Mahindra's latest acquisition target")
Utility and tractor manufacturer Mahindra & Mahindra has put in a bid to acquire a stake in troubled Swedish company National Electric Vehicle Sweden (NEVS). Here is all you wanted to know about NEVS:
Swedish car maker Saab Automobile AB, formed in 1945, is one of Scandinavia’s best known industrial brands. It began as a manufacturer of small cars mainly for the European markets.
US auto giant General Motors, which already had series of car brands in its kitty, bought 50% stake in Saab in 1989, only to make it a 100% subsidiary 21 years later through purchase of the remaining stake.
It separated its auto business from Saab AB’s aerospace operations in 1990. Saab’s Grippen was one the bidders for the multi-billion contract to supply fighter jets to the Indian Air Force.
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Despite its distinctive brand and a loyal fanbase, Saab struggled against bigger competition, failing to tap growth opportunities especially in the emerging markets.
Unable to turn around operations, GM exited the company in 2010, selling it to Dutch automobile maker Spyker Cars NV. M&M was also believed to be in the race to buy Saab less than a year after it acquired another struggling company SsangYong Motor Company of Korea.
Meanwhile, the troubles of Saab never ceased to exist. The company struggled to avoid insolvency throughout 2011 following which it filed for bankruptcy the same year.
Its sale to a Chinese consortium the same year was blocked by GM, which opposed the transfer of technology and production rights to the Chinese company.
In 2012, another Chinese-Japanese consortium formed a new company called NEVS after buying the business assets of Saab. Led by a Chinese businessman Kai Johan Jiang, NEVS aimed at positioning itself as an electric car maker that also made gasoline and diesel cars.
Plans were afoot to have a fully electric version of the sedan powered by lithium-ion batteries imported from a company in China. China was also the main market for NEVS whose promoters view it as a big electric vehicle market. GM in between objected to the use of Saab brand name.
After being under prolonged shutdown, the first Saab car by NEVS, a gasoline-powered 9-3, rolled out of the production line only by the end of 2013. Earlier this year, NEVS sought protection from its creditors after struggling to be on target to deliver 120,000 cars a year by 2016.
A Swedish court granted permission to carry out reorganization of the company, which was later extended by three more months after NEVS petitioned that it was in talks with couple of vehicle manufacturers for a sell-out.
In addition to M&M, China’s Donfeng Motor Corp is believed to have evinced interest in buying NEVS. But promoters of the Swedish company are believed to have chosen the Indian company over the Chinese one.