More sad news as NEVS lays off staff as Saab output remains idled

China's cash-strapped National Electric Vehicle Sweden said it would lay off up to 200 employees at its Saab car plant in Sweden as production is unlikely to resume anytime soon.

NEVS, which bought the bankrupt Swedish carmaker Saab in 2012, halted already-low output in May because of a shortage of money. In August, it obtained protection from creditors through a Swedish court while trying to secure funding.

"The ongoing discussions on collaboration and ownership structure, which have not yet resulted in a binding agreement, indicate that the decision for a start-up of production will take time," NEVS said in a statement Wednesday.

It said the layoffs, due to lack of work, were a step in a reorganization plan that the company's administrator would present at a creditors' meeting on Oct. 8. NEVS currently has 550 employees.

NEVS has said it was in talks with two unnamed car firms to secure more money, that it has external debt of about 400 million crowns ($56 million), and that it generated a pretax loss last year of 601 million crowns on sales of 41 million crowns ($5.9 million).

The firm is betting on an electric version -- now in a prototype stage -- of a decade-old Saab model to bring the brand back from the dead. It is targeting its home market of China.

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SAAB weather new bankruptcy with news that a two major manufacturers are in talks for assistance.

Saab's owner, National Electric Vehicle Sweden (NEVS), says it is in discussions with potential partners as it seeks to restart car production and develop future models.

NEVS was forced to stop production at Saab's factory in Sweden in May due to a shortage of cash to pay suppliers. NEVS last week denied that Saab is facing insolvency after a supplier filed a bankruptcy petition.

"We need cooperation to secure a long-term financial structure and help us to solve our short-term financial challenges," a NEVS spokesman told Automotive News Europe.

The spokesman said NEVS is talking with potential investors but declined to name them. Getting new investment is a "prerequisite to forming a decision on how and when we can resume production," he said.

NEVS said Labo Test, one of Saab's suppliers, had petitioned a Swedish court to declare the automaker bankrupt over unpaid bills of 150,000 kronor (16,372 euros). According to NEVS, the petition has now been withdrawn.

"The company does not have enough liquid cash today to pay all outstanding debt, but NEVS' assets are larger than its debt. NEVS cannot say exactly when, but NEVS' suppliers will get paid," the company said in a statement.

The automaker’s debts amount to 3.6 million kronor (393,000 euros) with the Swedish Enforcement Authority, the Wall Street Journal reported Aug. 13, adding that the government agency has said another 91 claims, many of which are for several million kronor each, are waiting in the pipeline for NEVS to acknowledge.

China revival

NEVS, which is controlled by National Modern Energy Holdings Ltd., whose founder and principal owner is Chinese-Swedish businessman Kai Johan Jiang, bought Saab from Dutch niche sports-car maker Spyker in September 2012 with the aim of reviving the brand with an electric lineup aimed chiefly at the Chinese market.

Production of a gasoline-powered 9-3 model began a year later, but by May the company ran into financial difficulties and halted production, which stood at six cars a day.

Spyker bought Saab from General Motors in early 2010, but soon hit financing problems and spent months trying to put together deals with Chinese companies before Saab filed for bankruptcy in December 2011.

Renault wants to return to the key Iranian market

Renault wants to return to the key Iranian market as soon as the political situation eases but has little visibility when that will happen.

Renault was forced to halt shipments of knockdown kits to Iran on July 1 when the U.S. government extended economic sanctions over the country's nuclear program to the automobile sector.

Renault was one of the last large European companies still active in Iran and its withdrawal from the country is a blow for the automaker.

With a volume of 100,783 vehicles sold in the country last year, Iran was Renault's eighth-biggest global market by sales, above No.9 Italy where Renault sold 96,144 units and Spain where it sold 83,366 cars. The automaker had a 10 percent market share in Iran in 2012.

Renault builds the Logan and Megane in Iran with Tehran-based partners Iran Khodro and Paris Khodro.

A Renault spokesperson told Automotive News Europe that the automaker is waiting for the sanctions to be lifted or the political situation to change before it begins shipping CKDs to Iran again, but said the company has little visibility when that will be.

Production of Renault vehicles in Iran will wind down when the kits already shipped to the country run out in the coming weeks. The production infrastructure in Iran used to build Renault cars will remain in place indefinitely, the spokesperson said.

Renault was forced to write off the entire value of its Iran operations leading to a 512-million-euro ($680-million) charge against its second quarter earnings.

Renault's shipments of kits to Iran fell 48 percent to 28,082 units during the first half.

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