Loss-making Swedish carmaker Saab is to use BMW engines in a move by Dutch owner Spyker to help boost its recovery and appeal.
Undercapitalised Spyker Cars, which bought Saab in February from General Motors, said today the luxury German group will supply 4-cylinder 1.6 litre turbocharged gasoline engines from 2012.
"BMW's engines and their fuel savings innovations are widely regarded as a benchmark in the premium segment," Saab chief executive Jan Ake Jonnson said in a statement.
The two firms are open to exploring further opportunities, Spyker chief executive Victor Muller said in the same statement.
The deal will help Spyker, which wants to sell 120,000 cars per year in the long term, obtain new technology despite its negative shareholders equity value of €126 million when liabilities surpassed assets in June.
"The Saab 9-3 model was built on an Opel Astra, which was quite a downgrade. A deal with BMW would help the brand," Keijser Capital trader Peter Jurgens said earlier this week when reports surfaced of an imminent engine deal deal.
Germany's BMW, the world's biggest maker of luxury vehicles, is keen to strengthen its position as an engine supplier after deals with France's PSA Peugeot Citroen and US-based Carbon Motors, which makes police cars.
Reuters