BMW, Saab Automobile to Agree on Engine-Purchasing Deal

Saab Automobile and Bayerische Motoren Werke AG have agreed on a deal that allows the Swedish carmaker to use engines made by BMW, according to a person with direct knowledge of the matter.

Saab will initially purchase BMW engines for the 9-3 model that is scheduled for release in late 2012, said the person, who asked not to be identified before a contract is signed. The carmakers plan to announce the pact in Trollhaettan, Sweden, on Sept. 29, before the Paris Motor Show, the person said.

Spyker Cars NV, which bought Saab from General Motors Co. in February, jumped as much as 81 percent, the most in eight months. The shares climbed 1.55 euros, or 64 percent, to 3.95 euros as the 5:30 p.m. close of trading in Amsterdam.

Spyker “confirms that talks are ongoing and will give further details once a final agreement has been reached,” the Zeewolde, Netherlands-based company said in a statement.

Joe Oliver, a spokesman for Saab, declined to comment, as did BMW’s Frank Wienstroth.

The automakers are also in talks about Saab buying diesel engines from Munich-based BMW, as well as using BMW’s Mini Countryman platform for its smaller 9-2 model, the person said.

Wiessmann, Carbon Motors

BMW Chief Executive Officer Norbert Reithofer has been looking for opportunities to sell components to other manufacturers to boost revenue. BMW, the world’s largest luxury- car maker, agreed in March to supply more than 240,000 six- cylinder diesel engines, cooling systems, and transmissions to Carbon Motors Corp., which is developing a police car for U.S. law enforcement agencies.

The German automaker also supplies engines to exotic car manufacturer Wiessmann GmbH.

The engine Saab will buy will be a new 222 horsepower motor that BMW is developing and has yet to put in any of its cars, said the person. While it will first be used in Saab’s new 9-3, the engine may be used in other models, including future versions of Saab’s flagship 9-5 sedan, the person said.

As part of the deal Saab will also tap into BMW’s Efficient Dynamics program, designed to reduce fuel consumption and increase motor and vehicle efficiency.

Saab’s upgraded 9-3 model will be the first one designed by Jason Castriota, the U.S. designer known for creating the Ferrari P4/5 and Maserati GranTurismo. Saab has said it aims to sell 60,000 to 70,000 of the new 9-3 annually, out of total sales of 120,000 cars, by 2012.

The smaller 9-2 model, which Saab aims to release by 2014, is inspired by the tear-drop shaped Saab 92 model that was in production between 1949 and 1956.

To contact the reporters on this story: Ola Kinnander in Stockholm at okinnander@bloomberg.net; Chris Reiter at creiter2@bloomberg.net

To contact the editor responsible for this story: Kenneth Wong at kwong11@bloomberg.net

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