How will the resurrected Saab fare as an EV manufacturer?

By Alisdair Suttie 20 June 2012

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Wednesday 20 June 2012. Fleet Voice Column.

With more plot twists, ups and downs and intrigues than ‘The Killing’ and ‘The Bridge’ put together, the Scandic saga of Saab seems to have reached a denouement. The Swedish car maker, or at least the rights to its name, has been sold to a Chinese-Swedish group of investors who intend to build electric cars [full story].

It is commendable these investors have decided to take on a company that most, including this humble columnist, thought was dead, buried and forgotten about. None of us had forgotten the 3,000 Saab workers left without jobs, though many have gone on to work for Saab’s arch-rival Volvo that is enjoying booming sales under its Chinese ownership.

More commendation comes for Saab’s new owners choosing to go down the electric vehicle route. As many of you will be aware, the Jetson-esque future of the car has been somewhat overstated and we are not all driving electric cars right now.

This doesn’t mean there isn’t a future for electric cars, either for specific roles or as an alternative to the internal combustion engine in the longer term. We’ve also heard the likes of Carlos Ghosn predicting a rosy future for EVs, while BMW would not be ploughing much of its considerable cash reserves into its new electric ‘i’ brand if it didn’t think at least a large section of the motoring public would be plugging in rather than filling up with fuel.

Leading lights

However, detail of Saab’s future remains scant, to say the least. What we do know is the investor consortium is headed up by Kai Johan Jiang, who is a Chinese businessman with Swedish nationality.

Jiang has teamed up with Karl-Erling Trogen, Volvo’s former head of truck and construction equipment. They are the leading lights of the National Electric Vehicle Sweden (Nevs) company that now owns the rights to Saab.

The pair say they intend to ‘start a new business’ that will focus on developing and producing electric vehicles in Sweden. It has not made it clear if these products will be purely for Swedish, European, Chinese or global consumption.

All that has been said officially is: “Nevs and the receivers of the Saab Automobile bankruptcy estate today signed a purchase agreement which covers the main assets of Saab Automobile AB, Saab Automobile Powertrain AB and Saab Automobile Tools AB.”

One would suspect to make an electric vehicle viable as an economic concern, it will have to offer a global reach, with particular attention paid to the emerging car buying markets in BRIC countries.

Mountain to climb

With little of Saab’s previous infrastructure left in place after the company went bankrupt in December 2011, and not producing a single car since April 2011, there’s little hope of Saab returning to any sort of volume production for a very long time to come.

There is also the small matter of many of its dealers now no longer existing, while the buying public’s perception of Saab is seriously tainted by the prolonged death throes inflicted on the Swedish marque.

Given that Saab only had assets sufficient to cover around a third of its debt in April of this year, a clean sheet approach is probably the best way to go for the newly formed version of Saab.

However, Saab will still have a mountain to climb if it ever wants to rank alongside the premium brands that were once its near rivals. Yes, Saab always appealed to a quirkier type of buyer, but to regain the 133,000 who bought a Saab at the company’s peak in 2006 will involve very considerable investment.

Even with the riches still flowing in China despite the economic downturn even affecting its mighty finances, this sort of huge investment is not likely to be forthcoming. As we saw with the ill-fated attempts of Spyker to save Saab from the inevitable ignominy of bankruptcy, the amounts of cash need to keep a car company off of life support are mind-meltingly large.

So, we’re more likely to see a Saab badge on something smaller, more compact in physical and business size. We know it will be electric, but we’ve yet to hear if this will be electric power developed in-house or bought in.

Clash of cultures

There are many ponderables about the future of Saab. So many, there’s little point going into them as any potential answer is probably going to be wrong. Let’s not forget, it was only a short while ago most of us other than dyed-in-the-wool enthusiasts thought we’d seen the last of this formerly technically advanced company.

What Saab’s new owner would do well to study, however, is the company’s relatively recent past and the wholly unsuccessful dalliance with General Motors. Here was an all too obvious clash of cultures and mindsets.

Where GM wanted Saab run by bean counters and the clipboard classes, Saab has always been an engineering company that happens to produce cars. When  these two forces met, it was never going to end happily.

Unfortunately for Saab, GM won the day and withdrew its cash and any goodwill it might have had for the Swedes.

All is not lost, though, as Saab still has its reputation for engineering excellence and there are certainly more than enough talented engineering types left in Scandinavia to make it work again. Hopefully, Nevs will not lose sight of Saab being an engineering firm first and foremost. Let it do things this way and the rest will follow naturally.

It may even result in Saab producing an electric car we can all own and enjoy. Well, maybe not all of us as that just wouldn’t be the Saab way.

Whatever happens to Saab in the future, you have to wish it well, and there are sure to be plenty more exciting plot turns to come.

Alisdair Suttie

Categories:Fleet news , Saab , Fleet Voice , Features

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