Dippen spotted this news story on the Swedish Public Service Radio site and has posted through a quick translation to me.
A little bit of background……
At this point, it is understood that prospective part-owner in the Koenigsegg Group, Beijing Automotive (BAIC), will most likely seek to acquire tooling for the outgoing Saab 9-5 and possibly a generation of the saab 9-3 for local production in China.
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Expert has high hopes on Saab in China
High end Saab models that are produced in Trollhättan and more low key Saab models that are produced in China, that is what Saab Automobile’s future can look like, according to Tony Fang who is a professor at Stockholm University.
- What I mean is production will be both in Sweden and in China” says Tony Fang who has studied Beijing Automotive’s latest move to invest in the new ownership structure of Saab.
Less luxurious models but with the same high quality, that may have tomorrows technology could be developed and produced in China in the future. At the same time Trollhättan could produce more high end models.
That is how Tony Fangs analysis looks, because China invests a lot to take big steps in technology of the future.
The thing that Chinese corporations do not have, the thing that they do have to learn is management of organisations on a global scale, This is why Saab is interesting.
And one should not underestimate the help Saab will get from the Chinese market, especially to keep in mind that Beijing municipality is involved in Bejing Automotive. Chinese customers do have a lot of confidence in these companies and this could give Saab a big advantage in the Chinese market
If the partnership would be successful then Beijing Automotive will get even more involved in Saab and invest more money to develop Saab.
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An inference could be drawn that suggests he’s talking about producing current models in China, which as I understand it is not in the plans at this point in time.
As I mentioned at the top, the only things that seem to have been spoken of publicy are to BAIC to produce outgoing generations for the domestic market.
One could look into the future, however, and if Saab and BAIC succeed in growing the company, then Chinese production for limited export could also come into play. I think there’s a lot of water to flow under the bridge before that happens, however.
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{ 21 comments }
It may never be the case but… over my COLD DEAD BODY will I EVER buy a Saab built in China. No matter what. Period. End of discussion. Thank you and good day.
raquettelaker2 couldn’t have said it better. I would never buy any car, let alone a Saab built in China. One reason (amongst many) would be how workers are treated in that country. I was nervous that this could happen with BAIC getting involved…
It even brings buying Swedish Saab’s into question. Sure it is Swedish made when you buy it but does this mean replacement parts for the current cars will all become Chinese made when the production is transfered?
If more money is needed BAIC could gain more and more control as well.
Full agreement on the above statements !
I’ll rather see the end of Saab now -even if they could be “saved”- than a chinese takeover.
Do we really want more cloned cars with Saab badges on the plastic engine cover
- no matter what ?
Forget it, let them pass away with dignity.
I seriously don’t think this is a good idea as it will ruin the brand in the Chinese market. Selling out-going generation of cars in China will have a negative affect on the brand image (just like what happened to audi and VW in the past). Many of the current Saab owners may turn to other brands for this reason.
Europe and USA not the only play in town: http://www.wired.com/autopia/2009/06/airbus-china/
I don’t think Airbus would do this if they weren’t safe on the quality standards. Airbus is actually not the first one to license build aircraft in China. The US manufactor McDonnel Douglas has done the same.
Boeing, aircrafts full of chinese parts, is also considering the same: http://www.dailyfinance.com/2009/08/31/will-boeing-move-to-beijing/
Personally, I just don’t get a grip on that Asian fear, guys. Building SAABs in China will in the first place most likely be for the Chinese market only, and supervised by SAAB management. But off course there might be a situation like this: Honda (to mention one) is selling Chinese Hondas to european and US markets.
Oh well, perhaps it’s easy for me to say living almost next door to the SAAB factory in Trollättan and will have my next car produced there.
Cheers from Norway!
-Olav-
Always on the longest way home when out there with my SAAB. Always!
Yay… What fantastic knee jerk reactions….
So BAIC can invest but get nothing but a 20 year old architecture?
Don’t see that as a fair deal personally.
One very Important factor you might want to consider if SAAB’s Chinese partner would produce say the new 9-5 for example. That vehicle would be sold in Asian Markets ONLY.
Factor 1. It would be far cheaper for the car to be produced in China for the Chinese market than to Ship it there and pay the import duty. Plus the tooling is already in China and can purchased locally.
Factor 2. It would be more expensive to build a car in China and ship it to North America and pay the import duty.
Factor 3. Given the perceived western view of Chinese build products, SAAB would not risk shipping that product to those territories.
Factor 4. Just because a SAAB was build in China, doesn’t mean that all Corporate Identity would be thrown to one side. SAAB would still want the vehicle to have all key elements and number 1 on that list would be Safety.
Factor 5. Will you have the same opinion about the 9-4x? As we know Mexicans can’t produce anything apart from tequila and tortilla chips so what chance would they have in something so sophisticated as a motorised vehicle? Especially a SAAB that should never be produced outside of Sweden despite how logical the business case is.
Factor 6. If SAAB doesn’t work with BAIC then someone else will and with the potential of China contributing 10% of your ‘Break even’ level, If you were in SAAB’s position, you would be absolutely insane not to do it.
Factor 7. Not every person will have a negative view on a chinese built SAAB.
In fact is fair to say most customers wouldn’t care.
Factor 8. A China built SAAB will be no different to a Mexican built one or a Swedish built one or a Austrian one, or finnish one. Same as no difference with an American Built Z4, X5. I see enough being driving here in Germany to see that the customers just don’t care where it’s built, as long as it the real deal.
Silly silly people why not weigh up the the pros and cons before throwing a tantrum like an infant.
And there was me think SAAB owners were open mined people and capable of evaluating situations????….. Oh how times have changed
I am concerned by some of the comments above. People, get out and see the world. China is part of the future and Saab should be there.
Couldn’t agree more.
I remember seing an old episode of Get Smart from the 1960′s… basically they had a stupid double pistol which was rubish because it was made in Japan. Ironic now as Japanese made is s sign of quality. Same with Korea and no doubt the same eventually with China.
I have said in the past that the Chinese are not stupid and don’t want to see their investment going south. The chances are that they will do the right thing to maximise their investment.
Don’t know what every one is worried about… Saab was owned by the Americans and look what they did. The Chinese couldn’t be any worse and you don’t drag a country that was completely stuffed 60 years ago into a major world player without having some business nouse.
Can’t wait to see the righteous indignation in this thread!
Couldn’t agree more. Well put, MartinW, Daniel and WooDz!
Cheers from Norway
-Olav-
Always on the longest way home when out there with my SAAB. Always!
This article surprises me. Although using Saab’s Chinese partner to produce service parts for older models is a brilliant idea, I doubt the Chinese buyers will want to buy out-of-date and down-scale models of Saab vehicles.
I base this on what GM discovered when they started production of automobiles in China. The Chinese market demanded; the Buick nameplate because of its historical prestige, smaller displacement engines because of higher tax consequences for engines above a certain size, and lengthened wheelbase cars so the owners could be chauffered in their new Buicks.
I don’t see either the OG9-5 or 9-3SS as being the size of car in which to be chauffered. Maybe the current 9-3SS as an entry level model after the future 9-3 replacement hits the market. The new 9-5 appears to have sufficient rear seat room to be a chauffered vehicle.
The article appears to be slanted with an incorrect vision of the Chinese consumers who have the financial means to purchase new Saab automobiles.
WooDz, well said. I for one agree with you.
MagnusE
The problem with producing cars in China is not the build quality. No doubt Saab would make sure that all requirements were met. The problem is the lack of human rights, the immorality of keeping manufacturing costs down by suppressing the workers, and the danger of putting the company’s future into the hands of a self-serving communist regime who will only honour agreements as far as it suits them. China is not a democracy! In this utterly finance-driven world, it’s too easy to lose sight of that.
Sure, it’s primarily a matter for governments to decide what to do and not to do with regards to China. But companies and individuals also have a responsibility to think about such matters – especially when governments choose not to.
I’m not saying don’t build in China. I’m saying make sure that all aspects, including ethical ones, are very carefully thought through before deciding if to do so.
BAIC would do much better to produce their own car using the old 9-5 as a base. Have a look at these BAIC/BAW concepts (not the Jeep, obviously):
http://www.petrol-head.com/2008/04/beijing-2008-16.html
Those are good looking cars, and BAIC would do very well to produce any of these with 9-5 technology. That would ensure that their cars are as safe as anything out there, and come out of the gate with most of the bugs worked-out. There’s no point rebuilding the old 9-5 when you can make a car that speaks to today’s Chinese consumers.
The other upside to this is that China is more likely to ease import barriers if they have competitive local makes, which means that Saab could be allowed to import the new 9-5 into China and sell it at a reasonable price.
A lot of industry insiders have remarked that China isn’t the cheapest place to make cars in 2010. Poland, Slovakia and Roumania have been cited as lower-cost countries. Sweden isn’t far behind, given its exchange rate advantage (relative to the Euro) and the high productivity of the Saab plant. In spite of what some journalists think, it doesn’t make sense to build Saabs outside of Sweden while Trollhättan is underutilized. Obviously, Chinese tariffs may justify some production in China for local consumption, but not for export to Europe.
@ Bernard:
Your final point is the perfect reason why BAIC is a great partner for SAAB in Asia. I think that China is more interested in getting foreign investment that will create more jobs, wealth and stability in their country than lowering Import duties. Russia and other eastern European countries may have lower production costs but they also have different rules on what constitutes an Import, whereas the Chinese have very strict rules, mainly drawing a distinct line between production and assembly.
@ Börjesson
As for human rights I feel it may be better to leave politics to one side because I wouldn’t exactly say that the west has had a perfect track record on that front.
To the first 4 commenters: Guys, you won’t have much to purchase at all if you exclude all Chinese made good. Good luck finding some suits to wear, a microwave to heat food and some bulbs to keep the light on at home…
Börjesson: Really, China being communist country? Please go read the definition first. It is but in name only. This kind of behaviour is exactly what Capitialism provacates. And talk about human rights, look no further than the country that leads the charge of ‘freedom’, the USA did to the middle east. Invading countries for their natural resource doesn’t count as abuse of human rights?
If you want to be a serious player in automarket today ,you have to be in China. Look at Volvo,Audi,Merc,VW , All have production in China today.
The deal with BAIC is one hell of a oppertunity for Saab.
Today LEAR announced the closure of its plant in Roquetes(Tarragona) near Barcelona. In this plant all the production or nearly all, are the wires/cables for the Saab 9-5 and 9-3. Due the end of the 9-5 and lower sales of the 9-3, LEAR decided to close the plant and move the production to Hungary.
Regards
I don’t mind if Saab sells the tooling to China for them to keep the OG9-5 going for themselves. The way the original article talks though is that Saab’s luxurious models would be built in Sweden while their “budget” (?) cars could be built in China. Why? Why would they have budget (aka cheap) cars? I thought the whole point of getting rid of GM was to bring Saab production (and JOBS) back to Sweden.
I realize a lot (all) of our consumer goods come right from China. I just don’t want my car to come from there too! I get a warm fuzzy feeling from the VIN sticker on my Saab “SAAB Automobile AB – SWEDEN.”
So, sorry, but if the VIN plate says China on it it’s not getting a spot in my garage. Just my opinion and everyone is welcome to theirs but I’m sticking to it.
R2, remember this is a translation and a fine point such exactly which models will be built where and when – when the plan hasn’t even been really formulated yet – can be lost in the mix.
I think it’d be a while before a current model Saab could/would be produced there and even then I think it would be for local markets (Asia and Australia) only.
I know this is a long way out and the probability of Chinese Saabs ever getting to the US is slim. Just letting anyone reading this from Saab who thinks it might someday be a good idea… it is not.
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