Reports indicate Saab will build cars in Tianjin, China *UPDATE: Youngman May Make New Investment*

According to China Car Times, Saab will set up shop with partner Youngman in Tianjin, a city near Beijing. It is also the site of Great Wall Motor’s new plant, serves as a major automotive import hub, and is home to many major Chinese suppliers.

CCT mentions that they’ve heard reports that Saab sent a team of engineers to Youngman and found that their existing production lines (which a commenter mentions in the same article are elsewhere in the Guizhou to Shangdong provinces) can easily handle the additional 150,000 vehicles a year when they’re brought online. They say that the plant would be operational in 2 years at the earliest, and that they would need to import cars in the meantime. I’m sure the workers in Trollhattan would be more than happy to ramp up production to cover the difference if Pang Da is placing orders for tens of thousands of Saabs.


You’ll also remember that Saab and Youngman will produce not only Saabs, but “child branded” vehicles for the Chinese market. From the June 13 press release:

Spyker, Saab Automobile, Pang Da and Youngman will set up joint ventures with respect to the manufacturing of Saab branded and child branded vehicles and the distribution of Saab branded and child branded vehicles for the China market. Saab Automobile and Youngman will each have a 45% interest in the manufacturing JV and Pang Da will hold the remaining 10%. Saab Automobile and Youngman will each have a 33% interest in the distribution JV and Pang Da will hold 34%.

So while that 150,000 figure may seem high, remember that it includes this new brand that is exclusively for Chinese consumption. We don’t yet know the breakdown yet, but whatever it is, these Chinese made Saabs can only further the brand’s image if built in a quality facility, which Tianjin seems to provide. Aircraft manufacturer Airbus assembles its A320 there, and it’s position as an industry center should help Saab get off its feet in China, if this report is true.

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UPDATE:

According to SinoCast Daily Business Beat who cite this article (google translate only takes us so far, young people = Youngman ;)), Youngman is considering making an additional investment into Saab to help get them through this supplier mess. They along with Pang Da and Saab will reportedly meet this week, according to an executive with Youngman who wished to remain anonymous.

CurtInFalcon
Member
5 years 30 days ago

I’m hoping that the Chinese government approves the deal quickly so that funds can roll into Saab and this joint venture can get off the ground. Saab needs this to hapen immediately.

davidgmills
Member
5 years 30 days ago

Interesting that the Chinese can force Saab into producing Saabs in China, but somehow neither GM nor Ford could ever manage to produce Saabs, Volvos, or Jaguars in the US when they were part of GM and Ford. Yet all the major German and Japanese and Korean manufacturers set up production in the US.

Let’s hope what is made in China stays in China and let’s hope that Saab production continues in Sweden.

Ben
Member
5 years 30 days ago

+1, I’m sure saab will still produce in Trollhaten.

ryanonsrc
Member
5 years 30 days ago

+1, The plant in Trollhaten, and the talent pool there is simply too well-established to be tossed aside. At the end of the day: even if Saabs for China are mostly built in China, that will mean more $$ back towards the mothership (which will always be in Trollhaten).

twirix
Guest
5 years 30 days ago
Why does Saab always have to stay in Trollhättan? Of course it takes time to start a new factory and to build up knowledge there but why in the long run? Especially if the major market is in China, who knows best what the Chinese wants? Not to mention the cost of labor. Before the comment thread gets out of hand on moving production from Sweden, let me just clarify for everyone: Saab = Trollhättan = Saab. They’re forever linked. We can all agree that the situation the Chinese government advocates, domestic production for their auto industry, forces Saab into… Read more »
jim
Member
5 years 29 days ago
Why does Saab have to be in Sweden? Why not move it all to China? I would say this… examine Chinese indigenous cars. Then examine a 2012 Saab. The product design staff and product planning staff in Sweden created the 2012 Saab model line. (Then the 2013 9-3!) This is competitive with Europe’s finest car products. Sure, you could outsource all that product creation staff to China. Then you would have cars build using today’s Chinese indigenous methods and refinement levels (something well below a Kia). We could outsource BMW engineering to Kia, for another example. It wouldn’t be quite… Read more »
James
Member
5 years 29 days ago
Sure, Saab = Trollhattan = Saab to us + people in Trollhattan/Saab… but to outsiders, well, Saab is a luxury brand + now a publicly traded company. If sales in China are outstanding (Chinese production) + sales are weak in the rest of the world (Trollhattan production), and particularly if Chinese production costs are lower than Swedish production costs, there undoubtedly will be pressure to relocate all production to China… This is of course is only 1 scenario, but iirc, the recent deal puts overall controlling ownership in the hands of the Chinese companies involved, and we already see some… Read more »
Mailr
Member
5 years 29 days ago

A more obvious reason is that the brand name “Saab” s shared with the defence manufacturer with the same name which has the legal rights to the name, and the agreement that allows Saab Automobile to use the name has a lot of conditions. I’m pretty certain that anything similar to moving Saab HQ out of Sweden voids that agreement. This is also why the company owning Saab Automobile, SWAN, does not contain Saab in it’s name.

That is, the owners of Saab Automobile can’t move the HQ out of Sweden if if they want to. End of story.

davidgmills
Member
5 years 29 days ago

Horsesh*t. The name without the production of cars is worth 0 as a car company. What was Spyker’s name worth? The fact that it is the name of an aeronautical company as well, will mean that once car production is gone, the name will only have value as an aeronautical company.

sandborg
Guest
5 years 29 days ago

Audi builds autos in Germany and many other worldwide locations. Same for BMW, and Benz and GM
and now SAAB will. So?? Nothing new here.

Grumpy
Member
5 years 29 days ago

Are you still being forced if you do what you want? I think Saab would have loved to have had a manufacturing JV in China since many years. If this works out they get what they want and what they need. No talk about being forced to do anything.

The fact that GM never saw the benefit to set u production line for Saab in the US is interesting but should be addressed at GM.

Totally agree with your last line!

spyked
Member
5 years 30 days ago

150k units? Why not start with spare parts for current units first? SAABS in dealerships and body-shops all over the U.S. and Europe right now that can’t run because of no spare parts. I’m sure the Chinese partners won’t care about that.

SAAB MUST do right by their current customers first. Econ/Business 101 – it’s always cheaper to keep a customer than go find a new one. They better remember that!

saabdog
Member
5 years 30 days ago

Hope the Chinese government approves this deal — and soon. Saab can’t afford a fumble. I wonder if this deal is the reason we haven’t heard too much from VM lately.

zippy
Member
5 years 30 days ago

Let’s face it, Saab needs way more money than VA is able to put in at the moment and it seems the only people who have that kind of cash are the Chinese. There are one of two possible scenarios here in my opinion 1/ the Chinese buy Saab and set up production in China for local consumption with Trollhattan producing cars for the rest of the world or 2/ Saab goes belly up and the Chinese buy the technology. I really can’t see any other scenarios at play in the moment.

Ralph
Member
5 years 29 days ago

I would personally put that headline in quotation marks, BTW.
After all, there’s only one report…which mentions reports…from an unknown origin.

Ants
Member
5 years 29 days ago

Is China right hand drive? Could have implications for Australia, the UK, NZ… And some production and transport economisation for Saab perhaps.

JasonPowell
Member
5 years 29 days ago

Nice to see you writing again Jeff, was wondering where you’ve been. I think it’s good news that they continue to move forward with this Chinese deal and if they make cars in China for the Chinese, I’m more then ok with that.

JH
Member
5 years 29 days ago

As long as there are Saabs made in Trollhättan, I am positive to this. China will be a huge market for Saab and generate income for Saab in Sweden. If Saab can overcome the hurdles that they face now, which I believe they can, Saab have good chances to prosper. 🙂

Mynoob
Member
5 years 29 days ago

If you plan to manufacture 150k units in China / for china and virtually nothing for the rest of the world (30k units?), why not just loose the Trollhättan plant and focus on china only? If you want to revitalize the sales in europe and US you can do that later on by either exporting units och setting up local production in America (mexico?).

I don’t really see the need for the Trollhättan plant.

The development on the other hand, must stay.

Khrisdk
Member
5 years 29 days ago

The quick answer?

If you skip the Euroepan production for china only, you will have killed the brand.
Most car buyers are snobs, who may buy an iThingy made in China, but not a Car
At least not for the next 10-15 years

hilmar
Member
5 years 29 days ago

Exactly. And by the way – thanks for that extraordinary piece of music. Let´s hope that Saab will survive in an extraordinary way, too. Uh – what a complicated transition to the main theme here. 😉

RS
Member
5 years 29 days ago

At the end of the day the biggest loser in all this would be the Swedish Government if all the cars in the country would be imported, but I guess they’re just too short sighted/blinded by something to see it.

Here’s one way to look at supporting the auto industry: http://money.cnn.com/2011/07/21/autos/chrysler_bailout_costs_gains/index.htm

theSandySaab
Member
5 years 29 days ago
China IS right hand driving, steering wheel on the left. In terms of quality, I am very satisfied with my Apple products, that are virtually exclusively manufactured in China, That includes all i-products that are actually a deficit in the US trade balance. Still, BMW, MB, Audi, VW all have manufacturing in China. The Chinese are brilliant (in general) to produce something as cheaply as possible, but also if a high standard/quality is required, they can do that very well to. Many “luxury” products are manufactured there, in part or parts, to complete and ready products. I hope that there… Read more »
Aeropilot
Member
5 years 29 days ago

Well on the picture it looks like they are driving in the wrong side !

Maybe it’s not taken in china though ?

Are yuo sure about the LHD/RHD issue ?

Mark
Member
5 years 29 days ago
Saab certainly needs to get some income from this China production and China/Asia sales. Elsewhere I think it’s still going to struggle until the aging 9-3 is replaced. Then if that car is right, it has a good chance. That car also has to be made in Trollhattan, even if it is not exclusively made there? The NG9-5 might be good and Saab may make a little bit of income from the GM sourced 9-4x, but it really needs a new ‘bread and butter’ car ASAP. Let’s hope the late 2012 launch is not delayed by current circumstances.
beren
Member
5 years 29 days ago

Seems like wishful thinking to me. Its not entirely certain that Saab will be around in 30 days much less two years. Maybe those engineers should be in Sweden on the line making a car or two? Or maybe instead of the travel expense they should be putting some bucks into an ad campaign for the 94x?

SAABNUT
Member
5 years 29 days ago
Judging from the outside of things, the Chinese solution, possibly in cooperation with allowing V A into the company as partowner and financer, seem to be the only viable path forward for SAAB. This will mean V M, the Chinese partners and V A as shared owners of SAAB Obviously the chinese investors want a solid return and a production in China is logical and make sense in order to get quick access to and share the SAAB technology, production skills, design and brand – all make sense – its probably both less costly and faster to buy their way… Read more »
Audun
Member
5 years 29 days ago

A very good comment!

Leeloo
Member
5 years 29 days ago
Why did not the SAAB management see this coming – they burned a lot of cash at a fast rate and sales did not meet expectations at all Of course they saw it coming. That’s the whole point, the intention has all the time been to move the whole business to China. There are no other ways to explain and describe the situation Saab is in today. The Saab company today will be going default and bankrupt very soon, matter of weeks or months. This is the only solution, if not, Saab would never have treated its suppliers like they… Read more »
Khrisdk
Member
5 years 29 days ago

Clever you…
It’s good to know that someone has all the answers.
Maybe you could help out the US government?

SAABNUT
Member
5 years 29 days ago
Lets assume you’re right – but what about the IP in the hands of GM? Unless GM accept full transfer / usage of these IP controlled products there is nothing to sell to China or any other party for that matter? And the Ip controlled by SAAB remains under the controll by the bancrupcy court – in the event of an bancrupcy. And the EIB loan that have preference to all securities and collateral……. Bancrupting the company doesnt make sense since the Swedish goverment will have to cover the defaulted loans to EIB – by selling and managing the assets… Read more »
Audun
Member
5 years 28 days ago

A very good reply to Leeloo.
Saab has to survive in the short term to be able to survive in the long term. I hope the chinese parners will help to ensure this if it can’t be done in any other way.

Peter Gilbert
Member
5 years 29 days ago

A win, win for Saab.

zippy
Member
5 years 29 days ago

Hardly a win win for Trollhattan though. Add to the fact there is no way in a billion years SAAB AB will ever let a Chinese company use the name. I wouldn’t buy a Chinese Saab. No thanks!

Niklas G
Member
5 years 29 days ago

Tens of thousands of new Saabs to build? Wouldn’t that intefrer with the traditional four month summer vacation? 😉

No, just kidding, This is really the kind of news that we need, next after any kind of news telling that the huge EIB road block is somehow finally removed and production ready to start again. Fingers crossed…

I don’t worry about moving Saab to China or Russia. Getting into those markets and getting much needed investments and, in the future, more cashflow from there is just great. 🙂

sandborg
Guest
5 years 29 days ago

Just read:
Zhejiang Youngman Lotus Automobile Co., Ltd. will consider making an additional investment in Saab AB to help the troubled automaker out, disclosed a senior executive for the Zhejiang-based company yesterday. SAAB is here to stay. Period.

Saabim
Member
5 years 29 days ago

Jaseper do you have a link. Thank you

Audun
Member
5 years 29 days ago

+1 🙂

BoeBoe
Member
5 years 29 days ago

http://www.menafn.com/qn_news_story.asp?storyid={7843c861-ce8b-4052-91fe-fa2462b8cbcb}

sandborg
Guest
5 years 29 days ago

It is on Google News

BoeBoe
Member
5 years 29 days ago
They will need the extra money… This is just in: Published: 15:53 CEST 26-07-2011 /Thomson Reuters /Source: Swedish Automobile N.V. /XAMS: SWAN /ISIN: NL0009816248 UPDATE ON SAAB AUTOMOBILE Zeewolde, The Netherlands, 26 July 2011 – Swedish Automobile N.V. (Swan) announces that Saab Automobile AB (Saab Automobile) has delayed payment of the wages to its white-collar employees as some of the funds that were committed by investors were not paid in time to effect such salary payments. Saab Automobile is taking all necessary actions to collect these funds and continues discussions with various parties to obtain additional short-term funding so that… Read more »
monte03
Member
5 years 29 days ago

Zeewolde, The Netherlands, 26 July 2011 – Swedish Automobile N.V. (Swan) announces that Saab Automobile AB (Saab Automobile) has delayed payment of the wages to its white-collar employees as some of the funds that were committed by investors were not paid in time to effect such salary payments. Saab Automobile is taking all necessary actions to collect these funds and continues discussions with various parties to obtain additional short-term funding so that the payments can be made.

Swan will update the market of any new developments.

Baracuda
Member
5 years 29 days ago

Not again… It’s really like a rollercoaster. Up and down from day to day…

BoeBoe
Member
5 years 29 days ago
Belfast_Saab
Member
5 years 29 days ago

I sense ‘positioning’ by VM once again and adding leverage to his discussions with Youngman & Pangda to raise much needed short term capital. Worked once, worked twice, can he pull it off a third time? Hope so….

saabdog
Member
5 years 29 days ago

Wow! Didn’t realize he has a new baby, I wish him & his family good health & luck!

zippy
Member
5 years 29 days ago

Let’s hope he takes better care of the new baby. 🙁

meccano
Member
5 years 29 days ago
Each of these international hooks up and manufacturing agreements is certainly different and unique depending on the specific deals and the parties involved. Having said that, I look at Volvo and can’t help but think they are thriving under their new ownership. While it may change in the future as Volvo’s product line is updated and renewed, it doesn’t seem to me that Volvo has lost its own heritage while under Chinese ownership. I suspect that the Chinese parents may take parts of Volvo engineering, manufacturing and distribution network to further their own Chinese made products, but thus far at… Read more »
davidgmills
Member
5 years 29 days ago

Give it time. Rome didn’t decay in a day.

ivo 71
Member
5 years 28 days ago

Nope. But it did evolve into Italy. You think that’s an improvement?

Ivo

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