100 Cars And The Ongoing Saga

It is not easy to be a Saab blogger these days. There is not much happening, not many news to break. Ever since Mahindra was named as the potentioal new majority owner of NEVS last year things got even more quiet. Meanwhile the next deadline for the reconstruction NEVS is in at the moment comes closer. I’ve already heared some people say that NEVS should move faster to get this whole deal finally done. But then, there is one point that they miss: it is not up to NEVS anymore.

Given what I heared from various sources in and outside Sweden the deal with Mahindra is done in General but – again – the crucial issue is the brand name. Saab is pretty much fed up of reading their name in headlines reporting about financial problems or bankrupcy. While we all know that Saab AB and Saab Automobile are different companies not everybody does. And with Saab AB being a large defense company that is doing business all over the world it is not too helpful if you have to explain that it is another company that is in trouble all the time.

NEVS already had a hard time getting the rights to use the name and now, another debacle later, Saab AB has put up some pretty strong demands for any new owner that wants to use that name Saab for cars. It’s mostly about providing secure funding of NEVS and the development of their products. What they say is, to quote an infamous expression from a recent drama, “show me the money”. But since they learned from said recent drama they do not only want to see it, they also want to take it in their hands and count it to be really sure. While it may be true that without Spyker Saab would have been long gone, their track record before bankrupcy makes it even tougher right now to negotiate agreements. Be it with Saab AB or suppliers.

I have heared about some number that Saab AB came up with. I cannot tell how accurate that is but if the region is true it is not out of range given the investments that will be needed. So it is also a test to see how serious the investor is. Which is good. In all honesty, I don’t want to see another ray of light in Stallbacka that is too soon covered by black financial clouds.

This does not mean that I feel Mahindra is not serious. They have been there for a long time and have more than once tried to get ownershio of Saab which failed for various reasons. But they are still there and they are still willing to walk in. But surely not at any price. As I was always told by people who dealt with them they come with a plan for an investment and they won’t stretch that plan too far. If it does not seem to be profitable in the right time frame they rather let it go. For example as the Administraters insisted on a sale of Saab Automobile and Saab Parts together Mahindra backed out as they were not interested in both. We all know today how that story went on.

To come back to my statement in the beginning of this post, it’s not up to NEVS anymore if this Mahindra deal comes true. It is Mahindra and Saab AB who have to come to an agreement. While I am pretty optimistic that they can work it out since they know each other it is also clear that they don’t want to risk the cooperation they have in the defense sector. There are always two sides to the story and only time will tell if Saab can come back to full life from the enthusiasts brand it is at the moment.

So what is left for NEVS at the moment is doing their homework to stay alive through reconstruction. With the deadline comig close they need to get their paperwork together to explain court and creditors why they should get more time for the reconstruction. And on the other hand they need to get the funding which is why they complete those 100 cars to EU standard. It is only logical to turn to that lot since it can be turned into a dearly needed money.

The good news for all current and future owners of 2014 models is that NEVS and ORIO have come to a warranty agreement for those cars. ORIO will take over full responsibility for all warranty issues and parts supply. This is a good sign, also that from what I can tell ORIO talks to the clubs and listens to the people. Things are not as bleak as they may look at times.

JH
Member
1 year 7 months ago

Thank you for a good summary, Till!

kochje
Member
1 year 7 months ago

Till, this is indeed a good summary but there is one thing I am not in agreement with.
You say that the “track record of Spyker before the bankruptcy makes it tougher right now” and that is not right.
First of all Spyker is not bankrupt while that has been recalled by the Dutch court but moreover this comment is not fair. VM and his team have done everything to continue the operations at Saab but they were sabotaged by the Chinese companies they had faith in. So nothing to do with Spyker as such.

Mick E. Bice
Member
1 year 7 months ago

It was not the fault of the Chinese per se, but the fault of Victor Muller for involving the Chinese. Muller could have tried to save Saab. He didn’t. Instead he decided to involve the Chinese. And the rest is history.

phermansson
Member
1 year 7 months ago
He could have tried to save Saab? I can assure you that in 2010, there was nobody else willing to try to save Saab other than Chinese investors. I know that Victor talked to a number of major auto-brands and companies in the west before he turned to the east… How do I know this? He told me himself!… Believe me, he did everything anyone could do to save that place, but he was only one man with a small team and even though they were a great team, they were not strong enough to fight the large forces working… Read more »
dcx _310
Member
1 year 7 months ago

Muller choose the Chinese partner not only have money yet NEVS has nothing but money.

mnztr
Member
1 year 7 months ago
Well the fact that talks are still ongoing, at least it means Mahindra seem to be making an effort to satisfy SAABs demands. I think the money is an amount they will have to spend on their other automotive operations away, so a small increment for a luxury brand should NOT be a big deterrent. Most of the tech they develop for SAAB will be usable in their other brands. So to me the actual $$ they will have to spend incrementally on SAAB will not be the billions mentioned. Maybe 1B or 2 in conjunction with all their other… Read more »
Hamish Keddie
Guest
1 year 7 months ago
Mahindra is a large, diverse company, that they could come up with the required amounts of money does not seem in doubt. Nor are they afraid to spend on R & D, they have been developing new platforms and new engines for their existing ranges. However they will want a return on their investments in a reasonable time frame. With their purchase of Ssangyong they were hoping for profits within five years, which they did not achieve. (Quite possibly this year.) Mahindra may not be prepared to wait for the Phoenix platform to make SAABs. Would SAAB AB be prepared… Read more »
Hamish Keddie
Guest
1 year 7 months ago

I forgot to add, I am not envisaging simply a badge engineered car, but a SAAB version with different styling, equipment, probably some reworking of the platform and possibly different power trains, compared to any Ssangyong or Mahindra vehicle built on the same platform. Sort of like Audi is to the VW base cars.

phermansson
Member
1 year 7 months ago

Mahindra is a large group consisting of many relatively small companies providing a great profit into that big group! So No, Mahindra is not a large company! In a group you can not use the money earned from these other companies in a group to do risky business… each company in the group needs to sustain itself otherwise its cut off to keep the group alive…

saabserb
Member
1 year 7 months ago

+1. Exactly my thoughts. I think this is the main issue and not the funding!

Hamish Keddie
Guest
1 year 7 months ago

OK, I stand corrected on the Mahindra Group structure. Doesn’t this further emphasis that Mahindra would need to see a good chance of a return on their investment in the foreseeable future before investing in NEVS? Is this possible if they have to wait for the phoenix platform or development of a brand new car from scratch?

3cyl
Member
1 year 7 months ago

Would you consider a minimum of ten years the foreseeable future? A plan that calls for an initial investment then putting money in year after year to cover losses for at least ten years before maybe starting to make some return on investment is probably about as good as it gets for this project..

Hamish Keddie
Guest
1 year 7 months ago

Its not whether I consider it the foreseeable future and reasonable that matters, but whether Mahindra does. That I don’t know.

Peter Gilbert
Member
1 year 7 months ago

This abyss, all predicated on electric cars has even lead to Tesla cutting back in China. There is a connection here.
http://finance.yahoo.com/news/exclusive-tesla-ceo-threatens-firings-203915322.html

dcx _310
Member
1 year 7 months ago

Electric coupes such as Tesla are still big toys for the rich in China today.

David Hay
Guest
1 year 7 months ago
The glory days of petrol motorcars is coming to an end. I cannot get excited by Forumula E racing — it just doesn’t excite me on television and I dare say trackside would be even worse. I remember seeing, hearing, smelling and feeling the Jaguars racing around LeMans the year that they returned. The screaming of the v12 and the vibration in the chest as they roared past me down the Mulsanne Straight doing 200 mph plus!!! Today in London they were revealing driverless electric cars that do a monumental 10 miles per hour(to keep everyone safe)and boasted that this… Read more »
GrumpyGriffin
Member
1 year 7 months ago
Generally I feel the same about electric cars, but i have to say that on the Television Formula E looked quite exciting when run on a temporary street track, a fun mix between the dodgems and cart racing, on a full size Formula 1 style track it would not work, to slow and not enough drama, that said i have said in the past that if ever I should be seen driving an electric car could somebody shoot me, however having recently had a close look at a Tesla I was left wondering whether the pension fund would stretch to… Read more »
saabdog
Member
1 year 7 months ago

Sorry, DH, I’m calling BS on your comment about “The glory days of petrol motorcars is coming to an end”. What do you base this comment on?

David Hay
Guest
1 year 7 months ago

Well, I take a long term view. The writing is on the wall for all to see.

I wouldn’t expect everyone to agree of course, but these are my heart-felt personal opinions.

By the way, I don’t much like being called a BS artist.

saabdog
Member
1 year 7 months ago

DH, no BS artist could possibly drive a 26 year old Saab 900! I sincerely meant no offense. Keep the faith — the demise of the petrol motorcar has been greatly exaggerated!

reindeer
Member
1 year 7 months ago

GrumpyGriffin is now the one being positive on SU… amazing

Dave
Member
1 year 7 months ago
hah! i’ve figured it out ! It’s an elaborate ploy by SU to enduce some sort of reverse-karma effect or something to that effect ! In the past, when it was plain to see that NEVS was the wrong path to take, SU tried everything to stay positive and “big up” NEVS where possible… and look where it ended… So now that, by a small miracle, the more viable option back then, has resurfaced again, and it is plain to see for anyone, somebody WITH money AND expertise AND a succesfull trackrecord should have a crack at this….SU is taking… Read more »
Dave
Member
1 year 7 months ago

Thanks for this article Till, Good to see there is still 1 lighthouse beaming in the dense fog of late !

SVAB
Member
1 year 7 months ago
Well if the bankruptcy has dragged on for this long, it probably means the parties are still at the table. SAAB AB’s commitment requirements are way too demanding for Mahindra to ever agree to. So if SAAB AB was unwilling to move, they probably would be liquidating right now. Does anyone have a sense of what kind of PR blow SAAB AB would take in Sweden, especially since they are based in the same town, if it killed this deal, when Mahindra seems like a good faith buyer. The good faith development of one 9-3 platform for one generation seems… Read more »
GrumpyGriffin
Member
1 year 7 months ago

I am still being negative, just now its positive negativity!

Paul Willis
Member
1 year 7 months ago

Ok, I will try again to ask the question: does anyone know to what extent NEVS has access to the Phoenix platform? Are there limitations or restrictions on its use of that platform? I would think this would figure prominently into the negotiations with Mahindra.

hans h
Member
1 year 7 months ago

I am not sure I understand the question. NEVS owns and develops the Phoenix platform.
And it is what NEVS is at the moment; A company with a modern, not quite finished, platform, but no cars to produce.

Joe
Guest
1 year 7 months ago

I believe the bigger question may be; “does the world NEEDanothe platform?”

Paul Willis
Member
1 year 7 months ago

I had recently looked at older articles about the Phoenix prototypes which I believe included GM components, so did not know if GM had any remaining ties to the platform. From what Hans H is indicating, NEVS appears free and clear to further develop and produce the platform, which would be attractive to Mahindra in any event.

phermansson
Member
1 year 7 months ago
NEVS owns all the rights to the Phoenix platform but not IP-Rights on which some technologies developed by GM which has been used on the platform. In order for NEVS to use the platform they need to re-engineer the platform or come to an agreement with GM on the use of those IP-Rights… and so far GM has not been forthcoming in such negotiations. Without the GM IP-Rights, the platform is basically not something anyone can use without putting hundreds of millions of Euro’s into development of it and associated products that would be built upon it, or getting technology… Read more »
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