Unless your F5 key isn’t permanently stuck to your keyboard, you might not have heard that Saab is in talks with three Chinese manufacturers with the aim of an immediate cash injection. What exactly is the Saab management team trying to negotiate? According to Bloomberg, there are at least three goals:
- Get quick cash to restart production
- Gain access to the Chinese market to sell and market their vehicles in a more direct way
- Joint-venture with a Chinese company to produce Saabs in China.
On the first point, Saab has come up with various plans, all of which have either dragged on due to complications with the EIB, GM, or any number of other factors. A joint-venture with a Chinese manufacturer can bring with it an immediate liquidity injection through a sale or licensing of technology. This mutually beneficial arrangement helps Saab survive and allows the Chinese company access to world class engineering, safety, and AWD technology that could catapult it ahead of its competition. If you’re not familiar with the new rules of the auto industry that Victor Muller likes to talk about whenever he gets a chance, they have changed. By leveraging their superior technology, Saab can be a power player in the segment which gives them clout.
While many of you might loathe the fact that Saab might be selling out to the Chinese, lets think longer about just how beneficial such an arrangement could be. On the second point of access to the Chinese market, Saab could immediately have access to a dealer network in China. Companies like BMW, Audi, and even Buick fare extremely well among Chinese consumers because they carry with them a certain mystique and reputation for being better than domestic brands. Saab could naturally stand apart and has a great chance of doing well in China, but without proper distribution channels, they don’t have a shot. By elevating a partner domestic brand in China, they can also help to kill off some of the competition on the lower end of the segment (think Chevrolet, VW), while leaving Saab to compete against premium brands. This lets each company chase their own niche.
On the third point of producing Saabs in China, my stance is that if Chinese production is good enough for Mercedes, BMW, and Audi, it should be fine with us. As much as I’d love my car to originate from Sweden, the truth is if you read a label on a new Saab you’ll see that parts are sourced from all over the world already. So long as Saab engineering and management stays in Sweden and the company keeps its headquarters and spiritual identity in Trollhättan, I could care less where my car is built so long as it trumps the competition in quality and style. If you’ve been keeping track of Swade’s adventures in Sweden over on Inside Saab, you’ll see that he recently attended a meeting with suppliers and engineers that helps cement these jobs in Scandinavia by investing in new innovation for weight reduction. That said, all indications are that any production in China would be intended for the domestic Chinese market, something that makes a lot of sense given that they’re now the largest auto market on earth.
With those main points addressed, let’s focus on just who the background of these automakers.
I’m actually starting in order of who I’d rather see Saab partner with most. At the top of the list is Great Wall Motor Company Limited, more commonly called Great Wall Motor. Last year they produced almost 400,000 cars, 90% of those for the domestic Chinese market. In what is perhaps a nice nod to Saab’s rally history and future ambitions, they participated in the Dakar Rally in 2010. Interestingly enough, they’re also working on a factory in Bulgaria which can produce 50,000 cars a year through a joint venture with Litex Motors. Perhaps this shows just how ambitious they are to partner with European Automakers? If they’d sign a deal with a small player like Litex, imagine what cachet the Saab name carries in their minds.
While they have very little experience in building world class cars (and have actually been accused of copying Fiat and Toyota styles, ack), they have been working with Bosch GmbH and Delphi on new systems, and have confirmed they are in talks with Jaguar/Land Rover to possibly allow them to enter the Chinese market (which would allow production but supposedly only using parts sourced from official JLR partners at first, ensuring top quality- BMW works similarly with Brilliance Auto). They’re also heavily investing in their R&D department, and seem to be taking an active role in trying to transform themselves into a world class brand. Recently they were awarded the title “No. 1 of Top 10 Listed Chinese Automobile Companies” in China (they’re not state owned like BAIC who Saab has already dealt with). Some might say it’s reminiscent of the Korean Automakers 20 years ago, though the changes in the auto industry could mean a much more rapid ascent for the Chinese.
2. China Youngman Automobile Group
I was trying to remember where I had heard of them when I remembered they were involved in a joint-venture with a small start up electric car maker Zap! which once had ambitions to build a small Lotus designed crossover called the Zap-X. Wired has since done an expose on Zap! and discovered it’s a very odd company with questionable business practices, so that initially gave me doubts. China Youngman partnered with Zap! on a venture called Detroit Electric, which also worked with Malaysian maker Proton to create new electric vehicles, which they have some seriously ambitious sales targets (270K by next year?). If they can deliver on their promises, they stand to be an interesting player in the Chinese market.
Up until now they’ve made buses, which kind of reminds me of Saab’s old ties to Scania. I don’t see how Saab really gets a solid manufacturing partner with these guys or a great sales distribution network though.
3. Jiangsu Yueda Investment Co.
This one kind of scares me. According to Reuters:
Jiangsu Yueda Investment Co., Ltd. is principally engaged in manufacture, transportation, commodities distribution and coal mining businesses. The Company’s major products are automobiles, tractors, yarns and coal, among others. The Company also involves in investment, construction and operation of road projects. As of December 31, 2009, the Company had eight subsidiaries and three affiliates, which involved in toll collection and operation of roads, manufacture and distribution of textile products, tractors and coal, materials supply and warehousing services, as well as import and export trading.
They partnered before on vehicle production with Dongfeng Motors on Kia production in the late 90s for Kia, so they’re not completely new to vehicle manufacturing. At the same time, they have a boatload of cash and perhaps it would be even better to join together with someone who serves more as an investment arm who specializes in industrial production (cars, tractors, coal…) than an automaker that wants to raid Saab’s patent pool?
All of these companies have interesting advantages and drawbacks, and hopefully Saab can draw out the best deal for itself from them which will lead to a quick resolution and lead to future prosperity in China. According to a source close to Reuters, “The negotiations are very far advanced and should produce results over the weekend,” so we should be hearing what the results of these talks are very soon.
Saab should very caution with partnerships, it can kill rest premiality of brand.
Great Wall Motor sounds acceptable
“So long as Saab engineering and management stays in Sweden and the company keeps its headquarters and spiritual identity in Trollhättan, I could care less where my car is built so long as it trumps the competition in quality and style.”
Sorry, but I disagree with this statement. There are many examples where companies moved their production to somewhere with cheap labor and less restrictive labor laws. The headquarters and engineering at first stayed at their original home base, only to be moved away after a couple of years anyway. Headquarters and engineering are not something that are as deep rooted in a local culture as the actual production and can be easily packed up and transplanted.
You’re right about the Saab bits and pieces coming from all over the world and sometimes even assembly takes place away from Trollhattan (there is a little plate on my Viggen giving its origin as Finland). But the core, the heart or soul if you want to call it that, is in Trollhattan. I think that is the reason that Saab, even under many years of GM ownership, has been able to keep its own identity.
I don’t even want to discuss what Chinese (and possibly Russian) assembly will do to the build quality. I also don’t want to discuss the use of dispensable labor in a totalitarian state. I just want to say that I would have serious issues with regarding a Chinese assembled Saab as a real and I doubt that it would end up on my driveway.
Which is why I added that 😉 I know where you’re coming from Gerrit, and if cars are built with the same build quality that they are today in China, I don’t want one either. But if they can follow the BMW/Brilliance model, I really don’t mind. As for keeping Trollhattan the center of the company, I couldn’t agree more. -Jeff
Your Viggen is so well built because it’s coming from a true Saab factory started back in the late 60’s with over 700.000 Saabs under their belt. When the NG9-3 cab assembly was moved elsewhere it became a squeaky little bugger that the press was less than impressed with. Talking about watering down quality and image…
+1
No Chinese built Saab will end up on mine either. Sorry, but if a Chinese company part own and/or build Saabs, my current 9-3 convertible will be my last one.
Yes I agree, production must stay in Sweden. If they want to make cars in China for the China that is fine but not anywhere else.
Production stays in Sweden, China production is for China for the forseeable future. Import taxes are huge and that’s why they must produce in China to be able to sell any volumes there.
+1
Many posters here are rightly interested in the thousands of jobs that are directly and indirectly tied to Saab in Sweden. Count me as one. I want production as well as the spirit of Saab to remain in Sweden. If Saabs are made in China, I won’t be buying them any more (I am on my sixth). I say this having worked in China for a number of years, I am not impressed either with the build quality of many products, nor the way employees are treated in the manufacturing sphere. Don’t even get me started on the political side.
One thing we can do as consumers of global products is pick and choose those that represent our values. That is why I have bought Saabs. If you change that value system, it loses (for me) the Reason To Believe.
I don’t think that it will be a problem if there are Chinese build Saabs.
The market in China is so huge that they will take all production.
Just like they do with other cars build in China
The build quality of other European brands build in China is on par with those built in Europe.
There is nothing wrong with Chinese assembly lines if QC is sufficient.
You just have to keep pushing to keep quality up.
I agree that there is a bit Alfasud over building in China. For those who remember it was well designed and brilliant little car but I don’t see many as classic cars today because they somehow disintegrates 😉
I agree that the core of Saab is their engineering and management, but I also feel that it is important that there is production in Thn.
I also remember from interviews with people working at Saab who pointed out that there were many advantages with having the R&D staff working nextdoors to the factory.
Very much agree on that
I think that there is much more integration at Saab than at other manufacturers
I think that it is especially important that the R & D people can test new ideas or discuss them with production people with very short notice.
Great post. Awesome graphic!
DI this morning “SAAB close to Chinese affair”. They think that Great Wall Motors is the chosen one. SAAB is negotiating a “convertible loan” (whatever that is) which can be converted to shares later:
http://di.se/Artiklar/2011/4/30/234435/Saab-nara-kinesisk-affar/
TTELA’ s sources are saying that the negotiations are in the final phase. JAJ and VM were having long discussions last night Chinese time with Great Wall Motors:
http://ttela.se/ekonomi/saab/1.1198730-avgorande-forhandlingar-i-kina
if Saab production, enginnering or any other major part of its operation where to be moved to China I would not but another Saab. I am sorry but I just would not.
Cash injection, fine if they act as investors -fine but a move in operations..that leaves me cold. I love the Swedish kit there’s something about that which could be lost if Saab became Chinese.
I have deep concerns for the future of Volvo for precisely the same reasons.
I have to agree to this…. A few parts here and there are find, but when the majority of parts or the car as a whole becomes a Chinese product, I’ll have to pass. No disrespect to the Chinese people intended… more based on the government.
Beggars can’t be choosers. Saab’s present business model is defunct. I am not sure what you are advocating, if you don’t want a Chinese alliance with Saab. China is, and will be, the center of the auto industry. Sweden can either participate in that auto industry, or not… Lastly, if people do not respect firms that have business / JV in China, then don’t buy VW/Audi, GM, BMW, Mercedes, Toyota or Volvo, etc. Having a Chinese JV isn’t the “end of Saab,” it is the antithesis to the end of Saab. Without a China JV, how would Saab get access to the largest car market… how would it get cash right now… and yet people claim to be Saab fans while opposing its efforts to survive?
I am sorry but Great Wall Motors is known for hopelessly disrespecting IPO rights, as well as a no-holds-barred policy when it comes to accessing “developing” markets. I am very much disappointed that Saab failed to attract further interest and capital involvement from BAIC instead.
just like Geely is for Volvo then. Saab can´t be picky now, it´s about survival, a deal with Great Wall would be excellent if you ask me. Saab production in China would be for the chinese market only, all the others are doing it.
Saab will not stop producing cars in thn, it´s an important part of the identity, more so now than in the GM-era. Victor, rabbit, hat, great work, hope it works out.
I would not be worried about making Saabs in China in the short run. World is chanching and China becomes a bigger player anyway in many areas. And I think within a time it also must be changed too (sometimes hard to believe in this…). So, having a solid co-operate partner there, I think it is a very good thing. We must remember Saab is not sold to chinese like Volvo, it is more co-operation. So from my point of view this might be a very good thing.
please stop this doomsaying 🙂
of course there will be eventually Saab made in Russia or Made in China – I hope so – only way to survive in the long run – it is not possible nor feasable to go through near dead situation every year –
but those Saabs for Russian or Chinese markets (or around)
If Chinese buy/invest/jointventure/whatever Saab they will know what are the values and why people here buy Saabs. they not gonna ruin that. they are not dumb.
I think there will be Saabs made in Sweden for European market, maybe US market and other Saabs made in China for Asia.
Same as with Audis, BMWs but even Skoda e.g. It is common practice.
but thanks to that Saab will sell their total numbers globally which keeps them alive and happy and we will still be able to buy Sweden made Saabs.
Same as in EU you buy Skoda made in Czech Republic but in Russia, Ukraine they come from russian plants.
No big deal.
Desperate times call for desperate measures! Cooperation with a Chinese manufacturer can be just positive for a small player on the automotive market like SAAB for a number of reasons:
Firstly, SAAB is in desperate need for fresh cash. Money that VA is thinking to bring in is just peanuts. SAAB needs cash to start up the production. Also, which is more important long term, they have to get rid of GM and EIB, and if Great Wall Motors can help with that they are just welcome.
Secondly, after the production stoppage SAAB look like a weak car company at the brink of bankruptcy for many potential customers. This must be changed ASAP. Otherwise I would be surprised if they sell more cars then last year. A cooperation with Great Wall Motors, with substantial financial backing, can change this image.
Thirdly, production of SAAB cars in China is just positive. China custom laws stimulate domestic production, SAAB cars becomes cheaper for Chinese market and therefore much more attractive. Also a wide dealer network in China wouldn’t be so bad.
Also I don’t think that Chinese companies are that stupid to just move the total car production to China. They know that it hurts the image of the brand in the world, not to mention the initial costs of such move. Also they can just gain of having design and R&D in Europe, if they want to attack the market worldwide. SAAB R&D could also be R&D for the Chinese brands, making their cars more attractive.
BAIC has been telling a number of times that they are not interesting in closer cooperation (or even acquiring) with SAAB, they have got what they wanted. Great Wall Motors is just welcome if they want to invest money and have a close cooperation with SAAB!
Well written! thank you. Exactly
Since Wulf has already mentioned the Assembly in Denmark over at SaabWorld, I know that it isn’t the first time Saab had cars produced outside Thn.
For exactly the same reasons as the reasons for production in China:
Lower taxation and lower work costs.
We did actually in Denmark become the second largest market for Saab in 1962, overtaking US, simply because assembly in DK meant that taxation was 10% lower and labour costs were lower, resulting in a car that more people could buy.
Which they did
We actually exported 1100 cars back to Sweden 😉
They did the same thing in Uruguay on a much smaller scale, also because of import Taxation.
And in Belgium they did the same thing
And recall the the Belgian-made 99s, which were sold world-wide, had a reputation for poorer quality build and materials. The less and less control one has over the product and its associated equity, the more opportunity to not only dilute the brand, but create negative equity.
Maybe. And the Danish assembled were of higher quality.
Or rather had a reputation for it. It was the importer who ran the operation in both places.
The Danish assembly was SKD, so it was basically just a car in parts to be assembled.
But control was strict, and the importer keept a keen eye on all problems.
Also the cars were only sold in DK and SE.
The Belgium assembly was CKD.
And the cars were exported.
I don’t think any of this matters today, as QC is the only thing that separates the building locations
I second that Iggy. There is nothing wrong with having plants and co-operation on different continents (for respective markets). That’s what made the Japanese so successful in NA.
As long as the mothership and R&D -again Scandinavian Saab Saabs- stays in Sweden its a win-win situation. There’s nothing wrong with building 9-4X on the other side of the pond either, if its profitable.
For Asia it definately has to be the right partner from the get go, but I’m sure VM and JÅJ knows this better than anyone.
Well said. +1
Guys, do remember we aren’t talking of building Saabs in China here. This would come in a longer run, and BAIC is the ideal partner here, since they already will build the old Saab Epsilon. SAIC could build the 9-5, as they already build the Buick LaCrosse, which is a technological twin.
We are talking of selling the brand new, super-duper Phoenix platform (since the older gear was already offloaded to BAIC) to a manufacturer of low-rent copies of cheap European and Asian cars and SUVs. If Saab could boast that the Phoenix is shared with Jaguar, BMW or even Alfa Romeo, they would have quite a PR argument. Knowing that the same (even if cheapened and deprived of gadgetry) platform can be head in a Great Wall Pardon or whatever they decide to call their new car would be a disaster.
Why?
At the moment GM is about the same status, so we are already suffering from bad press over that
Ups..In Europe that is
I am afraid I didn’t get your point… What is GM doing in Europe that is equivalent to selling their upcoming premium car platform to a low-rung Chinese manufacturer with awful reputation?
Opel 😉
huh???
Opel is a low status budget brand, known for cars that rust away.
May not be the truth at the moment, but the Brand is tainted by that.
No prizes for guessing who got to introduce the Epsilon Platform first in EU.
I think this is your personal impression, I believe they are a long way from Great Wall.
Ever heard of Ignazio Lopez?
He singlehandedly destroyed Opels reputation by pressuring Suppliers, resutling in Rust, Broken engines, and general lousy quality.
It was ages ago. Insignia was the best-selling car in the intermediate class in Europe when launched. It sure owed a lot to customers buying it to watch it rust away.
At any rate, don’t compare Opel to Great Wall please. Over and out.
Bravada, where and when was it ever said that they will do any such thing? I think you’re jumping to conclusions here, as nothing of the content of the agreement to be struck with a Chinese partner has been revealed here. Please let’s all just keep cool untill an agreement is anounced, and react to the content of that, instead of our own possibly misled assumprions…
I believe it was mentioned explicitly that they are exploring opportunities to license out the upcoming Phoenix platform. There is little else to license anyway, BAIC already holds the rights to all the older gear (which nixed Antonov’s erstwhile pie-in-the-sky plans of building Ford-Focus-priced old Saabs in Kaliningrad), and the 9-5 and 9-4X have too much GM’s IP for Saab to be able to license them out. They also don’t own any powerplants’ right anymore.
I think selling Phoenix is the only way to survive. Not producing carcompany is dead. Simple as that.
With production running, with chinese partners, with saab produced and sold in China, there is no obstacle to develop next platform/powerplant and whatever saab will need or be good to sell.
Being technology producer, R+D high tech center working for other is the only way to survive as car manufacturer as well.
I wrote it before – Lotus does the same. Developing high tech for others (not licensing old stuff, but licensing very new stuff) and making their own cars too.
Small company, previously owned and nearly killed by GM, legendary heritage, strong human resources, tons of talent and severly near closing experiences.
Now under ownership and money from Malaysia, they are coming back ,looking stronger than ever.
similarity cannot be overlooked.
I think Saab can do the same. And it should.
Lotus can be inspiration and their business model is one to follow.
Lotus is a different kind of company when it comes to product, and when it comes to outright product licensing, they also have much different customers than Great Wall…
They also have the security of Proton (a state-owned company that’s “too big to fail” even if they are doing everything to actually do so) supporting them financially and giving a steady stream of engineering work.
All in all, I would love Saab to become something like Lotus, the industry’s secret skunkworks doing the intricate jobs for the bigwigs, while building some great cars at attainable prices for the ones in the know. I am just not sure if selling out to Great Wall is a good first step in that direction.
Couldn’t agree more! Sorry for saying this, SAAB is in coma right now. Not a single car has been produced for three weeks. SAAB needs a miracle! Great Wall Motors might make that miracle true!
Comparison with Lotus is 100% correct! SAAB can become a R&D company, making cars for a people with delicate taste. Of course, I hope that the will be selling cheaper cars in bigger numbers then Lotus.
Bravada,
Do you think BAIC is the ideal partner just because of the relationship they have already? Wouldn’t it make more sense though to deal with whoever is going to give you the most to be a partner? If you protect yourself legally, not much could really happen without Saabs consent, no?
Very well written Jeff, as usual. A Chinese partner would be very good for Saab, and perhaps even crucial. Saab production in China is necessary to reach high volumes there (due to high import taxes) and I don’t see it as a problem as long as those cars are made only for the Chinese market. If Saab’s headquarter, engineering department and main production stays in Trollhättan, Sweden with extra production in China only for the Chinese market, I think it is a good deal. Perhaps it is even likely with initial production in Sweden (including car body welding and paint shop processing) and final assembly in China.
If Saabs will be built in China, they will be built for the Chinese market. Why is everyone being so negative here nowadays? This is great news!
So long as it stays that way, it is indeed “great wall” news 😉
I think most people agree it would be great news but most of the disscusion is relating to this quote as many of us wouldn’t be happy if only engineering and management stays in Sweden (not that this would happen)
I might be missreading the quote but it seems as if global Saab production is what the auther was refering to.
Yes and no, I left it open ended to see what the reaction would be actually, playing devils advocate. In my ideal world, Saab would stay 100% Swedish and only produce cars in THN. We know that can’t be, and that it’s an incredibly simplistic way of looking at how the auto industry works today. Saab is in quite a bind financially, we really have to wake up to that. If their last resort would be making them in China for other markets, and that was the only way I could get a new 9-1 for instance, I’d be okay with that. My iPhone was made in China, so was my MacBook Pro. They’re the most well made products I’ve ever owned. If the only way Saab can avoid a shutdown is to follow that example, I’ll cringe a little, but I’ll still buy a Saab.
If they shut down their THN headquarters…that’s another story.
I love both my IPhone and my MPB, but I don’t drive my kids to soccer practice in them.
Wills saving Saab mean resorting to cheap labor from companies propped up by a repressive government?
Great Wall Airplane…. 😉
Saab 9-4x is right now being made in Mexico.
Saab 900 was once made in Finland.
Saab 9-2x was made in Japan.
Saab 9-7x was made in the US.
If saabs were made in China, it wouldnt be such a big deal.
Saab will always have production at home if it wants to be
a premium brand.
And more on that list: 96, 99, 9000 and 9-3 were also made in Finland. Every Viggen -> from Finland, Convertibles ->2003, from Finland. At the same factory where they´ll build Fisker Karma etc.
It´s not so crucial where it´s been built, but where it´s designed and originated, that´s what count for me.
The Finnish plant also made the Porsche Boxster. I don’t foresee Porsche making cars in China as it would definitely damage the brand. Many here are concerned that :
‘So long as Saab engineering and management stays in Sweden and the company keeps its headquarters and spiritual identity in Trollhättan, I could care less where my car is built so long as it trumps the competition in quality and style.’
– Means Chinese SAABs for the world. Many of the current owners would not agree with this statement.
Then everyone is reacting to the words of Jeff, which is just a statement of his opinion
Correct – the comments posted here relate to the story that Jeff wrote above. Which is why people are expressing their opinion of his opinion.
“I don’t foresee Porsche making cars in China as it would definitely damage the brand.”
http://www.pistonheads.com/Porsche/default.asp?storyId=23033
Lets hope that VM and JAJ came home with an big deal….. that would be great news for Saab to have a strong partnership with a chinese carmaker with enough money… and strong dealership in China……… in my opinion thats the only way to survive ……….. the combiniation with money from China and Money from Russia… is the right way for Saab.
Volvo gets Money from Geely……… Landrover was bought by Indiancarmaker called Tata…why shouldnt Saab make a deal in China…
I think Saab will also produce cars here in europe to hold up the premiumimage for the europeanmarket………
I am totally on board with thinking outside of the box to raise capital. No problem. But be careful who fills your wallet. I fear that if SAAB has one more hiccup and the Chinese are involved, well let’s just say there cannot be another hiccup.
Going to China to sell out technology is what every other guy on the corner would tell you. This surely doesn’t count as “outside of the box”. It is more like “panic mode”. Either way, I would like to see the assembly line going again, JAJ coming back from retirement and some ACTUAL outside-of-the-box thinking in practice (such as the central location of the ignition key).
Sometimes i wonder if it wouldn’t have been better to break up Saab into smaller units (still doing operation for Saab) but becoming more or less a self-operated unit.Much like Porche have done with its engineering,design companies etc.
Take for instance the after-sales operations. Break it down even furher,training or warranty.These units could have attracted more customer than Saab by selling its expertise and know-how.Run other customers in the same systems etc. This is a fully viable solution.Why do Saab needs to go bankruptcy so other companies can get hold of the persons behind it? Same goes for Geometrical analysis and tolerancing as well as logistics and lean-production and the list goes on…
This could have attracted much more of the Swedish investment/risk capital because then the boundries would have been much much more defined. You dont need to invest in running production but in IT-strategies for vision systems for instance. There are so many companies out there (binar etc) that has a spin-off from Saab that currently is doing just fine. Too bad they couldn’t stay within the Saab-sphere but had to break out and becoming successful on their own.
how Holden gets help from the taxpayer
http://smh.drive.com.au/motor-news/holden-profit-made-on-the-back-of-taxpayers-20110428-1dxfy.html
great wall motors has sold 10000 units in Australia in 18 months [figures saab would die for]
As long as Saab stays independent and in business, it cannot possibly be worse than being owned by GM, right? =)
How “independent” would Saab actually be if it was heavily subsidized by a Chinese company, which in turn is heavily subsidized by the Chinese government? Any new plants would be financed by low or no-interest government loans and built on land acquired via government influence.
Any IP, whether in product of manufacturing, would be instantly lost.
Be careful. What happens if SAAB does not reach goals that will be established as part of an agreement for funding? Don’t think for a minute that any Chinese company would not come to THN with the tractor trailers, pack everything up that is not nailed down and ship back home. There will be no long, drawn-out discussions of winding down or seeking another buyer, but just some empty buildings left that once produced the cars we all love.
That still depends on what the contracts say.
If we are talking about cooperation on future technologies, then Saab is still left on it’s own to survive, but with a little more money.
If VM is looking for a long-term financial solution – which is what he has indicated (VA’s stated contribution of 30MM euros (29.9% ownership) is peanuts for a car company), then you can imagine that significantly more investment with result in a larger or even majority share being held by any Chinese entity (they could even conceivably buy out GM’s share) . The result would be that the new Chinese owner would have the power and right to make decisions regarding the companies future.
I don’t think the funds generated via licensing of future technology will be sufficient to give the economic security that SAAB needs now. I suspect that we are talking equity, however all is speculation until something is officially announced.
As independant as the contracts are written up.
Why should the IP be lost?
If you have ever lived and worked in China, as I have, you would understand that even the best written contracts are worth virtually nothing if a Chinese company, operating in China, wants to do something their way. Especially the ones who have paid the right bribes to the right government officials. The Chinese legal system, such as it is, will chew up and spit out anything it does not like.
I have not livid in china.
I have people for that 🙂
I am also pretty sure that IP protection legally in China is not very good
Nonetheless I have worked with chinese partners and suppliers on development and manufacturing of new technology since 2001
We have been able to keep our IP prortected, mainly due to the fact the it was in common interest.
I think the same thing would apply to Car manufacture.
And for those worried about quality: If you keep QC up to specs, the products are great
BTG88 nailed it: IP protection in China is laughable.
Chinese-built Saabs for the Chinese market would be fine if it means Saab’s survival, but knowing that the Saabs available to me in the USA continue to be built in Trollhättan means everything.
A Saab needs more than a link to a vaguely-Scandinavian heritage or spiritual identity (even the 9-7x and the 9-2x had that) – it needs to be be designed and built by Swedes for Swedes in Sweden.
Of course, as GerritN and others pointed out, there were established Saab models built in established Saab (or Saab partner) facilities in Finland, Belgium, and Austria in the past, but that seems like a far cry from Chinese automakers building Saab-branded cars in China.
This is a difficult question. I really want my Saab to be made in Sweden, or maybe Finland, or maybe even Austria if its a convert, but I’m even wondering about a Saab from Mexico, let alone China. Maybe there’s a middle way: 9-3s and 9-5s in Sweden, 9-4s in Mexico, and 9-2s in China?
Then you think about Apple, undoubtably an American company. Where are their MacBooks made? Who knows, probably Thailand, or Korea, or CHina, or Maylasia, or a combination of all of them. But what do you first see when you open the box? A tab saying something like “Designed by Apple in California.”
Apple is always labeled ” Designed by Apple in California”
Their products are always Made in China, actually at one of the worst manufacturers, with regular suisides, environmental problems and different sorts of chemical poisoning of workers.
That is widely accepted or ignored by all the people who regards Apple as the biggest thing in design and usability, and is never questioned
Probably a lot of these people are the same that are worried at the outlook of a Chinese investor in Saab
The only way I will continue to buy a Saab is if they remain independent and are not made in China.
Flame me all you want. I won’t buy a Chinese Saab. This is coming from a very long term Saab customer. All my Saab’s were bought new.
I never think you will have to.
The Chinese market is big enough to swallow up all cars made there.
The most probable solution is production in China for the Chinese market, because of al the import taxes on foreign cars there.
Russian production for the russian market.
Mexico production for the SA and NA markets
Swedish production for the EU markets, and some production in Sweden for the NA market.
Bottom line Saab need investment and fast if it wants to survive…the current line up looks good [the 9-3 interior is a let down, the 9-4x looks a winner as does the 9-5 sport combi], time for nit picking and choosing is over, saab needs car buyers more than anything else…
When GM was closing Saab down, they sold all the tech stuff for the old 9.5 to china.
What’s happened to that & did a chinese built 9.5 ever happen?>
Yes and no
There is a BAIC car on the basis of the old 9-5 and the 9-3 up til 2006 + one coming on the basis of the OG9-3.
None of these are branded Saab
In a way – the Buick Regal (Opel Insignia) and Buick LaCrosse, which are being built in China, have been developed out of the Saab 9-5 project, which was originally to go into production around 2005 and was the original of the Epsilon II platform. This is why it was so easy to ponder moving the entire tooling to China and just start production there, most of the supply chain was already in place.
Partnership with a Chinese company : Not a problem.
Selling Phoenix technology to the Chinese: Unfortunate, but probably unavoidable in the circumstances. As long as the knowhow and future development stays in Trollhättan, then OK.
Manufacturing Saabs in China for anything other than the domestic Chinese market: Completely unacceptable.
+1
…except that I do not personally mind if Chinese built Saabs were sold, say, in Korea, but I really really want Trollhättan to build the Saabs for thisend of the world. Not all Swedes thinks like that, rather buying some cheaper car built in some low-wage country, but for me, the factory, R & D in Trollhättan is one of several important reasons for buying a Saab.
i cant belive that in China built Saabs were sold here in Europe. if this will be part of a cooperationdeal between Saab and Chinesecarmaker..
……………………………. in my opinion the journey from VM and JAJ is only for collecting money for a longtime financing SAAB here in Europe…. there some medias posted that they will sell Phoenixplattform technologies to a Chinesepartner … but no one said or have written that saab woud transfer the production from there Products from Europe to China , please keep calm
if you are unhappy with Chinese money then the game is up… the majority of the worlds car manufacturers are enjoying record sales and profits post GFC, Saab has used up all its goodwill and management need to move on or declare insolvency… the new post GM efficient Saab needs to start breathing…
Too much speculative thinking, Jeff. Too much worry, too.
If a Chinese or Russian car company invests money in Saab, it’s unlikely that the company will cease building Saabs in Trollhatten, either immediately or possibly even ever. Immediately would mean a loss of short-term production (income) for the investor. Closing Trollhatten down the road doesn’t make sense either. The Saab factory in Sweden, thanks to the huge investments made by GM over the past umpty-ump years, is a state-of-the-art facility staffed by able car designers, technicians and assembly line workers. In addition, many of Saab’s component parts come from nearby manufacturers.
With any luck, a Russian or Chinese investor will follow the Apple business model, i.e., continuing to design Saabs in a place (Trollhatten) where the ethos of the brand is deeply ingrained but manufacturing them (manufacturing them to the highest standards possible) in multiple locations, including Trollhatten for Saabs destined for the European and American markets.
But we’ll see what happens, won’t we? At the moment, as Swade used to say, all we can do is remain calm.
+1
I agree with you Curvin, I’m just trying to prepare the community mentally for the inevitable. It’s not the end of the world if Saab partners with an Asian company if it means Saab gets to live another day. Smart negotiations and terms are crucial, and I have confidence in Victor and JAJ to pull it off.
Jeff,
How about the fact that if they do this deal and some Saab’s over time are made in China, is there not the possibility that those Saab’s would be for the Chinese market? More than one manufacturer has made the same type of car in more then one place for different markets. I don’t see this deal as a bad thing, I see it as a life line to Saab and reading comments on here of fear and speculation makes me feel like we’re no better then the lovely Swedish media. Just like them, we are going to a form of print in this website and voicing fears and concerns that may be unfounded. Let’s leave the speculation for others.
Part of my reasoning behind this was to get all of the fear and commentary about Chinese production being the end of the world out of the way, since it’s going to be inevitable. Rather than wait for a deal to be announced (as all indications have been that Saab will have a deal done with a Chinese company very very soon, some like DI even say this weekend), I want people to settle with the idea that Chinese partnerships aren’t the end of the world. In fact, they’re necessary in this global automotive climate.
I might have gone too far by suggesting that I’d be okay with a Saab built in China, but it’s really just my opinion, and I’m completely fine if others don’t share it. If there’s absolutely no way to distinguish between a Chinese and Swedish made Saab other than a window sticker that shows final assembly points, and it allows Saab to hire more workers in Sweden and stabilize the company, then I’m good with that. There’s almost no chance that if Saabs were to be built in China they’d be sold anywhere else besides their own domestic market, so there’s no reason to even worry about this as a possibility. By raising the possibility, I was merely suggesting that people open up their minds to the idea that China is transforming rapidly and shouldn’t be so looked down upon. While I’m appalled by their human rights violations, I don’t think the way to help them move away from those policies is by isolating them, instead I think the eventual rise of a middle class in China will lead to the inevitable transformation of their government.
This isn’t a seminar on 21st century Chinese politics though, it’s about Saab becoming a prosperous and thriving independent automaker. The goal is to keep Saab as a Swedish company, not transform it into some Eastern conglomerate. However Victor, Jan Åke, Vladimir and their team feel that they can get there, I trust them to make the right decision, Chinese partnerships and all.
Jeff,
My point about using print like this on the web and fear and speculation was not pointed to you but to some of the comments on your post. I get what you’re saying and I agree, I think people need not fear what they don’t know and wait….. Wait for real answers, don’t say “I’ll never buy a Saab if they are built in China” like you said, it will probably never come to that.
Gracias Jason. I’ve read most of the comments, but not all yet. Trying to enjoy my weekend 😉 Your doomsday comment was funny though, there are some real nuts out there.
I definitely want to just get all this crazy ranting out of the way before the actual announcement is made. Let people vent their frustrations now and get used to the idea that Chinese involvement in Saab is actually a good thing for Saab in the long run 🙂 Enjoy the rest of your weekend! Go Canucks! (Sabres are out, tear).
IF Saab survive, then there has to be a BIG market in assisting other manufacturers develope their ranges.
LOTUS was quite successfull at this, although GM swolled them too, at one point.
As usual in this corporate domenated world the Banks screwed it up & we (and the likes of Saab) have to pay the price (although GN’s handling of Saab’s ownership was less than satisfactory).
I can remember an article in one of the UK motor mags,some years ago. that was sarcasticily headed towards GM….it headed “GM should remember they own a company in Europe called Saab”.
If Saab becomes owned by the Chinese, my current Saab is my last Saab. I just will not buy a car owned by or made by the Chinese. The country is Communist, extremely repressive. I assume the other companies you mentioned are producing cars for the Chinese market. That is fine. The Chinese put antifreeze in toothpaste because it was cheaper. They poisened dog food because it was apparently cheaper to make that way. I spend time in Florida, where they are dealing with Chinese made dry wall that is wrecking their houses. It is virtually impossible not to buy Chinese products in some cases. But I can make a choice on the car I buy. Chinese will not be one of them. I hate that the US has to deal with them at all. But that is topic for a different forum.
There is no sign that SAAB will become chinese . They only will sell technology,or other investments. It was only mentioned that in future you need a joint venture in china to produce cars for the chinese market because of the high import taxes. So chinese SAABs in Europe were pure speculation.
I agree with Bravada; BAIC or SAIC would be interesting partners. Perhaps BAIC is just waiting for the ship to sink in order to pick up SAAB for a handful of SEK?
I´ve seen Chineese factories and the ambitions of China and Chineese engineers on spot.I would never underestimate the ambitions of the Chinese.
Another important fact: A Chinese company will hardly get necessary government permits for an investment in Swedish SAAB, unless this company also is allowed to export the products produced in China to markets of the Chinese SAAB-producing companies own choice.
Chinese companies today makes the rules in China, not foreigners. This means that if SAAB can not make a deal with a Chinese company, unless SAAB admits the cars produced in China to be sold all over the world.in the future. It may take ten years or more for these Chinese cars to have the quality necessary for sale in US and Europe, but they will come, just like the Japaneese (andSouth Korean) cars did decades ago. It might take ten years, but they will come.
On top of this, the Chinese company, also has its government to add pressure on SAAB, since the government have the means to delay necessary approvals for investing in SAAB, and thus force SAAB into bancruptcy.
I also find it unlikely, that a Chinese company would not already now secure its future possibilities, to (at a bargain price) take over the ownership of SAAB in Trollhättan from Spyker, IF THEY DECIDE TO INVEST, Chinese are tough businessmen and hardcore capitalists (at least compared to many European businessmen), Since SAAB is in a desperate situation, and running out of cash, the Chinese will try to get as much as possible for minimum money.
China today buys (if possible) ADVANCED know-how in Europe (like Volvo), not simple products. (I was astonished that GM could sell old SAAB platforms to China, or was that a minor part of a bigger GM-China deal?)
A Chinese takeover of SAABs advanced know-how might also be stopped by EIB and GM, since this might be a violation of the terms for the GM sales terms to Spyker and the EIB loan to SAAB.
Nobody knows what is happening in China, but certainly this is a delicate situation for SAAB to handle. My guess is that all parties GM, EIB and the Chinese government, must approve an agreement, if sales of advanced SAAB technology to China is involved.
I.
Perhaps one reason for parallell negotions with three different chinese companies is to play them out against each others, thus gettting better conditions in whatever contracts that finally are signed?
1 and 2 are ok.
Production of Saabs in China are ok as long as they are for their domestic market. BMW makes cars in many countries, including for the domestic markets of Egypt, China, and India. However, if Saabs are built in China for export, I will not buy one. This is not a racist opinion because I will buy a Saab if made in Taiwan (officially called the Republic of China) or if made in Singapore (which has a 75% ethnic Chinese population). Thailand makes a lot of cars. Thais are not Chinese but I will buy a Thai car.
The reason is ethics. Chinese in China will put poison in your food to make a profit (remember the milk deaths and the heparin deaths?) but Chinese in Taiwan and Singapore don’t do that sort of thing.
Chinese companies will try to steal technology. They did that with airplanes. First, disassemble the airplane. Anyone can do that with cars. Then license build it, like the McDonnell Douglas MD-80 to learn how to manage a production line. Next, get foreign suppliers to build key components but to self build the plane (like the 919 to compete with the Boeing 737). In the future, develop and build an entire plane, including components.
I think along the same lines as many here, that Chinese production would likely be limited to cars for their market. Having said that, there are many examples of award-winning production facilities outside of their home countries. Toyota for example has a couple of factories in the Toronto area. The Corolla/Matrix plant in Cambridge has won many awards for high quality assembly and production efficiency. This is mainly because the procedures are duplicated from the Japanese factories and run in exactly the same way. With this same kind of oversight from Saab, perhaps it is possible to have a Chinese built Saab that is every bit as well-made as its Swedish version?
No worries here for me. Bring it on. Let’s start the line rolling again ASAP and stop speculation. I heard that one day the sun will burn out, but I will worry about that later.
Paddan,
I hear lots of crazy things everyday. There is a group in the US that is trying to tell people that based on a math formula, that judgement day is coming on the 21st of next month, don’t think I’m going to sell my house and buy a bunker just yet though.
LOL!
Sad thing is I’m not even joking, I’ve seen billboards. They call themselves Family Radio, the “leader” from what I understand predicted this before too and was wrong. You can almost look at anything and see similarities, people seem to think they know everything about everything and are far too often ready and willing to push their idea’s on everyone.
Well… I’m thinking of going to the US this year, and I’d be very frustrated if that May 21st 2011 Judgment Day creates any impediments, like me being sentenced to Eternal Damnation or something like that 😛
Pedro,
Can’t make any promises, but I’m pretty sure you’ll be alright…lol
For you, Pedro, I’m sure the Apocalypse can be delayed a day or two.
the only thing i dont understand , why is Saab not speaking with Companys or FONDS(Merbanco, Genij,Bernie Ecclestone , which in times of the Shutdownporocess by General Motors were….. interessted to buy SAAB…. now as an new Solution to invest in the Future of SAAB……
Don´t forget that in the moment every new owner has to be approved. SAABs only chance to have more flexibility in funding is to get rid of the EIB loan.
And to your other questions. Bernie Ecclestone was Showpony of the Genii group. And don´t forget that there is a connex betw. Antonov and the Genii group. Vladimir was always in the back of the Spyker bid.
And Merbanco ?? GM had a reason why they stopped talking with Merbanco. If Spyker needs more money now – why should merbanco do it better.
Please all be calm and stop speculations. Victor and Jan Ake are not in china to sell SAAB. They make a deal for techsharing or investment in SAAB in R&D projects in future.
A joint venture building Saabs for the chinese market is not the short term goal SAAB needs now. But “assembling” SAABs in China for the home market is the only way to get really profit.
As you know import cars were high taxed. If you have a chinese partner assembling your car you don´t have to pay those taxes. So it´s the only way to sell there high volumes.
And don´t forget that the BAIC money made SAAB profitable in 2009 :-). And this money allows the losses now.
I have been very busy recently to follow much of what is going on. I am sure something will happen soon but what I dont understand is why people say that they wont buy a Saab if it were a Chinese owned company. Quite possibly the silliest thing I have ever heard. We buy oil from Saudi Arabia and they are one of the most repressive regimes on earth and treat women like dirt. This is Saab’s last kick at the can and if the current situation isnt solved soon its over folks.
I find it amusing that of all the crazy things going on in the world, the silliest thing that you have ever heard is refusing to buy and car owned or made by the Chinese. As I said in my original comment. There are a lot of things that I don’t have a choice in. One of the things I do is what type of car I buy. I would choose not to buy Chinese. If I could choose where my gas comes from I would.
saabowner,
What brand would you buy then that is not represented in China? Most car companies are now there in some way, shape or form.
i said that I would not buy a car that is owned or built by the Chinese. I have no problem with Saab building cars in China and selling them there. I would not buy one if it was built there and sold in the U.S.
You contradicted yourself there, saabowner.
This wouldn’t let me reply to your comment. But i disagree that I contradicted myself. I said that I would not buy a car that was built or owned by the Chinese. If in order to build cars in China, the Chinese have to partially own the factory. As long as that car or cars are not imported to the US, I don’t care. However, if they buy the company, like they did with Volvo. Or they build cars in China and bring them to the US, I will not buy it. If the parts content information on the sticker lists China, I will not buy the car. On my car, I know that 23% came from Sweden, 37% came from Germany. The Engine came from Germany and the trans. came from Japan. If any of that stuff shows China, then it is not for me. I know that I have no way of knowing were every single part came from. But, if I can determine, I will.
True! VM would not like to lose control over the company he has been fighting for. But on the other side, you think the Chinese would just buy a promise of a future platform, which doesn’t exist today, except in the PhoeniX prototype? They need a better assurance, and a piece of the company is such.
So, Great Wall Motors, or whoever bites, will most probably be a part-owner of SAAB. Everything else would be strange.
They can´t be part owner now. Every change in ownership has to be approved due to the EIB loan. It takes one year to get VA in – so bringing chinese in ….
be realistic and summarize the facts.
That is true, They can not be a part-owner now.But the rumors are saying that the Chinese company will give SAAB a so-called “convertible loan”, which is a loan that will be converted to shares later. That loan must not be approved by anyone and is a way to go around the EIB-GM hinder.
Also GM has already tipped that hey want to get rid of the SAAB shares (for the good price) since they have no interest in SAAB at all.
The ultimate goal is, I suppose, to get rid of both GM and EIB, which is probably not possible now but will be later, I hope.
Conclusion is for me , i am open for a chinese part owner. But more than 50% have to be in european hands.
I’d buy a Chinese made Saab, but only under the following conditions:
– engineered in THN
– strict QC in place, with THN bods on the ground overseeing production
– priced significantly lower that the equivalent THN produced vehicle: I’m thinking around 20%-30%. A 9-3 Linear BioPower sedan in Australia is around AUD$50k. I wouldn’t spend $50k on a Chinese made vehicle, even if is a Saab. However, I would spend AUD$30-$35k if the quality was right.
That said, I don’t believe Saab would dilute their brand by allowing Chinese made Saabs to be sold outside China. And, as many commenters have pointed out, to get a look in at the huge Chinese market, local production for the domestic market is mandatory.
I’m cautiously optimistic.
This is from gannet and I could not have said it better. I think we have to see it this way. If Saab will come to a good position and stay alive we must find a new way and I am sure thn will forever stay as the heart of Saab and with a factory. Keep on SAAB! Stay alive!
What makes you guys even think Chinese company won;t wait unti it’s all over, then pick upo the pieces like they did Rover?
While you guys are still arguing wether you would buy a Chinese made Saab, (no doubt, some of you posted from your CHINESE MADE iPhones), the Chinese are no doubt working out the best way to seal THEIR side of the deal. If it’d mean waiting for Saab to go bankrupt then they would.
So yeah, arguing Chinese made Saab is a moot point when you don’t even get past this short term hurdle.
On point of BAIC vs Great Wall. I can tell you most Chinese regards GW higher than BAIC, which really are very Shanzai (look up that word, you will hear it more often) indeed.
GW has been selling utes in Australia for almost 2 years now and the general reviews are quite favorable.
Why would BAIC be even regarded “shanzai”? I am quite puzzled.
At any rate, BAIC is a financially well-supported company with little engineering and design resources and solid management. GW is on a roll, muscling their way with a no-hold-barred policy and having become a rather mature operation. BAIC seems to need a thriving, independent Saab to outsource the capabilities they lack to. GW only needs somebody to take some more advanced tech from whenever it’s cheaper than develop it in-house (and they know how to do it without even paying for it), and would perhaps like to purchase the Saab brand from the liquidator.
Here’s what it could look like: 🙂
http://andyrupert.com/2011/04/30/victor-muller-it-all-just-happened-so-quickly/
Douze points! :ROTFL:
You should be banned for that!!
😉
Gentleman! It`s time to stop talking about where the next production would be born .
We must know that the key word for SAAB now is ” survival “.First SAAB must be alive.So get loan or get money is the first step.Then SAAB will get stronger by selling a large amount of cars.There is not much doubt about chinese market is the bigger one for SAAB .I trust VM and VA all knowing this .As where would SAAB`s next car be producted is perfect i agree with the point “sonett71″said.Everybody can see what BMW or Benz even AUDI did in China in the past few years.Though they didn`t let all kinds of there cars manufactured in China.But their sales data rose up.If they were right .why doesn`t SAAB do something near success ?