UK business school researchers on what killed Saab.

Interesting reading from Researchers Matthias Holweg University of Cambridge/Judge Business School and Nick Olivier University of Edinburgh Business School.
A 40 page report read it here:

42 thoughts on “UK business school researchers on what killed Saab.”

  1. I ve read this, in summary some valid points but most of it seems to be waffle, but thats just the writing style i guess. Plus this must have been written fairly quickly.

    More importantly the ‘facts’ in this report seems a bit blurred, especially about the losses in 20 years except blah blah blah… I would like to check the references when i have more time. Otherwise very interesting read.

    But i dont agree with their conclusion, for me I would draw failings of SAAB into some percentages as follows:
    1. 15% SAAB failure (includes management/vehicles/marketing)
    2. 40% GM (obvious where they are!)
    3. 35% SweGov
    4. 5% EIB – bunch of wallys really
    5. 5% Customers- like my self and others who really should have bought a new SAAB but waited for the SC…guess i will track down a NG9-5 saloon.

    Feel free to disagree, ill be interested what others think!

      • agreed however i think the buisness plan needed some structure and support from the others who rightly or wrongly did not corporate. Maybe 15-20% is suitable. However as i stated in another post i honestly do think that VM has done this for SAABs best interest, he must have a reason for bankruptcy other than no money to run a company. Im not mystic Meg or anything but something tells me that one of his ‘friends’ may just swoop in recover this company without the GM addons…and im not talking about YM.

        • I’d probably go more than 20% in terms of responsibility, but this was a huge undertaking so it is hard to be critical of the people who tried to make it work. It would be great if your mystic qualities turn out to be real.

      • Their business plan hinged on a certain amount of growth each month. This was achieved.

        However the delay due to GM starting the liquidation prior to Spyker taking over caused a delay that helped seal their fate. The April 15th decision by EIB put the final nail in the coffin.

        What else could Saab have done given those circumstances..?

    • I find this split of the blame laughable. Surely you are pulling our leg(s) 😉

      15% of the blame on management???

      Prior to Muller taking over 100% was due to GM.

      Following takeover SAAB management has all the blame. Nobody gave up on promises made to SAAB. It’s Muller’s responsibility to know what is going on, and his responsibility to make sure the numbers add up. And they didn’t.

  2. To get the report, go to to get to the general school website, and then follow the links. The fundamental conclusions are pretty straight forward …
    1. Niche vehicles by definition have low volume potential and must command a higher price to be profitable.
    2. GM never understood the Saab customer profile and tried to move the brand to a more mass market position.
    3. Saab never embraced the advantage of GM scale and resisted attempts to reduce cost by limiting use of GM parts and design.
    It sounds to me like a classic no win situation. Saab could not achieve volume needs to breakeven, while still retaining the niche market approach.

    • Granted, Saab’s production volumes were low, but so coincidentally was their overhead. They had a low break-even and were on track to turn a profit in 2012.

      There are other blunders in that report. It refers to Saab’s business plan shaped late 2009 and says GM and Koenigsegg rejected this plan. Which sounds very strange, since Koenigsegg were using a plan shaped the summer of 2009 by Koenigsegg in cooperation with Saab. What plan was shaped “late 2009” exactly? Was this after Koenigsegg had already dropped out..?

      Why even bring that up? The rest of the report seems to be in the same vein, trying to paint a picture by using their feet rather than their hands.

      • Saab had a lower breakeven … 80,000 units. The problem is that they never sold more than 1000 cars in a month in the US, and without a dramatic change in the numbers, 80,000 was a long way from reality in 2012. And remember, that a dramatic drop in price, or increase in promotional spending, increases the breakeven volume which assumes a certain level of profit per car sold.

  3. I am afraid that this work of 40 pages is an addition of Press Editorials with no valuable information whatever School it has been written for: no doubt the writer chose GM’s side rewriting many facts. It misses a lot of facts and quite empty of obvious criticisms one could make now mire easily that no more conflits of interets are between Saab, Swan, VM, Antonov, GM and the chinese partners…

    Concerning Spyker’s position the author seems to respect the convictions of its leader (so do I) but never analyses for example what cost 8 months with no production… Just a question for exemple : should Bankruptacy have been long ago applied? BEI opinion about Antonov as well as GM strategy about chinese market were well known long before… Or at least should have been… etc

    Well I am still hungry (and probably angry too) after the reading…

    • Would GM accept BMW … the company that agreed to supply engines to Saab … as a new owner? Saab would be a natural and relatively inexpensive acquisition.

    • +1

      It’s a waste of paper / keyboard paper. It’s a high school-grade paper summarizing readily available press clippings. It has less numbers than an arts album. It doesn’t even try to break down the costs of running Saab, both fixed and variable or benchmark them against other companies to verify whether full potential of cost reduction and optimization was achieved.

  4. Negative views here? I think this is a fairly good post-mortem actually. Not too far from my own conclusions, and I say that as someone who worked on the inside during GM’s stewardship.

    GM did many things wrong, no doubt about that. But they also did a few things right, such as leaving a top class production facility behind when they left.

    Muller did a hell of a job under the circumstances, but he was undercapitalized from the outset which made his task an impossible mission since every move he tried to make had to be rubberstamped by x authorities, all with different agendas. And yes, maybe he was a little bit naive with regards to the enormity of the task.

    And to blame the Swedish government is just silly. They are not the ones responsible to make a private business work.

    I think the report provides a good summary of the different stakeholders and how they interacted. I don’t agree with every word, but on the whole it is not a bad post-mortem report.

  5. GM just wasnt ready or interested to let lowly Saab become the international player at the expense or demise of their cherished Cadillac, Buick or Chevrolet brands. Right from the beginning, GM is cramming their junk V6s and clutch cables into some kind of euro-trash Pontiac. Then not getting any small diesels in the US was a missed opportunity to increase sales. Chevy Cruzes are alleged to have that engine option soon. The 92x debacle at the expense of the then new 93 was certainly a factor. The 97 and the 94 without an “international” engine option. Vehicles that get 16 to 25 mpg when fuel prices are the equivalent of way more than a buck a liter will always be a tough sell.

    Saabs influence lives on in some parts of GM. Buicks 4-cylinder 2-liter turbo was recently named “engine of the year”. Buick…the “new” Saab. ICK!! Makes me want to hurl. As always FUGM.

    • With all due respect, this comment reeks of clueless fanboy blindness.

      Please read the report.

      I don’t have the time for a point-by-point rebuttal, so I’ll just touch on the most glaring errors:

      Saab wasn’t capable of growing fast enough to survive, both by internal and external factors. The 9-2x launch was a short-sighted attempt to give Saab the 4WD it needed a decade earlier. It had little if any effect on the AWD 9-3, because that was dependent on the development new Haldex system that Saab helped engineer.

      The market demographic of a Saab buyer is vastly different from that of a Cadillac, Buick or Chevy buyer, so there has always been a great deal of brand separation — until recently. The original GM-Europe V6s from England were problematic, but the newer Holden-sourced ones are fine. The diesel issue was always less of a factor for US consumers. Still is. (And there’s a diesel GMC in my driveway next to two Saabs)

      • You two seem to agree that the 9-2x was not a good idea. The question then: Could that effort had been put into improving the 9-3 earlier, or help develop a 9-5 replacement, or perhaps the 9-7x or 9-4x?

        The anti-GM sentiments started the minute GM pushed Opel platforms on Saab. I do not think that was a helpful thing to do in establishing Saab as a viable brand.

        • Right or maybe they (GM) did not manage to put enough “Saab” in GM plateform for Saab markets, like VW has been successfull with Audi.

          Plus the very late turn with diesel engines (and not highly performed) for european markets etc…

      • I AM a clueless fanboy thats owned a Saab repair shop in Chicago for twenty years, had an opportunity to have the dealer franchise, imported the only Saab diesel in NA, am ready to chop my Honda hybrid into pieces, was in London a few weeks ago hangin with the Neo Bros on the day Saab GB went down seeing if we could align any common prospects. Among many other things.

        I skimmed the 40 page report, sorry I couldnt come up with a more detailed summary.

  6. I think that we should raise our glasses for Victor Müller and all Trollhättan empoyees and every customer who faithfully stuck to the best car ever built!

    And in a fight it´s not always the best man that wins. It´s the one who won on fair play. Remember that.

  7. This article points out that Sweden probably isn’t the best location in the world to build anything because o its small population. However, it makes a good argument why countries should produce goods in their own country, and why Saab should have been saved. I liked the closing paragraph (Googletrans):
    “In Sweden, with a population the size of London or Paris, there are two fundamentally very own car brands. Yes, why is it so? I do not know, but should not the solution to SAAB’s unprofitability was to pull themselves together and create profitable level, rather than close down the company and should not we Swedes (read government) help to do that? Because otherwise – should we start packing the bags now and move down to central Europe?”

    • …”should not we Swedes (read government) help to do that?”

      No. The Govt should not. Many years ago the Govt put billions into the ship-building industry. Eventually they gave up. I’m sorry SAAB couldn’t make it, but I’m glad none of the tax payer’s money went into it.

      • uhm… Hello again Sadim.

        The tax payers’ money will cover the salaries of the workers, up to 170000 SEK per worker. In addition, many businesses (shops, cafes, etc) in the area have already scaled down and some of them might very well disappear. The politicians are proposing various job-training programs for some/most of these ex-employees. Such programs are not free and this money will have to come from somewhere.

        Secondly, the now unemployed will pay less taxes. Saab itself certainly won’t pay any taxes from now on.

        Finally, Saab was actively cooperating with schools and universities developing new technology and techniques. Either someone else steps in, or the quality of these educations will suffer as well.

        How do you manage to conclude that none of the tax payers’ money did not go “into it”?

        • OK, I will re-phrase: I am glad no tax money went in to keeping SAAB alive.

          I know people will be on unemployment benefits for some time. But companies failing and new ones rising from the ashes is just part of the evolution. The folks at SAAB are all highly skilled and will find new openings. In ten years it will seem like SAAB never mattered to Trollhättan.

          • Saab had several technological advanced products, they had excellent R&D, they had a good distribution network, etc, etc…

            To throw all that away, based on the off-chance that maybe some new companies might be able to produce and sell something… Now THAT is gambling in its purest and most idiotic sense.

            Victor pointed out that on April 15th they had a deal ready which would have injected enough cash into Saab to keep them going, heading for profitability in 2012. To believe that can be replaced by something ‘new’ and ‘improved’… Sheesh…

  8. A agree with msauders, the Haldex references I have seen are so far off. Volvo was using Haldex in 2000 and Getrag before that.

    The only thing that got me over to Volvo, away from Saab was the arrogance of the local Audi salesman when I wanted a car with AWD but did not want another truck or SUV.

    How many other sales were lost to the XC Volvo and Audi. How they (Audi), escaped from the chains of those horrible “100” series of the 1980”s still has me scratching my head.

    His other comment about Saab putting the first production turbos on the road is enough to discredit him in most automotive circles.

    Publish or Perish !! If accuracy is the victim of rushing to publication for the lack of research so be it. What ever happened to “peer review”. This entire paper is begging to be red penned!

    • I absolutely agree with the assessment of the 1980’s Audi 100 disaster. If someone rescues Saab, and attempts a re launch, that old Audi and where the brand is today should be a textbook of how to rebuild a tarnished brand from the grave to the top of the heap. Among many of the Muller challenges was how to overcome 20 years of de Saabing by GM, and then how to convince the consumer that Saab was back in business as a “Saab Saab” and would be there growing and innovating in the future.

  9. I found the report very interesting and informative and have to agree with a lot of what was said, but in the end it comes down to the fact that not enough of us were prepared to actually buy a “new car” or have the nesessary funding to buy one on a regular basis (every three years or so) and i include myself here, having only bought two new Saabs in 14 years!
    Saab needed us to put our money where our mouth is and we didn’t do it 🙁

    • I disagree to a certain extent. A strong car company with a profound business/marketing plan has the ability to acquire new customers for the brand and not only re-activate those who are already hooked. There are plenty other reasons why Saab didn’t succeed.

      I wish there was (or will be) an investor that does thing in a very, very different way. A brand new plan, a completely new approach is needed in order to make anything out of Saab’s great heritage.

  10. Left out in this “history” are the number of projects/cars that never came to be.

    Within a year or two of the second-gen 900, there was to be a replacement of the 9000 in 1995 (project 106) and by 1997 a new luxury car (project 108). One can criticize Saab for its smallish production numbers but there were serious plans to address this. Why they didn’t happen would be a good question to ask. Was this because of an unwillingness on the part of Investor AB or GM to inject cash for development?

    Moving into the 2000’s, SAAB and Alfa Romeo were developing a replacement for the 1st-gen 9-5. Once GM dumped its shares in Fiat (Alfa’s owner), that project died.

    As did the 9-6X when GM sold its interest in Subaru. Or the 2nd-gen 9-2X. Have you ever looked at the back of a recent Subaru Impreza hatchback? The tail light design and chrome horizontal strip across the hatch look pretty darn similar to a new 9-5 or 9-4X. I guess GM didn’t have issues with that sort of “intellectual property”.

    The 9-4X was ready to roll out in the US in 2008. This was at a time when Volvo’s XC60 and other small crossovers were beginning to hit the market. The market was ripe for it. The collapse of the US economy and GM’s bankruptcy doomed it before it had a chance. Did GM have anything to do with delaying its introduction until May 2011? Cadillac has now sold over 100,000 units of their version (SRX) and still counting.

    Lastly, I don’t think one can compare what Victor Muller attempted at SAAB to what Mayflower inflicted upon Rover. As I recall, BMW sold Rover Cars (not to be confused with Range Rover which they owned before selling it to Ford) to the British government for 1 British pound just to get rid of it. Mayflower took control of it from the British government and proceeded to loot the company. The Rover 75 was a car poorly cobbled together by the time it hit the market. The folks at Mayflower were crooks plain and simple. If I were Victor I would be very insulted and angry at any comparison between Rover and SAAB.

  11. The authors start with a comparison to Audi, which had disastrously low volume following its reputation for unintended acceleration and Saab and Audi were both in the same segment. But the authors drop the ball on how Audi was able to keep its brand identity and offer a variety of vehicles… or how Porsche has been able to add an SUV and a sedan and keep its identity, or BMW, or Mercedes. Why was Saab destined only to offer a 900-like vehicle and nothing else as you claim authors?

    They say Saab was doomed from the start because of its advertising and was out-advertised in the 80s by Audi, and poor GM was just duped into buying Saab. What they fail to mention, that just about every other automotive publication has pointed out is that Saab introduced new models 1/2 as frequently as its competitors. Why does GM not shoulder the blame for woeful under-investment?

    I also didn’t understand how they are able to assert that the 9000 was Saab’s 3rd all new model. 95-96, Sonnett, 99, 900… maybe the 900 can be considered a derivative of the 99 if your British; but that would still make the 9000 new model number 4.

    Otherwise, some good points raised.

    This report was less than 1/2 finished and rushed to publication.

  12. So here goes my FWIW…
    Short and sweet.

    I read the 2nd paragraph and closed the pager. Their opening is typical of many so called market experts who miraculously have forgot the basic fundamentals of economics which is Supply and demand. Of course you can have a profitable company with 100,000 units pa. What you can’t have is a company geared up for 100k units and only produce/sell a third of that amount.

    We all know how Saab had to file for bankruptcy. They didn’t sell enough vehicles.
    The question we are trying to find the answer to is, Why did saab not sell enough cars. What were the contributing factors. Words that spring to mind are, GM, Media, Suppliers, Governments, 2 decades of public perception and Saab management itself.

  13. Perhaps due to their location in the UK, the authors missed a huge factor I think contributed to Saab’s decline in the U.S. market: competition from the new Japanese premium brands, especially Honda’s Acura. It’s no coincidence that Saab’s best sales year was in 1987, the year following Acura’s introduction into the U.S. market. At that time, BMW and Mercedes had not widely adopted AWD, so Saab’s FWD gave it a niche in all-weather performance which helped its popularity in the Northeastern and Upper Midwestern regions of the U.S. Audi had its quattro, but was still relatively low volume, and (as I recall) had a reputation for poor reliability.

    With the Legend, Honda/Acura offered luxury, agile handling, and all-weather performance, and it came with Honda’s reputation for environmentally conscious efficiency. This was a blend of virtues similar to Saab’s, but Acura included something Saab never achieved: class-leading reliability. With the Integra and later TSX, Acura offered smaller FWD cars that were lower cost, higher reliability options to the 9-3. Indeed, I think Acura eventually became Saab’s most direct competition in the U.S. market, aside from possibly Volvo. It occupied the “not-quite-premium” niche into which the authors placed Saab, but did so much more effectively.

    • Very interesting and hard to dispute Ned. Another factor not discussed much is the unfavorable exchange rate. I’m no economist, but I think the Krona is strong against the dollar and Euro. I’d also love to know how Saab employee wage rates translate to other currencies and comparable pay scales, even in Western countries.

  14. This study is not worth to be taken as the starting point. There are a lot of omissions. Better come back to the subject, once the dust has settled.

  15. It’s easy to make up a theory in hindsight. Here comes mine: SAAB was successful mainly in Sweden, UK and US. Mainly because SAAB offered decent cars that were not German. Now the generation that has experienced World War II does not buy cars anymore, and the new generation does not see Germany as the war enemy anymore. (I do note that there are more and more UK licence plates visible during holiday season in Germany.) Therefore, it is perfecty acceptable to drive Audi, BMW, or Mercedes these days even in the UK. And that ate away part of SAABs share.

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