NEVS to build cars in China

Today ChinaAutoWeb reports that NEVS have signed an agreement to build production facilities for Saab in Qingdao, China. While we are still waiting for an official confirmation I’d still like to bring the article here with a few thoughts that came to my my mind when I saw it.

    Qingdao Qingbo Investment Co. Ltd., State Power Group Co. Ltd. and its Swedish branch signed an agreement on January 7 to build Saab cars in Qingdao, Shandong, according to the city’s newspaper, Qingdao Daily. State Power Group Co. Ltd., based in Beijing, is a sister company of National Electric Vehicle Sweden AB (NEVS), which bought Saab Automobile AB in June 2012. Both are subsidiaries of National Modern Energy Holdings, founded and controlled by Jiang Dalong (Johan Kai Jiang), a Chinese with Sweden citizenship.

Interesting that State Power Group is also part of the joint venture as they are mostly dealing with alternative energies and energy storage. Quite fitting I’d say.

    According to the report on Qingdao Daily, the three sides of the agreement pledged 10-billion-yuan investment for the construction of a vehicle factory designed to roll out 400,000 Saab cars a year. In the first phase, half of that planned capacity will be installed with a spending of 4 billion yuan. Both traditional and alternative-fuel vehicles carrying the Saab brand will be produced. Besides the vehicle factory, Saab China’s R&D, sales, and procurement centers will also be built in Qingdao, a harbor city in northern China.

(To bring it a bit into perspective those 10 billion yuan translate to roughly 1.2 billion Euro.)

To me this sounds quite logical as production in Trollhättan for the Chinese market never seemed to be a serious option, at least not in the numbers NEVS wanted to sell there. I don’t see Trollhättan in danger for now as there will still be a need for European production for the western markets.

It is good to hear that the report also mentions “traditional fuel” cars. For me it shows (after the announcement to attempt a restart of the 9-3II) a move closer to reality of the markets where pure electrical cars are still a niche product.

You surely realized that there is also talk about R&D facilities. I would not be too scared about that as it may have to do with the involvement of State Power Group as well as the general governmental demand for joint ventures to create a local brand using the latest technology (especially for electrical cars).

    Qingdao Qingbo Investment Co., one of the participants, is believed to be a company established by the local government specifically for the Saab project.

Well, state involvement seems to be mandatory in a business like this so let’s not judge if this is good or bad, just take it as a given thing.

For now let’s wait and see, as soon as we get more info on this issue we’ll let you know.

44 thoughts on “NEVS to build cars in China”

  1. It would also seem that the 400k a year number would indicate trollhaten doesn’t have the capabilities to produce the full amount, perhaps another reason for this second factory.

    • I worked in Trollhättan in 2002-2003 and we built around 120’000 cars that year. That was done with two parallel production lines and two shifts and on top of that working on a number of saturdays and doing extra hours. I doubt that Trollhättan could ever reach more than 120-130k at best and it’ll probably take 3-5 years to get that chinese plant operational and by then demand will hopefully rise…

  2. Thanks … in the article there is no mention to the likely time it would take to get the Chinese plant into production.

    It would be interesting to see how this can have implications on the restart of Trollhattan, like for example the procurement of components in China …

  3. It gets interesting again; where there is smoke there is a fire and we just hope to see Saab rising out of the ashes again and start creating lo’s of fire.
    One think is sure; this blog will again get an enormous increase in hits.
    Come on NEVS; start communicating; something is happening and you promissed to speak when things were happening.

  4. Interesting times.
    We have 3 confirmations here :
    1. NEVS has some big players with them: 1,2 billion € starts to be some money,
    2. NEVS has integrated in their business paln some conventionnal energy,
    3……..the full picture isn’t known for the moment.
    Hope for the best.

  5. Hej,(hello in swedish 🙂 ), i am very curious what the reaction in Sweden will be to this news. I can’t imagine that the people of trolhattan sleep better now. Dont nevs brake any promis they made to the region? Or do they have the big demand for production so that production on two parts of the world is needed ? Are there really so much people willing to buy a car that they haven’t seen or driven? I’ll keep my fingers crossed for the unemployed ex-Saab workers in Sweden .

    • It doesn’t make sense to produce cars in Sweden and sell them in China, if we’re talking about any serious amounts. Neither does it make any sense to produce cars in China and sell them in Europe. I hope and believe that the Trollhättan plant in Sweden will be busy making cars for Europe and the U.S. while the new Qingdao plant can produce the cars for the Chinese market. I think today’s news are good news since it shows that NEVS can secure funding for their plans.

      • There is definitely good news in here, even if it just the fact that indeed there still seems to be life in Saab. And that there might be some big companies behind NEVS that can apparently fund these things. Better Chinese Saabs then no more new Saabs at all.

        However, a bit cautiousness for the Swedish perspective and rightful questions on what will be left in Trollhättan in the end is not so strange if you ask me…

  6. Swedish government made the deal with nevs very attractive for nevs. I mean , we can’t say that they paid the highest price for the deal, and now it seams that nevs and their partners are loaded. What’s in it in return for Sweden ?

    • For the billionth time – the government did NOT sell anything to NEVS. The bankruptcy estate did, managed by the administrators who were chosen by the regional court.

        • Do you seriously imply that the Swedish government controls the courts in Sweden? That is nothing but defamation of the Kingdom of Sweden.

          • Okay, maybe I’m not informed enough about how things work there. In the U.S., Feds often appoint circut court judges, etc. It permiates through the system—-all the way down to the local level, much less the regional one. In a technical sense—-maybe there is separation. In practice, people talk to each other and Feds can certainly lean on regionals here while it’s not quite as easy for regionals to lean on Feds.

            • The only way the government can affect the courts in Sweden is by changing the law, for which they also need the support of the Riksdag (the Swedish parliament) and the current government also is in minority there. If the news broke that the government even tried to control the courts there would be an enormous hullabaloo all over the country… In Sweden people in general have high confidence in the authorities, and I think there is a reason for that.

              • Besides the government/court. Do you honestly believe, that NO Swedish politician has talked to Guy Lofalk (behind closed doors), about which outcome “they” (the government) wants? If you believe that this hasn’t taken place, then you’re VERY naive…


                • Hey hey, don’t mix things up. This discussion was about the bankruptcy administrators’ decision to sell the estate to NEVS and had nothing to do with Guy Lofalk. I seriously believe that the government did not affect the administrators’ decision. Guy Lofalk’s “work” is another story though… In that case I don’t rule out the possibility that he was influenced by politicians, not all all.

              • That is the funniest thing I have read in SU on a while. To say the Swedish Govt..didn’t help SAAB fail, they sure didn’t help it succeed!

                • They certainly didn’t help Saab succeed, I agree with you on that. What I am saying, though, is that I find it very hard to believe that they had anything to say regarding to whom the bankruptcy estate was sold – since that was the job of the court-appointed bankruptcy administrators.

      • Eh, excuse me, but as I recall Victor asked for a specific administrator (Guy Lofalk), who in terms was nothing but an erinboy, for some Swedish politicians!!


        • I think that your statement is a bit contradictory. Saab/Victor told the court that they wanted Guy Lofalk as reconstructor and him they got. Had the court decided that it would be someone else and THAT person had acted in someone else’s interests there would have been reasons for suspicion. I concur that Guy Lofalk acted quite strangely, but if what you are implying would be true the government would have needed to make a deal with him directly and not the court. That scenario is more likely but we still don’t have any proof.

          • It’s true that Saab asked for Guy Lofalk. It’s true that he then was court-appointed. BUT, after that he was approaced by leading government politicians, who gave him an “agenda”!
            There’s no doubt in my mind about this! All these “strange” meetings/behavior a.s.o., didn’t origin in the head of Guy Lofalk! The guy isn’t smart enough!!!


          • The whole bankruptcy debacle was suspicious, when the whole truth finally comes out what a story it will be.
            Just wait until the SPYKER Vs GM lawsuit starts, there will be some huge surprises in store for everyone on what is revealed!

            • If you know something we don’t – why don’t you go public with that information? What exactly was suspicious about the bankruptcy proceedings? The Spyker vs. GM lawsuit might reveal suspicious actions from GM’s side, but I don’t see why it would it would reveal even a little about the Saab bankruptcy process. Why should it?

  7. To produce cars for the Asian market in China is the right move if NEVS wants to be profitable.
    Hopefully a 500.000+/year production capacity also means a wide range of cars for the Western markets. Mr. Trogen claims THN will still be the HC and R&D center as it should.

  8. I’m not sure exactly how everyone else feels about this—-but this is the most excited I’ve been so far about NEVS owning Saab. I know I’m speculating—-filling in the blanks (because as usual, the information is sparse)—-but what this tells me is that NEVS is really serious about doing more with the Saab brand than Saab’s recent previous owners have done—-things that can very well result in greater worldwide sales for Saab than ever before. Consider that if they build traditional gas engined cars in China—-it’s very possible that we will see Saabs that cost less (adjusted for inflation) than they have since the early 1970s. We will see a broader range of Saabs (gas/ev) and perhaps as I’ve been hoping—-less expensive models built in China and flagship models assembled in the Swedish factory. I have to believe if they commit to a Chinese factory—-and with such a large capacity—-some of those cars will be destined for markets outside of China. And yes, as someone mentioned, it’s possible the Swedish Saabs will go to Western countries and the Chinese Saabs elsewhere. It’s also possible the Chinese factory will make a smaller, less expensive Saab that can eventually be certified as that entry level model I’ve been pushing for—-for export to the U.S. even. Having a factory in China gives NEVS an unbelievable amount of options. They can end up with a product range that is better/broader than anything Saab has ever offered. They can also have labor costs that make Saabs more affordable than they’ve been in generations—-if the China factory exports to the West. And they can still have the top end cars that compete with Volvo (and others) coming out of Sweden. To me, this has the potential to be incredibly good news for Saab lovers. This is a breaking story that can historic if things fall into place as I’ve outlined…a turning point that will make this purchase even better than if the other bidders had won. Am I getting too excited? Maybe, but it sounds good to me.

    • Karl, as an example:

      “The worldwide network of Audi sites comprises the two German plants in Ingolstadt and Neckarsulm, as well as seven production facilities in Hungary, Belgium, China, India, Indonesia, Slovakia and Spain.”

      • RS: Well said. I will add, BMW builds sport utes in the U.S. So does Mercedes. GMs are built in Canada and Mexico (and practically everywhere else). Volkswagens in Mexico and Brazil—-and other places. Like it or now, things have gone global. Many (not all, but most) car companies now thriving are building in several places and exporting from market to market. It’s reality in the 21st Century, at least as of 2013.

        • I for one will never buy a SAAB that is not built in Sweden, same would go for a BMW built in Alabama, or Mercedes.. The price is still high and from first hand experiences in the family the quality is definitely lacking.

      • just dont like the idea of shipping work overseas for cars that we will probably never see. As a SAAB Technician i find the cars easy to work on and kinda like the fact that there a little bit more UNIQUE than others. Usualy the Chinese mass produce, bringing quality and exclusivity down. To my experience true chinese and all asian cars are built with cheap materials, they bring cost down and flood the market with garbage ( ex: hyundai and kia). Is it normal for a 2011 model year to seize up so bad you have to use torches and extreme heat to free up fastners and bolts. Cheap material and metal. ( MY OPINION ). Lets hope the Swedes will have extremely good quality control. take her easy

        • I have a Hyundai, and as sorry as I am for this: The build quality and especially the cabin quality is far better than the one of my 9-3 ss. Is it a better car? Nope.

          • My Kia Sedona interior finish is excellent as well. Is it up to the standard of my 9-5? No. But it’s a great effort. The Koreans have closed the gap to the point where other car makers have to drop their prices to compete—-or figure out some other serious gains to make a compelling argument for spending so much more for their cars. This is particularly true of the new Saab. They need to hit a grand slam if they expect to charge Audi money—-and even then, it might be a stretch. More likely, they get a ground rule double with their first at bat—- and as long as they charge accordingly, they’ll do fine.

        • Karl: It’s hard to know where to begin with this post. When Saab offers a 10 year warranty like Hyundai and Kia—-get back to me. Products from these companies made in the last 10 years or so are anything but garbage. If you truly believe that—-you might be a Saab fan in serious denial. Their products are packed with features, have a superior warranty (time and mileage as well as components covered), lower pricing (thousands less than comparable cars), large and still growing dealer network—-and as of now at least, they haven’t stiffed any buyers with a bankruptcy and loss of warranty coverage. The best thing that could ever happen to Saab if they return to the U.S.—-is a Chinese management/investment team that is aggressive enough to build a real dealer network across North America—-so people aren’t afraid to be stranded and 200 miles from the nearest Saab dealer—-an entry level model to put more Saabs on the road—-and active promotion of the products like Hyundai/Kia, so they stay in business. If they’re to pick a role model for success—-I would say the Koreans might be a better benchmark then GM Saab or Muller Saab.

      • I might add that those cars are built for specific markets, you will never buy a India, China, Indonesia, Slovakia built Audi in the West.

        • All Audi Q7:s are made in Slovakia for the worldwide market – with complementary complete knock down-kits assembled in India. You didn’t expect that, huh? I don’t think anyone is complaining about the build quality of a Q7… By the way, all Audi Q3:s are made in the Seat factory in Spain, i.e. not Germany there either…

  9. NEVS has now issued a press release (albeit only in Swedish hitherto) with more details. For example, it says that the production capacity in China will be added gradually when the capacity in Trollhättan is being filled up. Sounds good to me!

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