Trollhättan, Qingdao and between the lines…

In recent weeks it seemed to be pretty quiet in Trollhättan. No real news came from NEVS and media outlets mostly went to reporting rumors and speculations. Not very satisfying for a Saab fan to be honest. Then yesterday, there was finally a real story coming up, that at the end of the day was confirmed through an official press release from NEVS.

An agreement has been inked for a joint venture between NEVS, it’s parent company National Modern Energy Holdings and the City of Qingdao. It’s mostly about investements in production in China and Qingdao taking a share in NEVS. But when taking a closer look there is even more of interest in this press release.

The basic news is of course the joint venture in itself. While the initial press report from China pointed at building facilities for a volume of 200k cars/year that can be ramped up to 400k the official press release gave no details on this. But given the long term plans NEVS gave us a glimpse at this seems not to far off. I believe the feasabilty study mentioned will give the final answer on estimated demand as well as on a realistic timeline.

Qingdao will pay roughly 220 million Euro for the 22% share that it takes in NEVS. This surely is a hepful addition to the funding that is needed to get things running again at Saab and it will also be helpful to have a powerful startegic partner in China’s huge market.

Though it was never really stated there was always something floating around about production in China for the local market at least on the lower end of the portfolio. Higher models may still be imported. Mercedes is a good example for that strategy. They import all models above a base E-Class because the customers want somthing made in the west, even if, or especially because they are more expensive than locally produced models.

This leads to one reason why I believe Trollhättan as a production facility will stay. According to what I was told today the plan is to manufacture cars in China for the local market (and maybe parts of Asia) and in Sweden for the rest of the world. Restarting Trollhättan is nothing you would do as a bridge solution for a year or so and then move everything to China.

The current state of information is that cars shall be produced in Trollhättan for the entire world until the factory reaches its limit of about 120k cars. It could even be 190k with a third shift but it’s doubtful that this is viable when you steadily need that volume. With cars for the Chinese market batteries will be installed in Qingdao as shipping them from China to Sweden and then back to China would not make sense.

By the time Trollhättan is at max volume parallel production in China for the local market shall start. Personally I could imagine this might fit well with the point in time when facilities in China are ready.

One thing we all like to hear is that NEVS are still working on restarting the production of the current 9-3. We have reported before that there are some supplier issues to be solved, which is no big surprise. The strengthening of NEVS through this partnership will hopefully help in the ongoing discussions. We have to wait for the final decision on the restart of the 9-3 that shall come “early in 2013” but while I was looking for more information yesterday I heared some rather encouraging things, also on petrol and diesel engine options, that make me feel the chance is rather good.

Generally it clearly shows that silence in Trollhättan must not mean that nothing is happening behind the scenes. From the start NEVS have stated that they will only talk about things they have achieved, not about things they plan to do. This is a very refreshing thing after those times when Victor put out press releases about MOUs an other things that never became reality or a few rather disloyal employees disclosed secret developments from within Saab directly to the Swedish press.

Don’t make the mistake to expect such news to come every week now. Not until there are some more news to talk about. NEVS have proven that they work hard behind the scenes and from what I hear they are very focussed on their goal. That joint venture is one step in the right direction, more will follow.

54 thoughts on “Trollhättan, Qingdao and between the lines…”

  1. Well, I guess we agree to disagree on the “mute” treatment from NEVS. The idea of only having a public presence when there is “something new” to report (that has actually happened)—-you call that “refreshing” and I call it “unheard of” in the corporate world. The reason it isn’t common practice is because it doesn’t work when you have ambitions of building a customer base—-of selling something, now, six months from now, or six years from now. You don’t turn people (buyers) on and off like a light switch. That has been proven so many times, over and over—-it’s why this is such an odd example of a take-over of a company like this. My guess is that eventually, they’ll get a clue and change the behavior. My other guess is that if my first guess is wrong—-they won’t be around for the long haul. It’ll be the same old/same old—-it’ll be a company that sells a relative handful of cars to a few dedicated types or engineering types who “want to be different.” Saab didn’t have a mass market before—-they went out of business—-and if all of this holds true, they won’t have a mass market when they’re back—–and the same cycle will repeat. Conversely, if they learn the virtues of product placement/marketing, they can take Saab to heights never before dreamed of—-as I mused yesterday. I guess the future will tell us. Keep calm and carry on.

    • oh!
      u still did not understood what Nevs is doing.thanks Scania did n’t gave right to use the griffin symbol to Nevs.of course do u remember londan cars geely jv,similarily mg rover saic jv . analysis both of the jvs in paricular . than u can understand geely is one of the top 10 car manf in china till now volvo did not established itself in china like Audi,bmw,benz ,jlr All volvo ,saab are be going to be manf in china .if sales in china dosen’t sucess than they will be prepared for export market than ur sweden manf facilities are ready for manf as an assemble plants

      • Very well said. In fact, with your permission, I’d like to copy this and send it to NEVS so they can publish it on their website. It’ll be an improvement over what’s there now. Much more information in your summary.

    • Unfortunately the press is the press. Good press, bad press, they don’t care as long as they’re telling a story that gets views. They have no stake in the positive progress of SAAB, as has been evidenced in the past couple of years. It is so odd to me that the Swedish press would not want to show SAAB in a the most positive light possible. I think Victor had the idea of full-disclosure as he saw a very loyal, dedicated follwing that he wanted to build a relationship with. I actually liked that take, believe it or not. Wether he succeeded, or eventually failed as it became, I felt I had a stake in SAAB as if we were close family members. Unfortunately the press did what the press does and drug SAAB around forwards and backwards until everyone was just worn out by the whole thing. I think NEVS has taken this approach as that no information sent out means that nothing can be discriminated against and/or twisted around by the Swedish press. I for one, do not trust the press or the Sweish government for one second with the handling of SAAB. They’ve proven time and time again that they cannot be trusted with sensitive information that may or may not come to fruition. My hope is that NEVS has a grand plan and they plan to come out with guns ablazin’ and fists swinging. I hope they knock us off our socks with what they have in the pipeline… I’m not going to hold my breath, but there’s always something nice about having hope. Much better to have it than not, in my brief life experience.

      • Nick: Some good thoughts for sure—-but I do think really, really successful companies—-have public affairs departments that can sometimes play the press like a violin—-can use the press to their advantage. But in this case—-and I’m not in Sweden to validate this view—-it seems as though the Swedish press, for whatever reason, is bent on hating Saab and getting others on that bandwagon to push for failure. It’s perplexing to me.

    • Have changed my opinion. I think you are right, NEVS provides to little and confusing information. Every new official info from NEVS raises more questions than it answers. Trollhättan to reach full production? With a focus on EVs? That will not even happen when the battery capacity problems could be solved in short term, which they apparently can’t. Or will they build 100.000 conventional cars instead? Who is going to buy those?

      When the 9-3 was released, it had one significant defficiency (aside from no hatchback): It was the same size as the old one, albeit with a smaller trunk; meanwhile, most competitors came up with cars in the same price class, but more room inside. This has not become any better since 2002.

  2. It looks promising , but I’m surprised about the low amount of reactions here on SU. Half a year ago the server almost exploded when there was “good”news. Where is everybody ? Nevs up!

    • I think most have adopted the “believe it when we see it” approach when it comes to NEVS. Hence the comparative lack of reaction.

      • There is also a certain level of burnout at this point after the roller-coaster ride of the last days of Spyker, the bankruptcy, and the subsequent acquisition by NEVs. Yes it is good that things appear to be moving forward and that NEVs seems to be looking at a more realistic approach. However until we actually see a product it is hard to get really excited.

        • I don’t need to see a product to get excited. But I do need to hear from NEVS—-either through the automotive press (who they are apparently not really talking to) or through their website—-which I think we can all agree is developmentally challenged and low on the spectrum at that. It doesn’t take too much to stir excitement among Saab fans—-but it does take SOMETHING. ANYTHING.

    • The former Saab Automobile AB and NEVS are two entirely different companies with different goals and mission. It would have been much easier if NEVS wouldn’t have been able to secure the Saab brand. How many would care if it was just NEVS?

      BAIC introduced a car based on the 1st gen Saab 9-5 (with the Saab 2.0 and 2.3 engine) but I don’t see any Saab enthusiast going crazy over that. Would it be different if that car would wear a Saab badge? Spyker and Youngman have a joint-venture and will be using the Saab- developed Phoenix platform for new cars. Would those be Saabs if they will have a Saab badge instead of a Spyker badge on them?

      Going by the name ‘Saab’ is misleading and I think many assume it is still the same as it was before the bankruptcy. Only the name, location and brand remains. As others mentioned, after all the ‘news’ and promises made in the last 3 years by Spyker and NEVS being the second owner after GM, let’s see it first before we believe it.

    • Oh, I *am* excited. I just don’t have much to add. Yet. Just hoping. 🙂
      To see all those lovely 9-5SC on auction was tough. Teknikens Värld managed to try one of them – see the latest issue.

      I am as usual defending Saab/Nevs in swedish comments (AMS, Teknikens Värld, TTELA, NyTeknik). And I am still puzzled by all the hard words pointed at me/us. I even got a “stalker”, Pär G, who kept ridiculing me/us in every comment I made, even those not about Saab/Nevs. Thats sick.

      • Frank: If BAIC had approval to sell those cars in my market, damn right I’d be excited about it. I’d be learning all I could about them—-absorbing it all and hoping for more information. Those are Saabs at their core.

        • Are they? Why was so much changed? Look at the interior. Ugly, disfunctional, (bad) style over function. Do the seats still have SAHR? What about all these nicely intermingled layers of steel sheets that resulted in excellent crash safety? Are they still there?

    • I think that many of us are not as excited about good news as in the past because there have not really been any statements made on a timeframe for NEVS to offer new Saab cars in Europe or North America. So, any good news now is not like in the past where the production line was stopped, but would start up building cars again for those markets. The fact that NEVS seems to be getting the funding they need to move forward with the business plan is good news, but without knowing if or when I will ever see new Saab cars in the U.S., it is hard to get as excited as before.

      • Well, yes, of course. You hit this one out of the park. In fact, putting a timeline aside—-if NEVS themselves, on their own website, stated in their own words—-that Saab is alive and well—-that new products are being developed now—-and will again be available in North America—-and even if they didn’t promise a time, putting this commitment in writing for the world to see—would actually make current owners feel better about their Saabs. If nothing else, that’s a start.

    • The low numbers of comments might also be a result of the current state of us, the commenters. We seems to do more like the swedish press always did:
      If NEVS do not act the way we think is right, we tell the world that they do it wrong, that they harm the brand and tell what they should do instead. All without any knowledge….
      att all.

      • When the first images of the EV1 hit SU, expect about 220+ comments. Or when we start doing something here that’s actually engaging and entertaining for commenters. Until then, there’s nothing too exciting to see here.

        • Depends on what you find exciting I guess. Personally I don’t just like the press release stuff or new vehicles, I like it all. I do understand though that the comments come more rapid when there is something to complain about or be excited about but I still see stuff on here that I find exciting.

  3. I have to agree with Angelo V. on this…
    It´s a diferent way to work… but that diferent way could be hurting a little more.
    To keep the interest flowing you must provide something to hope for…
    And to this brand, this way of doing thing may hurt…
    With this i din´t say that they should keep their buissness wide open… but not knowing things will drift people away due to lack of interest in the existing fan base…

    That´s why ( as xelav told ) there´s a low reaction to this news…

    Keep the faith………………….

    • And I will add something to what I said. If the product you intend to sell is an impulse buy—-like a kids toy or even an adult gadget that sells for $40.00 (U.S.) or less—-you don’t need to prime any pumps. In fact in those cases, the element of surprise is often better—-you blitz the market and make as many sales as you can and move onto something else. But when you’re trying to sell a car—-which is often the most money people will spend on anything except their house—-it’s a whole different ball-game. You have to develop reputation and trust—-and it’s a painstaking process sometimes, especially for a name like Saab, which has been through quite a bit of adversity. It’s certainly possible to take Saab’s positives and highlight those—-and in some way, sweep the negatives under the carpet with a fresh start. But that isn’t happening now. In fact, I maintain that by NEVS being so disconnected/aloof, they are feeding the fire of “Saab is dead” among people who aren’t really car enthusiasts and don’t follow news of an “out of business” car company trying to come back—the way that we do. For the public at large, NEVS being mute is just burying Saab deeper into the “I remember them.” category. That isn’t a good place to be when you re-launch a product. NEVS seems to need help.

      • There’s no plan that I can see to bring Saab back to the US market. There’s no concrete news that a proper turbo charged IC engine will be offered…what is there to be excited about?

        • If a turbo IC = saab, then there is a saab at every dealer worldwide.

          Saab kept the 2-stroke engine dispite the fact noone bought them. The owner got to tell the head of saab to try a 4-stroke….that saved saab at that time!

        • Well, even though I hate reading this, I’ll write it anyway. I guess we have to wait and see Saabdog. Keep calm and carry on, wait and see. That’s what I’ve read over and over, so I guess that’s our choice until and if NEVS hires someone to share information with the public. But Saabdog—-the majority of cars being sold in the U.S. do not have turbocharged engines—-my point being that what excites you—-and what doesn’t—-might not match up exactly with a whole batch of new buyers—-tens of thousands of them. You know what would excite a lot of 20-somethings buying their first new car after getting their first job out of college or trade school? A new Saab they could afford. It wouldn’t have to necessarily be turbocharged. It wouldn’t even have to come standard with leather. But a hot hatch with the Saab name (which still carries prestige, at least in metro areas)—-if they could afford one, they’d be as excited about that as former Saab owners would be about reintroduction of the 9-3 with a turbo—-and a 40K price.

  4. The press release states “As production at the Trollhättan plant will reach capacity”. That’s a very vague statement and doesn’t automatically imply it is the same capacity as the former Saab Automobile AB company had in this same factory. There is a little bit much reading in between the lines here.

    120K cars a year before production is added in China? Saab hasn’t been able to sell that number of cars in the last 6 years (or more). How are they going to sell that number of electric cars and one model with a petrol engine that is 10+ years old? And there is also a minor issue with not having any current importers and dealer network in this worldwide market that is talked about. The brand is severely damaged as well after all that happened in the last 3 years. Are they going to ship these 120K cars to China? As discussed before, this doesn’t make any sense.

    The Chinese are smarter than paying 220 million Euro for castles in the air. The only goal is to start production in China and sell cars in China.

    • True, the statement is vague but that’s why one can grab a phone and ask. That’s what I did and what I base my thoughts on. But as usual, you surely knew this, right?

    • @FrankWulfers said And there is also a minor issue with not having any current importers and dealer network in this worldwide market that is talked about.
      Perhaps NEVS are negotiating with the owners of SAAB Parts to piggyback on the world-wide distribution network and agents that they are setting up? That would at least be a “leg-up”.

      As for the joint venture news, Hmmm… mixed feelings about it like most folk, but I sincerely wish NEVS the best.

    • The production line in Trollhättan is of world class with respect to productivity. My understanding is that there are two lines, which can be handled by one, two or three shifts, fully utilized this will give a production capacity of close to 200 000 cars per year. One line with one shift will thus give about 33 000 cars per year etc.

      It might be that NEVS will take one of the lines and ship that to Qingdao when the facilities are ready. As the town is behind this, it might already be buildings suitable for production.

      NEVS is starting from zero and it will take a number of years before the production reaches the limits, both in China and in Sweden. In parallel, extra lines can be built in China and in Sweden. With four lines in China and two lines in Sweden, the total capacity would be close to 600 000 cars, which are more than Volvo ever have produced during one year….

        • Nope thats wrong. Frikkeboa was the development part of the production facility.

          Saab had two parallel production lines up until 2007 when the 9-5 and 9-3 line was merged into one. well actually they moved the 9-5 to the 9-3 line because it was newer and much more efficient.

          These two production lines have existed more or less since Saab introduced the 9000 series in the 80’s

  5. Wait and see whether the 220 million euros get paid first. If I recall correctly, there were many occasions that Muller thought he had cash in the bag when it turned out the government wouldn’t let it go.

  6. At least an official press release and I am very happy that we now officialy know that the plans are to build cars for the Chinese market in China and cars for the ROW in THT.
    I look forward we can order again the 9-3 cars, including the convertable.
    But I must say that the first comment here from Angelo V. is to be taken seriously by NEVS, at least if they want to stay successfuly in the market.
    You can argue that the VM times was too extrovert but the NEVS time up till now is just too introvert.
    It is not because cars ara available from production again that the market will start to place orders for these manufactured cars. There is a lot preparation work to do first.
    But all in all we look again with optimism to the future for Saab.
    When they said the new logo will be made public?

  7. I guess things are very different in China, but I have never heard of a city being a part owner and joint venture partner with a manufacturing company of any product. Apparently they have the money, though.

    • I’ve heard of arrangements like that in Europe where city is part share holder of a company. ZF, the gearbox manufacturer, has the city of Frierichshafen as a kind of shareholder through a foundation it (the city) administers.

      • There are some exceptions, but they are rare and tend to originate from a time when “free markets” and “globalisation” were not on the main agenda of the EU.

  8. When there are 10 Chinese living in a 2 room apartment, why is their Govt doing this with the peoples money. Weird, if you ask me . Politicians are obviously getting the money while the little guys suffer.

    • “Politicians are obviously getting the money while the little guys suffer.”

      Vagabond, that happens in *every* country in the world, under every political system ……….

      • Err, but to what extend? I can hardly imagine (and it would not be allowed, too) that a communal entity of the EU could buy or establish a company that produces cars. In China, it seems quite common. This opens the door for personal enrichment of the politicians.

  9. It’ll be a while before we know very much at all, that’s for certain. Unless NEVS are planning a nice surprise of some kind over the course of the Detroit Motor Show (nice way to kick sand in GM’s face), we can probably go back to talking about fun stuff – wish lists for new models, Saab design elements, dashboard layout and lighting/ergonomic ‘cockpit’ etc, fan’s cars and their mods, ECUProject, JZW’s 10-second Saab – stuff that makes us fans and not business analysts.

    • Thanks … and with Google Translation I read that the production target for 2014 seems very realistic at 60.000 units, nothing over optimistic.

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