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.