Saab should go global with BioPower?

Back in January, when Richo and I attended the launch for BioPower and diesel cars here in Australia, I asked Saab Oz’s chief, Parveen Batish, why they didn’t just make all Saab 9-3s sold in Australia BioPower-capable.

The answer that he gave at that time was that it was an issue of offering the customers choice, which I can understand.

The problem then, as it is now, is that there’s no E85 available in Australia. So the choice is for the customer to make a statement about their green intentions at a cost of $1,500 over the price of a regular Saab 9-5. A choice that they can exercise in the showroom, but not at the pump.

I thought back then, as I do now, that it would be better for Saab to make the choice, and choose to offer all Saab 9-5s as BioPower vehicles. As it is, Saab can say that they’re offering the customers a choice to take away the chicken-and-egg argument – what comes first, the fuel or the cars to run it on? If they offered an all-BioPower lineup in the 9-5 range they could say that they’re the ones making the statement.

This situation has been highlighted in an article in Go Auto Magazine here in Australia in the last 24 hours. Here’s the Batman in quotes:

“If you have a car that runs on E85 that can also run on normal petrol, and you can’t tell the difference, then why wouldn’t you do it? To all intents and purposes it’s exactly the same car, it just has a BioPower badge on the back. So there’s no difference to buying the BioPower car to any other car…”

Except, of course, the customer is paying an extra $1500 for a benefit that does not yet exist, and may not for some time.

Despite that, Mr Batish believes Saab buyers will be prepared to buy this new technology “almost like a statement of intent, if you like”, in order to put ethanol on the agenda.

“Yes, we are (expecting a fair leap of faith for buyers),” he said. “I’ll be honest with you – yes, we are. But it’s there if they want to buy it. If we don’t offer it, and nobody offers it, then the debate will never get going.”

It’s good that Saab have started the discussion on the issue here in Oz, but I can’t help but feel they’ve only gone half way to where they could have.

As a result, there’s a lot of questions with half answers:

But is Saab getting support from any other car manufacturer or importer in Australia?

“Currently, no,” he admits before pausing. “I don’t know who they are, though I could have a guess, but I’m almost certain that other manufacturers will be able to offer E85 cars in this country in the near future…..

…..So when will we see the first E85 pump at a local servo?

“I don’t know, to be honest with you. I’d love to be able to say in the next three or four months, but it’s not my call obviously. It’s the petrol companies that have to decide that.”

…..Is Saab talking to other oil companies?

“There’s only one we’re talking to, to be honest with you. I think others are interested, but there’s only one we’ve been talking to.

…..Having released the first BioPower model and on the eve of launching the second, what sort of take-up does Saab Australia expect?

“I don’t know, to be honest. I couldn’t tell you.”

…..So how many cars have Saab ordered from Sweden?

“On 9-5, we ordered 50, but on 9-3 I don’t know. I don’t know what the take-up would be.”

Even if Saab made the whole 9-5 range, or the entire Saab range, BioPower compatible, those questions about fuel sources would still exist. But at least Saab would be able to say “Here’s the cars. Every car that Saab sells in Australia is capable of reducing fossil fuel emissions by up to 80% on the right fuel.” And just as they are now, they’d have to get the discussion going about fuel availability. But offering the whole range as BioPower compatible strengthens the argument so much more and shows some commitment to the technology. Given that the cars can run on unleaded just as well as E85, it’s a no-lose situation.

Except for the $1,500 per vehicle cost to the customer, I hear you say.

Well, that $1,500 per vehicle, from what I’ve heard in the past, is most likely at least $1,000 in profit for the company. The 9-5 is such a high-margin automobile now that every one they sell represents a huge profit per unit. They need that to offset the smaller margins on the 9-3, but surely for the sake of building the brand image that you want to build, it’d be worth it.

Click through to the Go Auto article. It’s a good read. As good as the Saab offering of BioPower here is, it just feels a little half-baked.

——

The same questions that I’m asking about Saab here in Oz could be asked anywhere else. Given that additional marginal cost for outfitting a car as a BioPower variant is most likely a fraction of the premium they charge, would it be better to build the brand image around the green ideal and make it a no-cost (or very low-cost) option for gasoline variants in all markets?

Or would that tie Saab too closely to what is possibly a transitory alternative fuel?

My final verdict?

I think that least the 9-5 should go all-BioPower, with a low-cost option on the 9-3. E85 is going to be around long enough that it would be of at least medium-term benefit to the brand, as well as being a beneficial thing for the environment.

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19 Comments

  1. There is an extra oilchange on BioPower cars every 15 000 km. In a time when all manufacturers use 30 000 km service interval it can be hard for Saab to motivate costumers to service there cars every 15 000 km just because there car has the capacity to run on ethanol even if they don’t.

  2. Dave: You really are Psycho if you only change the oil every 30k or 15k for that matter.

    “If you have a car that runs on E85 that can also run on normal petrol, and you can’t tell the difference, then why wouldn’t you do it?”
    Help me with this — what is the difference? Lower fuel economy, different performance, what?

  3. I think Saab should use the Biopower in evry market they can even if e85 is not there. Then bash hard on the commercials. Cut the premium cost to €500 and let people choose…

  4. As you know, the 9³ Aero is incapable of running E85, but as you point-out the 9⁵ could easily go “all-BioPower”. From what I’ve read to convert a car to be E85 capable it really only consists of about $35 worth of hardware changes. So the $1,500 Saab Oz is charging seems grossly excessive. Are they trying to sabotage their own campaign so they can later say, “well, we offered it, but nobody was interested”?

    I hope that this whole debate is solved through the free market system and the economy. At least here in the U.S. if gasoline prices go up to $4 a gallon and subsidies and the fact that E85 only contains a maximum of 30% gasoline will keep E85 much less expensive than gasoline, I think then we’ll start seeing people who can run E85 doing so. Right now the price difference between a gallon of gasoline and a gallon of E85 isn’t even enough to compensate for the 30% fuel economy hit you’d take running the E85, I don’t think (I don’t think that a gallon of E85 sells for more than 30% less than a gallon of gasoline where E85 is sold, but I could be wrong as it’s not sold around here so I’m not privy to current E85 pricing).

    Hopefully the market will solve this issue on its own.

    Psycho Dave: Saab Global might have to take the tact that Saab USA has taken and offer free scheduled maintenance the first 3 years/36K miles in order to convince buyers that the increased oil change intervals aren’t such a big deal.

  5. E85 biopower is short term solution for sport cars, it makes no sense to push it wider than it now is.

    I think that soon as electric cars start to arrive, Saab brushes E85 under the carpet.

  6. TuuSaR: unfortunately for Saab that likely won’t be until 2012 at the earliest. And that’s a optimistic estimate.

    The reason Saab leads in ethanol technology is because Sweden has set the goal to wean themselves off of fossil fuels by 2020 and have set tax incentives to achieve this goal. I guess they don’t think that EV are viable at least in Sweden (the cold weather makes batteries less efficient) and that ethanol is the best-bet, even if they have to import the majority of it from Brazil.

  7. If the ethanol option is inexpensive enough to put on Chevrolets here in the US, it should be inexpensive enough to put on Saabs.

  8. Give us diesels!!!!! NOW. And with the Aero! or I’ll be forced to buy a V-W.

    @2: I lease my Saab, I change the oil when the computer says change it. Well, Saab actually changes it for free. Now my WIFE’s Saab i spaid for and gets a full helping of Mobil 1 every 7500 miles, even though the manual says 15,000 miles (that’s 12,000km & 24,000km for the rest of the world). In the US, MY2007 and later Saabs have a 5yr100,000 mile powertrain warranty ,which means you take care of it by the book and they’ll fix it. Next you’ll be telling us every 3,000 miles like Jiffy-Lube does!! Some Porsches go 20,000 miles/32,000kms now between oil changes. Granted those are dry sump and take about 3 gals of Mobil-1, but why would they F-over their customers???? I don’t think Saab would either. The new oil change intervals are real. I think it is time to move into the 21st century guys! BTW sparkplugs and antifreeze last longer now too 🙂

  9. Hm. That really depends where you live and how you drive. Here in northern climate even dealer workshop suggests you to make one extra oilchange every 15000km. Especially if you do a lot of cold starts (no parkheater used) in cold ( less than -5 degrees celsius) weather you should do it more frequently. And same goes for sparkplugs + antifreeze. Btw, trionic is VERY sensitive on sparkplugs. Like BSR tuned cars they should be replaced every 20000km.

  10. I really don’t see the point of NOT doing BioPower on every car- you get economies of scale, and in the US Saab could market themselves as the “green” luxury car company.

    The additional sales and publicity would be worth it, IMO.

    And so what if E85 gets swept under the rug? You can always fill a BioPower car up with straight gasoline, and that’s going to be around for a long time.

  11. But to the topic. Even if it will be a short time deal, the BioPower, I´ve been also wondering why they do not offer them on all the markets. Even if it´s hard to get E85. There´s always possibility to run it on petrol. And like it´s been stated here several times, most of the swedes still drive E95 petrol because of better mileage they get.

    I watched recently a document showing Brazilian ethanol production and the costs it being spreaded all over the world. It gave me a feeling that the whole flexfuel hype will be for a very short time. There´s so many problems on producing and distributing E85, or E100 now and especially in the future, that actually it would be more economical to drive regular petrol (diesel!) car with less consumption. At least from CO2 point of view.

  12. There´s an interesting detail now that Saab sells so many BioPower cars. European Union will set quite strict limits. According latest info, every car manyfactures selling cars in Europe, should average 130g/km CO2 value. That´s all the models sold included. That means, there has to a lot of models producing quite low CO2 emissions, to allow them to produce some models with higher values.
    And that seems to be the reason why Porsche is buying VW now.

    So I wonder how the Biopower models will be taken in a count? What´s the official CO2 value for 1.8t biopower? They´re not released yet. There´s no rules how to measure it. By using E85 only? Or 50% of the cycle with 95E? Or what?

  13. Speaking for Saab in the USA only, I’ve been told by Steve Shannon, President of Saab USA that the reason we have to wait until 2009 to get the 2.0t BioPower 9³ is because it needs to undergo endurance testing in different climes, from the deserts of Arizona to the frozen parts of Canada. That testing takes engineering resources from GM, which are tied-up on higher priority projects right now, such as the new Corvette engine.

    Though… this kind of reasoning runs hollow when you figure that the BioPower engine has already had real-world testing in the frozen arctic areas of Sweden and you consider that GM has engineering resources to waste on making a special concept E85 Corvette show car

    As to MarkoA’s revelation that most Swedes still drive “E95 petrol” (I’m guessing he meant E5, but I could be wrong) for better mileage, I think that here in the States if the per-gallon price of gasoline is $4 per gallon if the same station has E85 selling for $2.80 or less (30% discount off $4) it’d be silly to put gasoline in your flex-fuel capable car rather than E85.

    I think most Americans shop by price anyway. When they see the big sign at the gas station that says, “regular unleaded $4, E85 $3, diesel $3.50” they’d go for the E85 every time, not considering what the better deal is (which would be 1. diesel, 2. gasoline, 3. E85 in the example), assuming their car is capable of running it.

    MarkoA: the official CO2 value for the 1.8t BioPower can be inferred from the Saab International website. The values shown are when running on gasoline and there’s a note to subtract 80% from those values when running on E85. That, of course, would be the fossil-fuel-only net emissions rather than the gross CO2 emissions though, I guess. I can see your point though that they’re not really being all that straight-forward about it. Do we just allow an exemption on biofuel-generated CO2 and count only CO2 from fossil fuel?

  14. MarkoA: I’m sure you’re far more familiar with it than I am, but isn’t what you’re referring to (95% gasoline, 5% ethanol) generally referred to as E5? Ah, wait: I just looked it up in wikipedia and see that what you’re referring to is the octane content (95), not the ethanol content of the mixture.

    Here in California all the unleaded gasoline at our fueling stations is “gasohol” or E10, but everyone just refers to it as “gasoline” regardless of its ethanol content.

  15. Gee, oil’s a sneeze away from $100/barrel and GMs US priorities are the “new” Corvette engine?

    Surely the “hoax” Biopower (E85), hybrid/electrics, and the “real” Biopower(biodiesel) are being tested…somewhere?

  16. Yes, 95E is the octane rating. But it contains 5% ethanol as well. 98E is the other one, containing 98RON octane + 5% ethanol. But anyway, where were we 😉

  17. eggsngrits: I don’t change oil every 30 000 km, I change it every 10 000 km. But there are many non Saab fanatics like ous that buy Saabs and they service there cars like it says in the book. What I mean is that they can have a hard time to accept that they have to service there cars every 15 000 km instead of 30 000 km just because there car can run on E85. It is likely that many will never ever run on E85 so why should they be “punished” just beqause the car can run on E85.

  18. The extra price is hard to justify if the actual cost of the modifications is as low as is suggested above.

    Although, I have heard that SAAB did not impose the surcharge on a biopower model sold here recently. When you consider the comments in the article about ‘leap of faith’ then it seems only reasonable to give it away for free.

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