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.