Who I’d like to see as Saab’s new owner

Thanks to all who voted in the Who would you like to see as Saab’s new owner poll and shared some thoughts via comments.

The outcome was interesting, to say the least. The three known players had very different results, with Mahindra getting 64% of the vote, Youngman just 15% and the Sino/Japanese electric consortium just 2% of the vote. Any unknown potential suitors gathered the remaining 19% of the vote.

So Mahindra are the popular winner.

Who do I think should become Saab’s new owner? Let me break down my answer into two separate parts for you.

Fantasy owner

We have three known bidders for Saab and perhaps – just perhaps – there might be one or more other bidders who have kept their identity quiet. I should say that in my opinion, the likelihood of there being more bidders who manage to stay completely under the radar to be very small. From an historical viewpoint, the identity of a company contemplating such a significant transaction usually ends up in the public domain.

That said, if there was someone flying under the radar, my hope would remain that it would be BMW. They’ve never confirmed such deep interest as far as I know but if they were interested in Saab, it would be a very outcome. Johan summed it up pretty well in comments:

[BMW are] one of the few owners that would instantly restore confidence. They also have the funds. Leading technology and great fun on both front and back wheel drive.

I can’t add much more than that.

I actually think Saab would give BMW more front-wheel-drive flexibility than Mini. While Mini is an icon in the motor industry, one that BMW has milked very well indeed, Mini is also afflicted by the motor industry’s equivalent of typecasting. A Mini is a Mini and BMW have pretty much exhausted the variations, to varied levels of success. A Saab can be big, small, a sedan, wagon, convertible or hatch with no real betrayal to the brand’s DNA.

But this is living in fantasy land. Best not spend too much time there.

Real life owner

My choice from the known players has to go with the majority vote here – Mahindra.

Mahindra are a strong company with a multi-national business in heavy machinery and they obviously have an interest in building up their passenger car business. Saab is a damaged near-premium brand, but it’s still got a few things you can’t build overnight – history and expertise. They’re elements that could bring much to Mahindra’s existing business.

It’s tempting to look at Tata and JLR and daw parallels, but I’d be cautious in doing this. The challenges with Saab are much bigger. JLR had products developed and no restrictions (that we know of) from Ford on using them. Saab’s new owner won’t have such luxury. I believe that Mahindra do have the broad base and discipline to develop what Saab can offer, however.

The difficult part is that we’re working without much public access to Mahindra, with next-to-no knowledge of their intentions. I’m still cautiously optimistic, however, about what they’d like to do with Saab and their ability to invest.

One encouraging act on the part of the administrators is the retention of a number of key Saab staff. This will make the re-start process easier than what it might have been. Sure, many other key staff have moved on, but I can tell you that there are good people in place.

The others?

Youngman – they’ve played the public relations game quite well. Retaining operations in Trollhattan, etc, etc. They’ve flown influential people to China to see their facilities and they’ve received quite a sympathetic ear from the Swedish press. None of this changes my opinion of their capability. I simply don’t believe, based on my own limited knowledge and brief conversations with people who’ve dealt with them, that they’re capable of running this company successfully, nor do I believe in their long-term ambitions.

I’m quite open to being convinced otherwise, but the little that I know isn’t encouraging at all.

The electric consortium? Let’s not even go there.

——

I fully expect Mahindra to win the day and I hope we’ll hear something to that effect in the near term.

Swade

Ex-Saab blogger, multiple Saab and Alfa Romeo owner and football tragic.

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23 Responses

  1. MeanSabean says:

    Right ON!

  2. 100%Saab says:

    I can live with Mahindra.

  3. tim in denver says:

    re BMW
    ‘but if they were interested in Saab, it would be a very outcome’.

    Indeed, Swade, it would be a VERY outcome. ;-)

    tim

  4. zippy says:

    BMW would be the dream ticket but I have faith that a huge company like Mahindra could do something with Saab provided they pump in a few billion dollars to get things going again. I wish GM would allow any potential bidder to keep building the 9-5 which is, IMO, an absolutely stunning car. Some bloke pulled in along side me in the carpark the other day in a jet black 9-5 Aero. I was on my way into the shop and I had to comment to is owner on how beautiful it was. He was hopeful that Saab would ‘continue building these amazing cars’. I SO agree. :)

    • Paul says:

      We had a 9-5 loaner while my wife had her 9-3 Combi in yesterday. Wonderful car, it made me very happy and very sad at the same time to have it for a few hours.

  5. Jon C says:

    I am reminded of the old joke about an Englishman asking an Irishman for directions to Cork. The Irishman replies “Well sir, if I was going there I wouldn’t want to be leaving from here”.

    Yet here we are. I hope Mahindra can get things running again but hope and fact are two different propositions.

    The prospects of thousands of people are riding on this. With that in mind is the EV factory a gamble worth taking? Is it better to attempt something radical that might become a huge success, versus 20 more years of GM lite? I don’t pretend to have the answer. Logic tells me take the safe route -but maybe that’s not the Saab way.

  6. Tompa says:

    1. Mahindra (With hopes they intend to produce Saabs)
    2. Youngman (Might work with help from management pros)

  7. Magnus Järhög says:

    The dream scenario is BMW. But in reality i think it will be Youngman.

  8. GM needs to sell Opel says:

    GM needs cash and is losing money in Europe. How about selling both Opel and Saab to the same buyer, be it BMW or Mahindra? It is a mega transaction in all aspects but it combines existing engine sharing programmes. In the short term GMs shareholders will be winners.

    • Thyl Engelhardt says:

      They can’t. Despite all the moaning, GM was at that point and pulled out at the last moment after recocnizing that they need the development department of Opel, since Opel has been so instrumental in modernizing GM’s technologies.

      BMW will not buy Opel anyway. Why should they? They tried that with Rover. Saab is a different proposition though, since they are smaller and lightweight, and have higher price per car. Still, I thought we heard an official denial from BMW?!

  9. Andrew Robertson says:

    The eventual ‘winner’ has a monumental job to rebuild not only cars but lost reputation. A ‘damaged brand’ is something that will take many years to turn around and may never be restored to what it once was. But look at SAAB’s history over the last four decades, with some clarity of hindsight in two years time, and it may then appear to be just another speed bump in the marque’s history. Whatever happens this week, we will see an end to the speculation, which will be welcome. I just want some resolution, either way it turns out.

  10. 900_S says:

    As much as I’d like to see more electric cars (and the infrastructure) built and on the road… I, like everyone else, don’t want to see Saab’s facilities only cranking out EVs–especially if they don’t say Saab on them, though really it’s just as well at that point.

    Mahindra seems to be the favorite, so I guess I’m rooting for them… BMW, as has been stated in multiple places (multiple times), is the dream. I would think they could do what Spyker/Victor Muller couldn’t. Nothing against Victor and his noble, ambitious role in everything–but BMW is in the big leagues, where Saab was briefly, to the surprise of many.

    What’s kind of sad about Youngman is they’ve already invested some money. I don’t know the weight of that amount, meaning how much they’ve invested compared to how much they have total. It sounded like they had positive intentions, but ultimately I want what everyone else wants: a strong backer who will restore Saab to its rightful place in the auto industry.

  11. eggsngrits says:

    The ultimate answer here is that none of these bidders (even BMW) will build Saabs the way they ‘used to be’ built. That is a direction that yielded mediocre financial results. The ‘new’ Saab under any ownership will be different almost by definition. I simply hope that the people in Trollhattan will have an employer that has a sustainable business plan. If the plan makes interesting cars, great. If not, nothing ventured, nothing gained.

  12. Jasper says:

    Thanks Mr. Wade. Fully agree with your analysis.

  13. Allan B says:

    It is a shame that the EV consortium are dismissed out of hand. What happened to ‘move your mind’? EVs are the way forward in the long term, in my opinion. There is a battery-powered arms race going on as we speak and what I have read on the subject leads me to believe an EV with a 300-mile range and short recharge times is only a few years away. That could turn out to be wrong, of course, and for that reason I suppose the sensible way forward is EV development alongside hybrids and conventional-engined cars during the short and medium term. Certainly EVs as they currently stand are not suitable for someone like me who does around 20k miles per year. So … I guess that means Mahindra come out on top, and they certainly look a robust proposition. (Assuming BMW are not in the running after all.) But if the EV consortium did win, I would still look on with great interest.

    • Swade says:

      Allan,

      With regard to EV’s being dismissed out of hand……

      I wrote this piece in a hurry. If I had more time I would have (and should have) linked to a piece I wrote a week earlier, discussing why turning Saab into a fully electric car company would be a mistake (IMHO).

      • maanders says:

        Even if the technology limits of range could be addressed soon, the price for EVs will have to get close to conventional internal combustion cars before it will have a significant impact. I just read another article today that said that in U.S. just under half the owners of hybrid cars would consider buying one again in the future if there is no government subsidy to bring the cost in line with traditional cars. That is because right now the savings on gas from a hybrid does not balance out the cost difference for about 8-10 years….and most people do not want to keep their cars that long.

        There is also the issue that most people driving 10+ year old cars cannot afford a new car, hybrid or otherwise. So, even if a viable EV was available next year that met the needs of many people….it will be many years before that would make a significant dent in the total number of new cars sold. While it may be a worthy goal to push that technology forward, I am not sure I want Saab’s new owner to “bet the farm” on that.

  14. Gregg Z. says:

    Swade: Withe the deadline for final bids being today in Sweden, do you have an idea of the timeline– and will the bidders “break cover” (e.g. will their identities be revealed)? One of the most frustrating things to do with the last year or so has been the absolute lack of transparency– sometimes it’s understandable and needed; most of the time it’s more of a hindrance and leads to wild, rampant and overblown speculation.

    When will the general public know who the bidders are?

    g

  15. Johan says:

    Happy to be of service :-)

  16. ngu says:

    Volvo, now under Chinese ownership, earned US$16.697 billion in revenue in 2010, the latest available figure in http://en.wikipedia.org/wiki/Volvo_Cars . That’s for one brand alone, namely Volvo.

    The Indian owned Jaguar Land Rover also made roughly the same amount in sales (£9.9 billion or US$15.76 billion) in 2010/11 according to http://en.wikipedia.org/wiki/Jaguar_Land_Rover , but that’s the figure for the two brands combined.

    On this score, it seems that Indians are only half as successful as the Chinese when it comes to running premier auto makers. So let the Chinese have Saab, too.

    • davidgmills says:

      That is not a fair comparison at all. Volvo has always sold (at least in the US) about twice as many cars as Jaguar and in the past Land Rovers were hardly sold at all here. Land Rovers are selling like hot cakes here and Jaguars are doing much better than they have in the recent past.