Thoughts on Youngman’s departure and the future of electric/hybrid Saabs

I figured I better catch up with what’s happening in Saab-land.

It’s been a busy week with Youngman “pulling out” of negotiations to buy the company and a new company gaining momentum as a possible buyer. They say a week is a long time in either politics or football. It seems a lot can happen in a bankruptcy, too.

Youngman

Reports are a little vague and they depend on which one you read; did Youngman jump or were they pushed from negotiations to buy Saab? Either way, they’re reported to be out of the picture. There are theories that Youngman were dismissed because they were too dependent on Chinese government approval, etc, etc. Let me pose my own theory based on a little prior knowledge and some educated guesswork.

Youngman were a mess of an organisation and my guess is that the administrators finally saw through their well-intended public statements and realised that they really are what they appear to be – a rabble. NDRC approval was never a concern as far as I can remember, so that’s just an excuse. Youngman are very well connected with the Chinese government and they’re in need of a company like Saab to justify all the G-money they’ve spent on empty factories back home in China. But they were also a bloody mess, which is why I’ve never favoured their bid to buy Saab. It seems the administrators finally think the same way.

I have to say that I’m pleased on Trollhattan’s behalf for their absence.

What’s Sven backwards?

It’s NEVS. And that’s an acronym for National Electric Vehicle Sweden.

NEVS is the new, emerging party looking to buy Saab with an eye to possibly making either/both hybrid and/or pure electric vehicles. At the top of the company is a former Volvo Trucks boss named Karl-Erling Trogen and another guy named Mikael Kubu, who’s said to have some history with insolvency and corporate reconstructions. They’re the front for some more Chinese and possibly Japanese money.

From Life With Saab:

“It’s not just about electric cars, but also about larger volumes of hybrid cars related to a long term development in electric cars,” a source said.

That tells me they’d be very interested in the work Saab did with eAAM on the rear-electric drive system that Saab were going to use in the new 9-3. They’ll need to be quick, though. eAAM is a business and I’ll wager they haven’t been hanging around, putting off talks with other OEM’s while Saab get their act together.

The big question is whether NEVS will also be interested in the new Phoenix platform (the 9-3 replacement) as well. I certainly hope so as it’s said to be a cracking design and mostly finished.

NEVS seems to be gaining momentum in the race for Saab with some suggestions the Swedish government favour their interest. This wouldn’t surprise me in the least, but don’t expect a flat-out statement to that effect.

Possibility and Stickability

The other big question that people are pondering in light of this consortium’s emergence is “Do I find the prospect of Saab owned by NEVS an exciting one?”

On one hand there’s a definite break in continuity here, which is a dampener. Whether they can build a link with Saab’s past will depend on the philosophy and hardware they choose to adopt. Will they be able to link up with Saab’s past vehicles to produce something ‘old’ whilst developing something new? Will they need GM’s permission to do so?

Any new owner is going to have to contend with incredible difficulties in terms of staff, dealer network, administration, marketing, engineering – and all of that’s before they make a single car. Even if there’s a small core of Saab personnel remaining within the wider organisation right now (and there is), this will essentially be a new organisation and they’re going to have a huge mountain to climb.

Personally speaking, whether it’s these guys who get Saab or Mahindra, I’m going to be happy to see a car company operational in Trollhattan again.

I’ll also be very interested in seeing the direction a new owner decides to travel with a new Saab. Will we all remain enthusiasts for the brand, or will we just attend conventions and festivals, remembering the good old days?

The answer to that question is going to boil down to the one thing that rules in the automotive industry – the product.

A new Saab will always have an engaged audience interested in what it’s doing, but as we all learned in 2011, that doesn’t guarantee anything. You’ve got to have the financial strength to survive the start-up phase, the distribution network to sell the cars and an advertising budget big enough to let everyone know that you’re alive. And the success and effectiveness of all that will depend on the product.

You can sell crap cars in the automotive industry – GM’s continued existence beyond the 1980’s is proof of this – but in today’s market and economic climate, you can’t continue selling them for too long. It’s all about the product, people, and the market will find you out eventually.

A decision on the ownership of Saab can’t be far away. It’s taken too long already. A lot of traditional Saab owners are replacing their Saabs with other brands right now. It’s the ownership cycle in action. I just hope they’ll keep an eye on what’s happening in Trollhattan over the next few years.

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14 Comments

  1. My mantra now is to stay cool.

    I got a letter from Subaru the other day where they wrote that my car and I as a driver of a special vehicle where of great interest to them…
    Well, they have to do their job. Will I trade? No. Not now and hopefully never. Do I drive a special vehicle? Sure do!

    Cheers/Tom

  2. I never had a good feeling about Youngman, and some of the rumors surrounding the company– even if half true– were alarming to say the least. I’m relieved that they are out of the running.

    Whither Mahindra? One report I read was that they are now suddenly seen as lagging in the race for Saab due to unspecified “political reasons.” Whose politics then? A snag in Swedish-Indian international relations? SweGov’s openly biased, clear favoritism towards “green” companies (like electric cars) and their disdain of heavy industry? The fact that NEVS is technically a “Swedish” company (albeit backed 100% by Chinese and Japanese money)? What does your gut say about this Swade?

    Interesting times ahead for sure.

    1. I still favour Mahindra, though I have no concrete reason to say why. It’s not as if they’ve come out and spoken about their plans. I guess the fact that they’re a real established company with a presence in the car industry gives me something to anchor my hopes to.

  3. Cant be too long now. Gee I hope mahindra can pull a rabbit out of their hat now, as they are still my preferred buyer. Either way our brand will love on!

  4. How long can this drag on? A deadline is a deadline….until someone else pops up. Swade, you are right about it being a New Start. There is really only one thing left. The font on the badge and the name itself. Not the backing plate though. I hope the new badges last better than the old ones. Ironic???

  5. I hope they intend to use the Saab name and the idea of electric /hybrid cars fits nicely with Saabs history of innovation and looking to the future ,I hope it all works out for Saab and carries this great brand forward and into the future.

  6. Swade: As usual, a very thorough look at current facts and reality.

    Prius is an interim solution at best to the next generation of power systems.

    The fact is that gasoline and diesel will not be the power system of the future, and there will never again be a power system that remains relatively unchanged for a century as internal combustion.

    Is NEVS the future of Saab? Mahindra will have to be working on a new power system to be a future player.

    What ever happened to the partnership between Saab and the advanced battery development group in Boston?

    Battery power systems proponents today know that they need to deal with weight, range and cost, and my understanding is that progress is being made.

    One concept I’ve read about here in the United States is the idea of universal modular batteries that can quickly change out a fully charged battery for a mostly spent battery at service stations that would essentially replace gas stations. The benefit is eliminating the need for the overnight plug in. The challenge is the return on investment for the station infrastructure required, and who would make that investment.

    The new owner would require very deep pockets. We have a hybrid set up with the Phoenix re worked to be the next generation 9-3. Building on that base gets Saab to market more quickly, but the challenge is whether the technology is better than Prius, and the fact that the car would have to be priced well below Prius. That said, Phoenix with a competitive power system gets a car back to market quickly … production in three years.

    Longer term, though, new owners need to invest in the future of green power, and be astute enough to develop the system that will define future power. Is it battery? Is it hydrogen? Natural gas? Solar? Fuel Cell? Pulse Technology? Steam?

    Is the new owner prepared for the long term continual investment in not only identifying and developing the future power plant, but also prepared for the ongoing R&D investment required to keep Saab at the cutting edge … always ready to introduce the next advance that consumers will recognize as an innovation that delivers added value.

    Deep pockets indeed. Great rewards for the right system … disaster if another competitor finds it first.

    Now that is what I call risk!

  7. “….You can sell crap cars in the automotive industry – GM’s continued existence beyond the 1980′s is proof of this – but in today’s market and economic climate, you can’t continue selling them for too long. It’s all about the product, people, and the market will find you out eventually…”

    How come Toyota seem to get away with it unashamedly? I’m referring to the current Camry. What a pile of s#1t.
    Sure, they are comfortable, quiet, quick for size and above all, reliable. And that is all a lot of people look for in a car. Against that, they are about as involving to drive as a tub of margarine. It is such a remote experience. As for styling? The current Honda Accord demonstrates what a Camry should look like. It’s as though Honda took a Camry and said “let’s show them where they went wrong”.

    My work place has a fleet of Camry’s and I was recently unfortunate enough to have an accident in one, when an elderly lady attempted a U-turn right in front of me. The resulting damage to the Camry was very extensive given the low speed of the impact (I was doing about 45km/h at the point of impact and the airbags failed to deploy). Another colleague had a reversing incident which caused a good sized dent in the boot lid of a similar car: The paint was thinner than paper and peeled off in a sheet – to reveal bare metal! It was unbelievable. The very worse thing about the Camry is the visibility approaching intersections and roundabouts. Almost every time I drive it I am staggered by the blind spots caused by the A pillar/door mirror combination. I am staggered that its design was ever allowed to go ahead for this reason alone.

    So there, for me, is a classic example of a CRAP car but one that sells in millions. It comes down to market expectations. And the market for SAAB owners has traditionally been filled with high expectations. From their current position it is hard to imagine how they can fill these shoes in the direction they seem to be heading, unless they are aiming at a completely new demographic.

    1. Ian, I think you might have answered your own question with ‘reliable’. They’re also reasonably well equipped, can accommodate 4 in reasonable comfort and provide a decent combination of power and fuel economy.

      And what does your average consumer want today? Exactly those things. They want a reasonably comfortable transportation appliance to get their family where it needs to be. That the paint might be thin isn’t too much of a concern because that only matters when something goes wrong and hopefully for the new car buyer that’s years down the track.

      It’s not exciting seeing the car industry reduced to something similar to the whitegoods industry, but that is what’s been happening over the last 30 years. It’s a segment a new Saab won’t be able to compete in, just like the old Saab and despite people’s called for Saabs to be made cheap. They have to be built up to a standard rather than down to a price.

  8. Yep Swade your reponse is exactly what I was inferring..indeed I have used the term ‘whitegoods’ to describe the Camry on many occasions. Excatly why I am very happy to drive my Classic 900’s

  9. Thanks for the clearly written, insightful updates on all things Saab. Really missed your input since the bankruptcy, so I am glad to have found your new blog. Given the upheaval of 2011, ended up getting a ’12 Outback for our family hauler vs trying to get a 9-4, but still using a ’06 Saab 9-3 (my 5th Saab) as my primary vehicle.

    Hope my car lasts long enough to be replaced by another Saab, but if that is not an option, my current infatuation is the upcoming ’13 Ford Fusion. Could get it in the 2.0 turbo AWD mode, which should be a sporty (and dare I say “stylish” with its new look?), yet practical choice that reminds me of my current Saab —but, if at the right price/performance points, am also quite interested in its hybrid and plug-in electric powertrain options. Thus, this NEVS development with Saab is intriguing, if not quite as immediately comfortable as Mahindra.

  10. “A lot of traditional Saab owners are replacing their Saabs with other brands right now.”

    Right you are Steven…with one more “biting the dust” in June.

    I’m locked into my Audi A5 lease for another 16 months, and we have ordered a 2013 Audi A4 for my wife, who will be giving up her 2003 9-5 Aero Sedan at the end of June. The A4 is set to arrive July 9th.

    A friend, who WAS a SAAB Master Tech, is buying the Aero at a fair market value from me. He has purchased many of our former SAABs, and while the car is still worth something to someone, I had no choice but to sell it.

    Still leaves us with our two 1990 900 SPGs, however. 😀

    Not a good scenario for SAAB, if & when they manage to restart production of whatever type of vehicle is in their future. But, if it is only some type of exotic electric hybrid, they had better have some “mainstream” vehicle(s) to offer as well, or else things may continue to be dicey for them. As Hybrids only make up about 10% of car sales worldwide currently, SAAB will need to have a line that includes non-hybrids as well.

    And yes, I will be watching events in Trollhattan in the years to come, with much interest and hope for the SAAB workers and their families.

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