My 2 cents on NEVS potentially bringing back the Saab 9-3

A story appeared in Trollhattan’s local paper yesterday stating that NEVS were considering the feasibility of bringing back the Saab 9-3 for sale in petrol-driven form. Within an hour of that story coming out I had several messages asking for my thoughts on the issue. So, here goes.

The first thought that came into my mind was “the cracks are beginning to show”.

I’ve called NEVS’s business plan (or what little we know of it) into question a number of times here on this site, not because I don’t believe they can do it, but simply because it makes no logical sense and I want to understand it. It seems to be a very long term strategy, which is exactly the perspective they must have in the automotive business, but one that simply doesn’t add up.

Now there’s this story about rebuilding the 9-3, which seems to be a very short term solution. That’s strange from a company that was speaking to the Saab faithful gathered in Trollhattan only a few weeks ago, telling them that their focus remains wholly on the electric vehicle market and the potential in China as the EV market expands there.

So why would they change their direction so quickly?

Primarily, to get the wheels of the company moving, I’d say. It costs a lot of money to have that factory sitting idle and they’re going to need to hire staff at some point. Best to do it sooner rather than later, if possible, whilst some experienced hands are still available. Best to try and get some cash inflow and start to rebuild the brand based on a product rather than just a thought.

But it still smells a little funny to me.

You’ve got to take off your Saab enthusiast’s hat here and look at this objectively, from a market point of view. In my opinion, this plan’s going to face a number of very serious challenges. A re-built petrol driven Saab 9-3 would have to be:

  • Legal and reputable
  • Cheaper than the old model
  • Better than the old model
  • Distributable

Legal and Reputable

I guess this will be dependent on where they want to sell a ‘new’ Saab 9-3. Right now, the 9-3 that Saab sold prior to bankruptcy would not be eligible for approval in the European Community as it doesn’t meet pedestrian safety regulations that will come into force in February 2013. If they don’t want to sell in Europe, that’s OK. Maybe China doesn’t have such strict approval requirements and they could sell it there, but that’s when you move into the “reputable” part of my argument.

NEVS has secured the use of the Saab brand name and that implies that certain things about the brand are important to them. Safety is an attribute that Saab placed above all others. They made no compromises when developing a new vehicle and if NEVS were willing to make such compromises (and I’m quite sure they don’t want to do that), they’d be making their brand-rebuilding task all the more difficult.

What’s more, safety is no longer the selling point that it used to be. Safety is now considered standard across the industry, so to offer a vehicle with sub-standard safety ratings stands out for all the wrong reasons.

A rebuilt Saab 9-3 would therefore need to be modified in order to improve its pedestrian safety ratings if they want to get EC approval for sale in Europe. The Saab 9-3 (MY2003 onwards) got just one out of four EuroNCAP stars for pedestrian safety, hence Saab’s determination to replace it with a Phoenix-based vehicle in the last quarter of 2012, before the new regs came into play.

I spent much of my last few years at Saabs United trying to teach a bunch of impatient enthusiasts that there are no fingersnap solutions in the car business. Improvements, enhancements and upgrades take time and cost significant money. An item as innocuous as a door handle can be connected to a dozen or more different electrical systems and any change to that component means development of the part and testing of all the components connected to it. (Read my piece from Inside Saab on electrical integration.)

A remodelled front end along with the active safety systems that may be needed to help an ageing Saab 9-3 pass 2013 EC ‘Ped-Pro’ regulations will require significant investment.

And that leads me nicely into the next bit…..

Cheaper than the old model

Everyone wants something for nothing and everybody wanted the Saab 9-3 for less money than what Saab were asking. And that was back in 2011. By the time a rebuilt Saab 9-3 is available in 2013 or 14, the vehicle is going to be lumbered with extra development costs and the higher per-unit costs they’ll pay for asking suppliers for small quantities of parts. There will also be more significant barriers to entry/acceptance in the general marketplace due to the car’s age. It’s going to have to be priced accordingly.

Despite all that, it’ll still have to be…..

Better than the old model

This one might be dependent on where they wish to sell it.

If they skip the EC requirements for pedestrian safety and sell it only in the remaining markets in which it might be eligible (i.e. most likely as a foothold, entry-level vehicle in China), it’s quite possible those markets won’t be all that familiar with Saab. They won’t have so much exposure to the previous model for comparative purposes, nor will they have a motoring press so quick to compare the new model with the old.

Assuming that they want to do this properly, however, they’ll have improvements to make.

I had a chance to drive the Saab 9-3 Griffin with the direct injected 220hp engine and it was fantastic fun. I have no disputes with the car’s merits and the improvements that Saab were already making to the 9-3 in its twilight years. The market, however, did have its disputes and a rebuilt Saab 9-3 would have to be significantly better in terms of handling dynamics, standard equipments and interior materials (to start with) in order to make an impression on two years worth of improved competition.

Remember, too, that a rebuilt Saab 9-3 will most likely have to be re-engineered to take a new engine as GM supply of that DI 2.0T is unlikely. The costs associated with such a task are huge. Then there’s the question of whether or not a new engine has to have comparable specs to the old one. The Saab fans that I’m used to dealing with wouldn’t accept anything less, but then maybe they’re not the target market here.

Distribution

I won’t say too much on this because it’s self-evident to anyone with an interest in Saab – the trust between the company, its dealers and its customers has been significantly damaged. It’s not beyond repair by any means, but like everything else, it’s going to take massive investment to get sales channels established again. Added to that, you don’t want to try and re-establish a damaged brand with a half-assed effort. You’ve got to do it right, from your vehicles to your network and then your marketing.

Still, they’ve got to make that investment some time. Maybe sooner rather than later is better?

——

Conclusion

Like everything else that NEVS has said so far, the possibility that they’ll start building the old Saab 9-3 as a petrol driven vehicle once again leaves me scratching my head. It raises more questions than it answers.

The 9-3 was a great car for Saab enthusiasts even just 12 months ago but it’s a very expensive proposition to update it to 2013/4 standards. The fact that NEVS, only a few months into their ownership, are interested in doing such an about-face on their EV-only strategy also makes me wonder about their business plan. Is their EV plan so tenuous that they need to consider this? Has their resolve been shaken? Or is it just opportunistic pondering on their part?

I find it hard to see how this is feasible, given the costs of updating the 9-3 and the potential negative feedback from the industry. I can’t see it selling in big numbers without significant improvement and I can’t see how the cost of those improvements would make it economically viable.

The major brand recognition for Saab is in Europe, yet they’ll have to spend buckets of money to qualify the car to sell there. NEVS’s focus has always been on China and yet the question still remains – why build in Sweden to sell in China? The only way this makes sense is to do a minimal-cost upgrade but if you want to start building Saab as a premium brand in China, selling a lesser car first time around is only going to make brand-building harder when your EV-1 comes around. And don’t forget the opportunity cost of updating the 9-3 as opposed to completing the EV-1 quicker.

Everywhere I turn, I seem to run into a brick wall.

Of course, as always, the solution could be as simple as “We’ve got buckets of cash and we can do this”. I hope so, because it’d be great for Trollhattan and great for Saab if they can. I (still) just can’t see how at this point.

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18 Comments

  1. Well, I agree with you. This simply doesn’t seem to be consistent with their stated plan. I also agree that simply restarting the plant and churning out the same cars won’t work, either.

    Puzzling. I’d guess that if I were in charge of NEVS for a day and had to hold to the l0ng-term goal of electric cars and specifically electric cars in China, I’d attempt to import some parts/partially completed Chinese 9-3’s from BAIC and roll those out as Saabs. I guess? Maybe? If I were really liquored up?

    Nope. Even that makes little sense. I can’t figure it.

  2. Great write-up Swade. You made some very interesting points that I never even considered! When I first heard about the news I was excited for a moment, then the doubts/questions began to dance around in my mind.

    Personally, I do not see how NEVS is going to get SAAB back to its old glory days when it was setting speed records in Trollhattan and at Talladega and had a “reputation” for building extremely safe cars, that set engineering standards yet retained their quirkiness while being a blast to drive!

    Thanks for your insight.

  3. Whilst Saab may have been able to sell the OG900 for 14 years, trying to sell the aging 9-3SS which debuted in 2002 even at 10 years of age will be difficult indeed. The OG900 had acquired a cult status by the middle of it’s lifetime which certainly helped sell a very dated car for well over 10 years. The 9-3SS has no such cult status and trying to revive it now would attract few buyers other than Saab fans, unless it was very cheap? NEVS spending lots of money on the 9-3SS to keep a toe in the water until a Phoenix based car is available has some logic I guess, but it will likely make little or no income for Saab.

  4. if nevs confined production to the 9-3 wagon and soft top there might be buyers [but motoring journalists would have a field day], a reworked 9-5 mk2.5 would make more sense [gm needs to come to the party], nevs could enter contract manufacturing to pay the bills….

  5. Well, not much to add to the above, especially since I was one of the persons bugging you about this shortly after the announcement đŸ˜‰ You know my thoughts.

    One thing you did not mention here though is the role of suppliers, who actually have to agree to this plan in order for it to work. Swedish media mentioned already yesterday that even some Swedish suppliers, in this case Kongsberg Automotive, are very reluctant about teaming up with NEVS for this purpose.

    However, as I mentioned yesterday, local suppliers are the least challenge NEVS faces. I wouldn’t be surprised if this whole plan already gets shot down earlier. In order to build a 9-3, you need a lot of parts from a few large foreign automotive suppliers, and they were the first to stop doing business with Saab in the spring/summer of 2011. So I wish NEVS good luck convincing them.

  6. This announcement is a feasability study. It probably will amount to just that, a study. Then it will be put in a folder on a shelf in the back room and left to gather dust.
    Bring out a fresh faced, advanced designed, intelligent and above all Good Looking car that the market is nearly ready for now. The Chevy Volt actually has some redeeming features, not least in changing the automotive landscape’s impression of the viability of e-cars. The next SAAB needs to be much better than the Volt, and much better than the current 9-3. Which is already a 15+year old design!!!(taking into account lead up times to get it to market)
    I love my Hirsch 9-3 SS, but it can’t be taken seriously against Volvo’s new offerings, not by a long shot.
    The ‘Family’ at BMW must be falling about laughing at this latest development.

    1. I’ve said it here before, but I’ll repeat myself: I now drive a Volvo V60 D4 R-Design after having driven a Saab 9-3 SC Linear TTiD for a year. The Saab, as a basic version, was more fun to drive and more sporty than a basic V60. That is the reason why I chose the R-Design package. So you need to upgrade the V60 a bit in order to get the same driving fun as a basic 9-3 SC. A question of different focus among the manufacturers I’d say. Saab has always been a more sporty brand in general than Volvo, but the R-Design package really makes the V60 a fun car (and it looks amazing).

      However, in terms of interior quality, technology, driver support, entertainment system etc the V60 is lightyears ahead of the 9-3. The 163 hp diesel in the V60 is much more snappy and responsive than the 160 hp diesel in the 9-3, while the manual gearbox in the V60 is much, much better than the one in the 9-3 (the gearbox I always found the big weakness of the 9-3). I’ve used Saab’s entertainment system included in more expensive 9-3 models as well, but it doesn’t come close to the experience the V60 offers, with its seamless Bluetooth connection and built-in GPS/phone system.

      The only things I really miss about the 9-3 are the fold-out cup holder and the Nightpanel. That’s it.

  7. Ok, so I’m gonna rant a little here…

    I think people in the auto industry have a hard time laughing at all in the current situation. The tides can turn very fast, and the outcome can be very brutal. I think it is safe to say that even a company like BMW is constantly evaluating business opportunities without any prejudices at all. I’m also a little tired of this constant negative whining about a car model being “old”. As soon as a car model is three years old the auto journalists starts asking about a facelift, because the car then looks old, doesn’t feel fresh, the competition is more modern-looking, yada yada yada… When the car model is six years old then it is basically crap that consumers should stay away from, because the platform can’t cope with anything, the handling is absolutely rubbish, the drivetrain horrible, safety is non-existent, infotainment is stone-age, yada yada yada… But despite all this new models (and how new underneath are the really?), the market is in turmoil because many customers don’t buy new cars anymore. The constant design changes mainly affecting front and rear and just having prices on spare-parts going crazy… The modern dashboards with its myriad of blue-light infotainments buttons… It obviously doesn’t help on the market at the moment. So there is room for doing something differently, to take another path than the one demanded by auto journos. But for NEVS to pull that off requires huge amount of money. Maybe they have it? I don’t know, but nothing I have seen so far indicate that. But maybe it is just their so called “PR” that is extremely lousy and unprofessional…

    1. CTM,

      I agree with you 100%.

      This “old/new” thing has been way overplayed, at least by English-speaking journalists. I’ve been reading a lot of French auto journalism lately, and the difference in perspective can be amazing. Just last week, one of my favourites commented that the VW Golf has been fundamentally unchanged since the Mk3 came out in 1991, and that’s not a bad thing. The new Mk7 is the first major redesign of the platform, but it uses the same drivetrains and general architecture. His point was that this explained why he found the new Golf (and the previous one as well) to be so much better than the “all-new” MB A Class. Every aspect of the Golf has been tweaked and optimized over the past 20 years. The A Class has all the right specs, but it’s just a first draft (much like this comment).

      About NEVS: they should wait until they have something real to show.

      I understand why they are “looking into” this option. They have a factory and most of a product, so they really need to explore the possibilities, even if it’s not the main focus of their business plan.

    2. While I agree on principle, the fact remains that an older design is not seen as being on par with a newer design with newer technology by the purchasing public. Thus, it’s a marketing issue more than a technical or value issue.

  8. Distribution would be the biggest hurdle here, I think. The US network is pretty much gone, and I would think this isn’t an isolated incident.

  9. Hi Swade
    very interesting article and fair comments….
    We probably shall never know what changed the business plan … it maybe something like a delay in their battery factory …..!!!???
    However, while considering your comments, I believe thsi is a positive move in trying to save what is left: community, dealers, skilled personnel, attention for the brand, Trollhattan, etc.
    Bye
    c

  10. There is no economic market for resurrecting the prior 9-3. Unfortunately Saab is damaged goods at this stage, let alone the fact that the 9-3 is over a decade old. The world has moved on.

  11. .
    My 9K just went to her Birthday party.

    There, she ate all the new stuff, she was given & loved it all, thankfully

    Now, revitalised, she’s going like a bomb & all for a few pints of oil & other stuff.

    Old. become’s new every day.

    NEVs is another matter,though

  12. If the production rights of the old 9-5 can be sold to BAIC in China, why can’t NEVS owned Saab do likewise for the 9-3? I bet selling the production rights to others could be more profitable than actually producing the cars in-house.

  13. FWLIW: The EV1 is supposed to be based on the 9-3. So at least some of the things that require upgrading (ped. safety) will also apply to the EV1 as well.

    And they need to get the supply of parts flowing. This might be a shorter way to achieve that goal. At this point NEVS are not doing much more than exploring this question.

    Either way: Interesting times.

  14. As stated above, this announcement is only about a feasibility study. I have to say that to me it is a logical step, despite other reservations I have about NEVS. As an entrepreneur, you may have long term plans and you may work towards achieving these but at the same time if you already have facilities and some technology available, you should have a look if it makes any financial sense to employ these in order to keep the facilities occupied until you can start implementing your long term plans. Despite 9-3 being well of the pace against it’s competition today, I imagine it could sell in relatively decent numbers in some markets like China, India maybe Russia, Brazil… The fact that they are looking into petrol engine even though the easier option would be Fiat’s diesel as used in the past shows that NEVS is not really considering Europe as a market for this vehicle. If they manage to work it out with the suppliers it could be an OK stopgap till they have a proper model in line with their goals.

  15. I find it interesting that there’s no mention of the US market in this piece or any of the comments so far. As I understand it, we’re a fairly important portion of the global car market, including Saab’s past market. And we’re not really big on things like pedestrian safety, as far as I know. Is there any reason why they couldn’t sell the current 9-3 in the US? If they throw an iQon (Or other fancy infotainment system) into it, people will buy it. That’s the current thing that a lot of people are looking for – better in-car electronics. People flocked to Ford when they announced the Sync, and I don’t see why the same thing couldn’t happen to Saab if they build 9-3s for the US market.

    It might also help keep the remaining US dealerships, or at least some of them, limping along for the time being. Some are getting by on parts & service, but being able to sell even a relatively modest volume of cars would I’m sure help their bottom line enormously.

    -AGT

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