” As Churchill said, If you’re going through Hell, keep going.”
Victor Muller, Chairman of Saab, and CEO, Jan Ake Jonsson, sat down at the 2011 Geneva auto show with a group of journalists and stopped to talk to Lou Ann Hammond, CEO, www.drivingthenation.com.
Saab has nothing to lose and everything to gain. General Motors folded Saab into their mix so well that there was very little Saab-ishness left to it. No more Epsilon or Delta architecture cars from General Motors. Saab has launched an all-new platform named the Phoenix. The Phoenix, according to Jonsson, will give Saab the ability to build the cars they want to build. The Saab 9-3 will be the first vehicle to use the flexible and modular architecture design.
The 9-3 sedan is the volume car for Saab, but the 9-3X is gaining ground. It is the competitor to the Audi A4, Mercedes-Benz C-Class, BMW 3-Series. It is the first statement from the new owners of the direction Saab will take in performance, design, and handling. The new 9-3 will have the BMW 1.6-liter turbo gasoline as it’s the engine, tuned by Saab.
Jonsson confirmed that there will not be a smaller car than the 9-3, which would have been dubbed the 9-2. “It is not in our business plan from the revenue or cost plan. We believe we need to find someone to cooperate with, and in due course, we will decide which way to go.” Muller agrees, ” It’s sad that the company that invented the A-segment doesn’t have a car in that segment.”
Jonsson doesn’t mind Saab being referred to as quirky. At 120,000 unit’s it is a niche brand and needs to stand out. Capitalizing on a small displacement engine is part of Saab’s heritage. So is being quirky, as distinctive. The distinction, Jonsson says, is delivering on new products, state-of-the-art technology, and engine management.
The United States has been the number one market for Saab. How is it now? How are the Saab dealers doing and what can Saab do to keep their dealers happy? How important is the 9-4X to the Saab brand?
Why did Saab sell Spyker?
What will the relationship between Spyker and Saab be going forward?
Victor Muller explained why Spyker was sold to Vladimir Antonov. “The only reason – and the only reason – that we decided to separate Spyker from the Mother Ship (Saab) is the fact that Spyker needed money to achieve its business plan. That wasn’t a surprise because we knew that from the start. But had we been at 25 Euros per share I would have been absolutely comfortable issuing that. But at five Euros per share, I would have to dilute my shareholders, of which I am the largest one, by 22 percent. To fund the car of a business that is .1 percent of the totality. There is no way on earth that I can justify that to my shareholders, it’s simply not doable.”
The company that saved Saab will be able to focus on itself. This procedure took eight months. Saab will change the public name it is traded under from Spyker to Saab.
Muller is looking at bringing down all costs in the production of cars. Saab has a factory in Trollhattan, Sweden where GM recently invested $1 billion in state-of-the-art upgrades. That factory can produce 190,000 units, but they don’t need to make that many units. One idea Muller talked about would be to produce vehicles for someone else that could include a payment-in-kind where Saab builds vehicles for another company in order to leverage the unused capacity in the factory. 2011 will be the year that Saab will be in full production.
Saab has only a brand name in China. When they acquired Saab they went to China and found that Shanghai GM was given notice of termination.
They have since signed with a subsidiary of Sinomach. China Automobile Trading Co., Ltd (CATC) is a large state-owned enterprise established in 1993 with the approval of Chinas State Council. CATC was merged with China National Machinery Industry Corporation (SINOMACH). The importation, distribution, certification of cars for Saab in China will start at the end of 2011. They are also looking at producing locally in China for China with the new 9-3.
All the Saab cars will meet the EU and CAFE requirements and still keep Saab’s horsepower.
Does Saab need a parent company? Muller thinks the perfect storm of 2009 has created access to shared intellectual property from other companies that weren’t there. They will be looking for solid partnerships in IP, engines and other areas. No reason to re-invent the wheel when you can buy it from someone else at a cheaper price without being condemned to selling out to another manufacturer.
Could Muller see a Chinese business taking a stake in Saab in return for starting a business in China? “Sure, anything is possible right now” The BRIC countries still need to be developed. “If you can’t own the premium European brands and you want to partner with a premium brand where are you going to go?” That would be the reason Saab is being “shopped” in China. “You can live on the back of America and China alone. Not for Saab, because they have a heritage, a major presence, in Europe. But a new Indian or Chinese brand, I don’t think they need to go to Europe.”
Are the traditional Saab buyers coming back? Jonsson answered, “many of the 9-5 buyers that left Saab to go to Audi and BMW are coming back. But we’re also seeing a lot of conquest buyers.”
What made Muller so passionate about the Saab brand? “A very sympathetic brand, it’s not aggressive, not in your face. I lived in Amsterdam as a kid and was infected with Saab. The fact that Jonsson made a promise that he would never give up as part of my decision to go through with the purchase of Saab.”
Muller says that by the end of next year Saab will have the widest and newest product portfolio that this company has ever seen since it was founded. American and Canadian took a beating last year. In fact, American dealers were not allowed to order a car since February 2009. Canadian dealers were worse. Saab has 1,000 dealers worldwide, losing only a handful of them during the purchase and quiet time. Sixty percent of the volume is done in the U.K., America, and Sweden. There is a lot of growth opportunity!
Here is Victor Muller talking about Saab, with an overlay of the new product on the video.