Li Shufu, Chairman Geely

Two months ago, we wrote that Geely will pour $11 billion into a development program for the next generation Volvos, and that half of that money would go to Sweden. Our commentariat did not quite buy that and said that the technology will go to China. Right they were.

Volvo will open a new R&D Center in Gothenburg alright, where it will develop the announced modular architecture called SPA (Scalable Product Architecture) and VEA (Volvo Engine Architecture). But it will be a cross-brand strategy for Volvo and Geely.  A modular architecture has high up-front costs, it only makes sense when deployed in volume. Strangely, Volvo now says that the R&D Center will develop a new C-segment car, and “in parallel, the development of the Volvo Cars architecture for larger segments (SPA) continues within Volvo Cars’ own R&D organization. The first SPA vehicle will be launched in 2014.” Lower volume larger segments are not as much suited for modular as smaller segment high volume cars.

But first, there will be painful cuts. Volvo isn’t doing so well, and it needs to shed “1,000 more jobs and save more than $200 million to reach breakeven this year after sales and Chinese growth have lagged,” as Reuters reports.

Volvo already did cut 900 contract staff last year, now  750 consultants and some white collar staff will need to go.

After an alleged Swede,  Kai Johan Jiang a.k.a.  Jiang Dalong bought bankrupt Saab’s remaining assets for cheap, we could not help but reminding the faithful that this will not result in a resurgence of the Trollhättan industrial base. We figured that at the very best, Saab will march off to China. If Saab won’t manage to destroy investor’s dreams and money yet again. Both rise in probability.  Saab’s buyer, Chinese-controlled NEVS, has secured  an investment deal with the Chinese city of Qingdao, Reuters says.

Qingdao is situated in the Shandong province in northwestern China. Through the deal, it hopes to join the ranks of Chinese provinces that own a carmaker.  NEVS said in a statement that the Chinese city, via its Qingdao Qingbo Investment company, would invest 2 billion Swedish crowns ($307.33 million) in NEVS, after which Qingdao would get 22 percent of the shares.

NEVS had bought the assets of Saab for an undisclosed sum, but reports put the price in the neighborhood of $274 million, which is awfully close to the money coming from Qingdao. Qingdao is also close to Jiang Dalong. He was born nearby and he serves as “an economic adviser to the Shandong provincial government on policy matters.”   We always wondered from where the money to buy Saab would come from, we wonder no more.

NEVS said it would launch its first electric car at the start of 2014 – a year from now, don’t be surprised if it won’t make the deadline – it also is looking at the possibility of re-launching the old Saab 9-3 model with a conventional engine. A production plant would need an awful lot of more money to get going.

NEVS says it wants to ship cars it builds to Qingdao port. As pointed repeatedly,  importing EVs to China does not make sense at all. In China, new energy cars can only benefit from generous government policies if the car is built in China and sold under a Chinese brand. NEVS says it would eventually build a factory in Qingdao, “as production at the Trollhättan plant will reach capacity.”

Saab’s remaining true faithful are elated by the news.

Two years ago, China’s Geely bought Sweden’s (and Ford’s) Volvo lock, stock, and barrel. Among the assets: A few good Volvo platforms, along with a fair technology licensing contract from Ford. However, the platforms are not getting younger, and from what I heard back then, the licenses with Ford also have their limits. Geely has to invest into the future if Volvo is supposed to have one. Price of admission to the future: Many times the purchase price of the car company.

In August 2010, Geely bought Volvo for $1.5 billion. Now, Geely will pour more than seven times as much, $11 billion until 2015, into a development program for the next generation Volvos, Reuters says.

The billions should also be a lecture to private equity funds and closet captains of industry who want to snap up moribund car companies on the cheap.

The main part of the R&D will be performed in Sweden. About half of the $11 billion will go to building the infrastructure in Sweden that helps bringing the new technology to market. According to Volvo, this amounts to “one of Sweden’s largest ever industrial investments.”

At the heart of the project are two programs: SPA (Scalable Product Architecture) and VEA (Volvo Engine Architecture).

VEA is the basis for a new four-cylinder fuel-efficient engine family. The big challenge is SPA.

SPA appears to be a variation on the modular systems that have been pursued mostly by European and Japanese carmakers. Volvo says its SPA consists “of shared modules and scalable systems and components, all manufactured in a flexible production system.” These frameworks are considered to be the high art of automotive engineering. Volkswagen’s MQB/MLB/MSB architecture is a notable example.The modular systems, and not cheap labor are key to flexible low cost mass production.

Explains Volvo’s R&D chief Peter Mertens:

“SPA makes us technologically independent, without any link whatsoever to our previous owner. The new architecture covers about two-thirds of our total sales volume. With about 40 percent of all components shared by all car models irrespective of size, we will benefit from economies of scale.”

The architecture was first shown at last year’s IAA motor show in Frankfurt in Volvo’s Concept You vehicle. The first car model based on the new architecture is the Volvo XC90, planned for the end of 2014.

When Geely bought Volvo, many expected that the company would be dismantled and shipped to China, and used as a Trojan Horse for cheap Chinese cars coming to the West.

None of this happened. To this date, there is no Volvo production in China, although Volvo took steps to get Chinese production going. Being a Swedish entity however, Volvo is treated by the Chinese government just like a foreign carmaker and needs to wait for government approval.

Anemic demand is causing Volvo to shut down their main Swedish factory for one week, starting October 29th.

The shutdown coincides with a holiday week in Sweden, but the move still comes at a time when European auto sales are struggling amidst dire economic conditions. Volvo is targeting sales of 800,000 units worldwide by 2020, and company officials say that they are still on track to meet this goal.

The most troubling piece of information comes from Jan Gurander, Volvo’s acting CEO, who told Reuters

“Europe is the main market for Volvo Car Corp. and the continued recession is naturally affecting the demand for our cars,”

That’s enough to put anyone in the hospital. Unfortunately, stress related incidents are a very real phenomenon.

When Volvo introduced the S60 in 2011, the Swedes advertised their mid-sized sedan as the naughtiest Volvo ever thanks to a 300HP turbocharged engine. While I’m sure former “R owners” would disagree, the S60 has met with sales success with over 18,000 units sold so far this year, a 14% increase over last year. In 2012 Volvo added a less powerful FWD model to the mix to cut the price of entry. For 2013 Volvo has further expanded the S60 line by adding a torque vectoring AWD system to the lightest S60. Volvo also tells us they have completely refreshed their T5 engine for 2013 and tweaked the transmission for the naughty Volvo’s first retouch ahead of the rumored 2014 refresh. Huh? Yep, Volvo’s gettin’ down with the yearly refresh. Does that make the T5 AWD the naughtiest Volvo ever? Let’s find out.

Click here to view the embedded video.

Exterior

From the outside, the S60’s sheet metal is a departure from Volvo’s traditional past, but still retains Volvo’s strong shoulders and something of the iconic Volvo two-box style. If it were not for the over-sized proboscis, the design might rival the original S80’s form for the most elegant Volvo ever penned, but as it is, passengers and observers were mostly undecided whether they liked the schnoz or the short trunk lid. Light pipes in the tail lamp modules, subtle swoops over the wheel arches, and a coupé-like C-pillar conspire to add a touch of modernity to the new S60. Polarizing style has never been a Volvo hallmark however and taken as a whole the new S60 is conservative luxurious rather than daring. As before, Volvo remains the Birkenstock to BMW’s Prada.

Interior

Birkenstocks are comfy. Prada? Hit and miss I’m told. And so it is with Volvo and BMW interiors. The S60 is only 3 years old, so aside from massaging color and trim options, the only substantive change is the new transparent shifter. I’m not quite clear what Volvo was trying to accomplish with the new lighted plastic knob. Whatever it was I’m not sure it worked. Still, the rest of the cabin is pure Scandinavian Chic from the soft dashboard to the floating center console and supremely comfortable seats. Despite lacking the range of motion that the competition affords (seriously, have you see the number of buttons on a BMW sport seat?), Volvo’s thrones continue to be the segment’s ergonomic benchmark. Helping keep the interior trendy interior is a new black/baseball glove color scheme. Volvo has also improved sound deadening materials to reduce both road and wind noise in the cabin.

Once upon a time Volvo’s sedans occupied a half-step between the C and D segment cars from the German competition. Fast forward to today and the 3-Series has caught up with the Swedes and the S60 and 328 are essentially the same size. The BMW’s dimension stretch pays dividends with two more inches of rear seat room, an important number because four six-foot-two adults fill the Swede to capacity.

Like many luxury cars in the industry, Volvo has taken to a coupé-like rear profile that reduces the trunk opening to more of a cargo slot. This problem isn’t unique to Volvo, but the opening is a hair smaller than the new 328i’s recently enlarged cargo hold. As with the S60 models we reviewed earlier, the T5 AWD continues to use trunk hinges that cut into the available trunk space as well as the opening.

Infotainment, Gadgets & Safety

Volvo’s Sensus system has been around for three years and continues to deliver a competitive experience in the segment. The 7-inch LCD is essentially the same size as other entries in this segment aside from BMW’s 3-series which brings an 8.8 inch display to the fight. While Volvo has fixed many of the glitches the original system suffered from, the system still does not allow for voice commanding your USB/iDevices like the latest Acura and Lexus systems. Still, the Germans haven’t figured this out yet either. Overall the system is more intuitive than COMAND and MMI, but not as snazzy as iDrive. While I’m complaining, Sensus lacks internet connectivity and App integration that MMI and iDrive sport. Does that matter? Probably not, but I’m sure someone cares.

On the gadget front, Volvo is touting their new full-range cruise control which will now take the S60 to a complete stop in heavy traffic and keep you stopped until traffic moves again. (You just press the resume button.) The system works extremely well and easily ties with Mercedes’ Distronic Plus as the most natural feeling radar system. Bundled with the optional ($2100) radar system is a collision warning system with tailgating alert, lane departure warning, road sign information and automatic high beams.

Volvo’s City Safety system is standard on all S60 models and uses a camera and laser scanner to watch traffic and pedestrians ahead of you. For 2013, the system is active up to 31MPH (up from 19MPH) to keep you from running down Jimmy on his way to school. While the system isn’t perfect, Volvo claims the Volvo models with the system is responsible for the S60 and XC60 being involved in some 25% fewer at-fault accidents than the competition.

Drivetrain

Volvo may have committed to an all four-banger future, but that hasn’t prevented them from face-lifting the trusty 2.5L 5 cylinder for 2013. Yes, you read that right, this is not the same 2.5L 5-cylinder engine under last year’s hood. To improve efficiency, Volvo increased the compression to 9.5:1, dropped in new pistons, a new crank, and revised the software. The result of the overhaul is a 1MPG bump in fuel economy, but more importantly, a new over-boost feature is along for the ride. While the performance figures (250HP at 5,500RPM and 266lb-ft of twist from 1,800-4,800RPM) are the same as before, overboost cranks the twist up to 295lb-ft for 10 seconds when you bury the throttle. In addition to the extra twist, Volvo tweaked the Aisin transmission’s software for faster and crisper shifts and now offers a $2,000 optional AWD system. The new engine and tweaks drop the FWD T5′s sprint to 60 by 2/10ths and allows the T5 AWD to hit the mark in 5.93, only 0.26 behind the T6 AWD.

Compared to the competition, the 5 cylinder’s 250HP class leading with Audi still using ye olde 211HP 2.0L TFSI and Mercedes’ new 1.8L turbo spooling up 201HP. It even compares well with BMW’s 240HP 2.0L turbo. (However, the 328i’s lighter weight and 8-speed transmission allow it to hit 60 0.17 seconds faster.) Volvo’s 5-cylinder produces a distinctly “dustbusterish” kind of sound that is less entry-level than a four-cylinder engine but not as refined as BMW’s sixes. BMW’s 2.0L may be the pinnacle of four-cylinder refinement but even it is not as smooth as Volvo’s 5-pot. Audi? The 2.0L engine sounds rough around the edges and the A4 transmits far more engine noise into the cabin than the BMW or Volvo.

Drive

We should get one thing straight right up front: no matter how many wheels get the power, little is going to make up for having 3/5ths of your weight on the front axle. While many reviews complain about the fact that the Audi A4′s engine is completely in-front of the front axle, it still has a better (54/46) weight balance than the S60 with the engine completely above the front axle. That being said, the S60′s chassis is well composed on all road surfaces and is perhaps one of the best FWD platforms currently on offer in America. Checking that AWD option box however turns the S60 into a different animal on the road delivering [literally] 96% of the performance of the S60 T6 for $6,700 less. In addition, putting the S60 on an engine diet means the T5 AWD weighs 200lbs less than the T6 AWD.

When the road bends, the S60 T5 surprises with more handling prowess than its front heavy numbers would indicate. The primary reasons are the 235-width tires and Volvo’s ABS system based torque vectoring software. Rather than using a limited slip differential, the Volvo system uses the ABS system to brake the inside wheels in corners to send power to the outside wheel. While the system is not as effective as the more expensive mechanical active diffs, it allows more rear end rotation than you would expect. The result is a car with extremely confident road manners in all driving situations. While the A4 can be more fun as it has a RWD bias, the A4 was less predictable and less composed on the back-country roads I frequent.

With a starting price of $33,750, the S60 T5 AWD is the bargain choice in this segment undercutting the A4 Quattro by $850 and the 328xi by $4,750. Adjusting for feature content, the S60 comes out further ahead at around $1,300 less than the Audi and between $4,200 and $5,800 less than the BMW (depending on content). Despite being the segment’s value choice, I’d call the S60 T5 AWD my second choice in this segment behind the 328i and ahead of the A4 Quattro. The BMW’s larger dimensions, sportier aspirations and impressive list of “techogadgetry” justify the 14% price jump in my mind. Audi’s rough and underpowered engine combined with their complicated MMI infotainment system help push the king of AWD one notch down below the confidant smooth S60. If value factors into your decision-making, then the S60 is about two paddle shifters and a 5% better weight balance away from perfection. Until then the 328i reins supreme in this segment, but the T5 AWD is an excellent option if you’re cheap like me.

Volvo provided the vehicle, insurance and one tank of gas for this review

Specifications as tested

0-30: 2.2 Seconds

0-60: 5.93 Seconds

1/4 Mile: 14.5 Seconds @ 95 MPH

Average Fuel Economy: 26.5MPG over 895 miles

Volvo’s Chinese owners at Geely  encounter something in Europe that is unheard of in China: A drop in car sales.  Volvo has to cut production in Sweden by about 10 percent, and will let 200-300 contract workers go, Reuters says.

Volvo sales in Sweden dropped 10 percent January to July. Volvo car sales in Europe fell 9.2 percent in the first half of the year.

In reaction to the slowdown, Volvo already extended the annual summer holiday by four days at the at Torslanda plant.

Part of Saab’s presumptive “quirky” image is a serious lack of funds.  Saab “bled red like a stuck pig” as Car & Driver so delicately put it. Saab was sold when GM ran out of money. Victor Muller didn’t have the funds, and Saab’s future owner, Made-in-China Swede Jiang Dalong also seems to suffer the cash flow problem that is so familiar to all who touch Saab.  The presumptive buyer has received an ultimatum by the bankruptcy administrators: Pay in full until Friday, or the deal is off.

Sweden’s Dagens Industri writes that the administrators had a meeting with NEVS chairman Karl-Erling Trogen last week to check where the money might be. DI figures that what they heard in the meeting “must have upset the administrators.”

Trogen is the freshly minted chairman of the freshly minted National Electric Vehicle Sweden AB (NEVS), Jiang Dalong’s company that was minted to take over the remaining assets of Saab. The purchase price has never been made public, but DI figures it to be in the neighborhood for $274 million. Those need to be on the table by Friday. So far, NEVS has only made a down payment of approximately $23 million, and the administrator wants the full monte now.

According to DI’s sources, Jiang Dalong has “problems with prospective financiers in Sweden, because the Saab brand is not included in the deal.” Jiang previously said that the Saab brand (which definitely was not part of the package) is not crucial to the deal. He also claimed that NEVS is backed by his rich Hong Kong company and the rich Japanese venture capital company “Sun Investment LLC.”  TTAC had doubts as to the financial wherewithal of both, we also could not find a “Sun Investment LLC” in Japan.

It does not surprise us that Jiang does not have the $274 million. It also does not surprise us that he needs Chinese backers, and it furthermore does not surprise us that they are getting cold feet. It would furthermore not surprise us if Jiang is a straw man for Chinese interests – who lost interest.

Even just-auto, so far one of the few remaining supporters of the Saab cause, has been led astray:

“Mystery continues to surround widespread speculation in Stockholm that National Electric Vehicle Sweden (NEVS) is about to pull the plug on its proposed buy-out of bankrupt Saab. NEVS has played a coy game for the past couple of months, constantly insisting to just-auto the deal for Saab would be completed “during this summer,” but rumours are now swirling around Sweden the agreement could collapse as early as this week.”

Just-auto’s favorite for who might come and pick up the pieces for really cheap when the NEV deal falls apart: Youngman.

Victor Muller managed to sell out to China after all. Today it was announced (full press release here) that Muller’s Spyker and former Saab suitor Youngman will form two companies. Spyker calls them “joint ventures,” but they look more like companies owned mostly by Youngman, with Spyker holding a token share.

The first company is called Spyker P2P.  It will make the Spyker D8 luxury SUV (caught above by Carnewschina.) Spyker contributes the technology and the Spyker trademarks for a 25 percent share of Spyker P2P. Youngman will make a €25 million cash contribution (over time) for 75 percent of the shares. “P2P” does not stand for “pay to play” as you may assume, but for “Peking-to-Paris,” another moniker for the Spyker D8. The car is supposed to see the light in 2014, but with only 25 million in funding, it will need more money, a lot more.

The second and more interesting company is called Spyker Phoenix. According to the press release, “Youngman will contribute the rights to the Phoenix platform as developed by Saab Automobile AB in 2010/2011 to which Youngman acquired a license in 2011 as well as provide all required funding.”  Youngman will hold 80 percent, Spyker will hold 20. The company “shall develop and manufacture a new full range of premium car models based on the Phoenix platform which models will be positioned higher than the comparable Saab models were. Spyker Phoenix products may be manufactured in Europe and China as the case may be.”

In addition, Youngman will invest €10 million into Spyker itself.  €6.7 million buy 29.9 percent of  Spyker  (and hence another 6 percent of  the Phoenix company and another 7.5 percent of the P2P deal,) €3.3 million will come as a shareholder loan.

How did Youngman end up with Phoenix after their advances to buy the assets of bankrupt Saab were rebuffed?  Before Saab finally went bankrupt, the rights to the Phoenix platform were transferred to a Spyker-controlled special purpose vehicle, and used as collateral for a loan from Youngman that was never paid in full. When Saab went belly-up, I wrote

“I wouldn’t be surprised if a license for the PhoeniX platform won’t suddenly show up at Youngman, pledged as security for some of the money that had been paid. Then, GM will say that Phoenix IP is mostly theirs, and there will be a protracted and messy lawsuit.”

The first part of that prediction came true today. For the second part, we probably will have to wait a while, most likely until the first Phoenix cars are built, if they ever will.

Youngman will need government approval for the investment in a foreign company, and either foreign company will need government approval for joint venture production in China.

Bringing suit against GM for not letting Saab live another day could be turning into a popular sport. Lars Holmqvist, former head of Europe’s automotive supplier body CLEPA, and as such an insider when it comes to the latest Saab dirt, says that spurned Youngman of China is also thinking of suing GM.

Yesterday, Victor Muller made headlines and invigorated the dwindling and already slightly despondent fan-base by filing a $3 billion lawsuit against GM for tortuous interference. Muller might be joined by Rachel Pang of Youngman, Holmqvist told just-auto.:

“Youngman is also thinking about suing GM. I know that. They have not made up their minds and, of course, they would be encouraged by Victor Muller’s lawsuit. I have information. I know from people…they are looking into the possibility. It is obvious because they spent SEK550m…securing the rights to the new platform.”

550 million Swedish Crowns is $82 million, and knowing the Chinese they absolutely HATE to see money spent for nothing.

Muller is using someone else’s money for the lawsuit, the identity is kept a secret. Holmqvist seems to know the financier, but he is not talking. What Holmqvist says is that the moneyman is not embattled Russian banker Antonov:

“It is not Antonov. Muller would not be stupid enough to trace anything back to Antonov. The whole Antonov story is finished.”

Holmqvist suggest not to take the legal maneuvering lightly, and he reminds us the Muller is smart and a lawyer. Granted, Muller definitely is a better lawyer than carmaker, but in the words on one of my former Manhattan lawyers who’s name is kept undisclosed to prevent him from being disbarred:

“Bertel, half of the lawyers lose.”

“There is no substance behind the rumors about Stefan Jacoby leaving Volvo Car Corporation,” a spokesman for Volvo Cars told Reuters. He had to, because Sweden’s Dagens Industri named Jacoby as a candidate for the dangerous job as Opel CEO.

Since Opel CEO Karl-Friedrich Stracke was fired by Dan Akerson last month, the ailing company had two interim CEOs, first Steve Girsky, then Thomas Sedran. Opel is looking for someone to fill the post more permanently. However, the posting is said to be lacking job security, and has a hard time attracting five star talent. Knowing the former Volkswagen of American CEO Jacoby, he would not have taken the Opel job even during the better days of the company.

Naming Opel CEO candidates has become a sport of the auto press during the silly season. It looks like Sweden’s Dagens Industri simply wanted to bring fellow companies into play. Its second candidate is the former Saab and later GM executive Bo Andersson. He doesn’t need a new job, he is safely ensconced as CEO of Russia’s GAZ.

Pretty strange, but working for a Chinese (Li Shufu, Geely) or Russian (Oleg Deripaska/BVasic Element) oligarch is said to be safer than working for Dan Akerson and GM.

Nobody dares to say that it does not make sense at all. We say it.

• There is no market for EVs in China, at least not at the moment. Despite grand plans, EVs in China have not morphed beyond experimental projects.
• There is absolutely no market for imported EVs in China. Every carmaker knows that. Only noobs don’t. In China, new energy cars can only benefit from generous government policies if the car is built in China and sold under a Chinese brand, Nissan’s CEO Carlos Ghosn said at this year’s Beijing Auto Show. Ghosn should know what he is talking about. His company makes the all-electric Leaf and will make it in China under the Venucia brand to comply with the Chinese regulations. Without the subsidies, even a made-in-China EV would be way too expensive.
• Instead of benefiting from subsidies, an imported EV would be priced way out of the non-existing market. Customs duty, taxes and import costs can double the price of a car once it goes on sale in China.
• “Saab” has absolutely no brand cachet in China. Most likely, this won’t be a factor. The sale of the assets does not include the brand name, it would have to be licensed from a very reluctant SAAB AB.
• Lastly, an EV must be purpose-built to make halfway sense. The battery pack of the Nissan Leaf for instance weighs 660 lbs. The rest of the vehicle must be built considerably lighter yet stronger.

“We’re struggling to see how this enterprise is going to work,” Ian Fletcher, a senior analyst in London for IHS Global Insight, said to the New York Times. “Do they have some kind of magic bullet?”

It’s a magic bullet that would be aimed at the foot.

The only way this sale make sense is when the tools, production equipment, and most of all the production know-how that sits in the Trollhättan plant gets shipped to China.

What is behind those missing links? Who is the nice man who goes thumbs up next to China Communist Party Polit Bureau member Li Keqiang? And why has he allegedly just bought Saab?

Trollhättan’s newspaper TTELA reported yesterday (translation via The :Local) that “the sale of assets of bankrupt Swedish automaker Saab is complete.” The source was Trollhättan’s city manager Annika Wennerblom who told the Trollhättan newspaper that the deal is done. Hope springs eternal and makes a bad editor. Even worse, an unchecked story raced around the globe, leaving a string of 404s in its wake as editors hastily yanked the erroneous story.

Hours later, Trollhättan spokesman Peter Asp, called the news “Wennerblom’s own speculation that went awry.” He stated that “neither she, nor our local councilor Paul Akerlund, nor I have been informed that the administrators have completed their work.”

Now, NEVS spokesman Mikael Ostlund only wants to “confirm that NEVS is interested in buying Saab Automobile’s assets.” This is old hat. The allegedly Swedish company National Electric Vehicle Sweden (NEVS) had been rumored for a while as a bidder for the Saab assets that are on the block in a bankruptcy sale. What is more interesting is who is behind that freshly minted National Electric Vehicle Sweden.

It is two shadowy companies.

One company, often played into the foreground, is a  low profile Japanese investment company named “Sun Investment LLC.”

The other company is National Modern Energy Holdings. According to media reports, this company is registered in the British Virgin Islands, but is in turn owned by a Hong Kong based company named China Dragon Base Holdings.

“And behind it all stands the Swede Johan Kai Jiang,” writes TTELA, happily translated by our friends and fans at Saabsunited.

Here he is. Alleged Swede Kai Johan Jiang became famous for turning garbage into power. Literally.

Kai Johan Jiang was born in 1965 in China’s Shandong province. As Jiang Dalong, definitely not as a Kai Johan. Later, Jiang became a minor celebrity in China. His Beijing-based Dragon Power Group received an RMB 28 billion ($4.4 billion) loan from the Chinese state-owned enterprise China Construction Bank, which provided the capital for the National Bio Energy Company, a subsidiary of Dragon Power, to construct biomass plants across the country.

Later, Dragon Power was renamed to State Power Group, Ltd., and Kai Johan Jiang is the Chairman of that Chinese power company. State Power Group sounds confusingly similar to China’s energy moloch State Grid, and Jiang likes it that way. Writes China Daily:

“Chinese energy giant State Grid Corp, through its subsidiary National Bio Energy and China’s Dragon Power Group Ltd have invested in a Swedish bio-energy joint venture called NBE Sweden. “Our investment in cellulose-based ethanol production in Sweden is aimed at developing technology for biomass power generation projects in China,” said Kai Johan Jiang, chairman of Dragon Power Group and National Bio Energy Group Ltd China.”

You follow?

In this 2004 picture, Kai Johan Jiang, (right) explains the garbage to power process to Wu Bangguo, Chairman of the Standing Committee of China’s National People’s Congress.

A year later, Kai Johan Jiang is seen with a Chinese government delegation led by Liu Qi, member of the CCCPC Polit Bureau, Secretary of the Party Committee of Beijing Municipality, touring a biomass power plant in Denmark.

In this 2010 picture, “top leaders Liu Qi, Liu Yandong and Guo Jinlong, etc. listen to Chairman Kai Johan Jiang’s report at the 13th China Beijing International High-Tech Exposition.“ We already met Liu Qi. Liu Yandong is a member of the Communist Party’s Politburo and State Councilor, Guo Jinlong is Beijing Deputy Party Secretary and mayor of Beijing.

The fact that Swede Kai Johan Jiang wasn’t always a Swede becomes obvious in a few seconds. The rest can be found through a few hours of googling and some phone calls. The true scandal is how many dewy-eyed Saab blogs keep polishing the Swedish charade. They stress that Kai Johan Jiang was “a senior adviser for Volvo,” they look the other way when the newly minted Swede appears on the side of Politbureau members. They write that the senior adviser worked for Volvo from “1993 through 2000.” They forget that the senior adviser’s career started at a youthful age of 28. They also forget that Kai Johan Jiang is China’s conduit into western energy infrastructure. They also overlook that the former Volvo adviser  Kai Johan Jiang is also “an economic adviser to the Shandong provincial government on policy matters.” That job however, is performed under his Chinese name Jiang Dalong.

Here, Kai Johan gives an interview to a Swedish TV station.

The keep-Saab-alive blogs also play up that Japanese venture capital company, possibly knowing that it is hard to get information on a Japanese company. Unless you are in Japan.

Even then, this one is a hard nut to crack. Simply because “Sun Investment LLC” does not exist, at least not as a Japanese corporation. Not surprisingly, because there is no LLC in Japan. There is, however, a company called Ippan Shadanhojin Taiyo Keizai No Kai, a.k.a. “Sun-based Economy Association.” It was founded last year in Tokyo with a Sanefumi Sammy Shoji as a partner. Shoji, who twitters as @Samdog45, is not a deep-pocketed financier. Shoji-san graduated in 2003 from the Tokyo University as a Master of Planetary Science, then he was hired out of school by Goldman Sachs. He left in 2009 in the wake of the Lehman shock that severely thinned the herd of bankers and patrons of Roppongi bars.  Shoji dabbled for two years in the “boutique clean technology/investment firm” by the name of Japan Core Partners, before helping to launch the “clean technology-focused venture capital firm” that is erroneously called Sun Investment LLC.

Art this point, a little excursion into the byzantine world of Chinese capitalism is in order. Companies in Hong Kong, the Virgin Islands and oddly enough Japan are favorite vehicles for investments in China. The bulk of “foreign” companies investing in China are companies registered in offshore tax havens, financed with recycled money from China. These companies also are a favorite stepping stone for Chinese companies that want to invest elsewhere without immediately rubbing it in that they are Chinese.

Because Caribbean-registered, and even Hong Kong based companies have the onus of fast money, smarter Chinese ventures like to use Japanese companies as alleged parents. Often, after a little scratching on the Japanese lacquer, the Chinese veneer comes through.

Ippan Shadanhojin Taiyo Keizai No Kai is the perfect vehicle for this. The office of the company is on the 6th floor of a fancy Tokyo building near the Japanese Emperor’s residence. One wrong step, and you land in the Emperor’s moat. More than 100 tenants are in this building. Taiyo Keizai No Kai  resides in the same office as Japan Core Partners. They share phone and fax. The address is also used as the secretariat of the Biomass Expo 2012. The same company occasionally organizes get-togethers with Chinese business interests.

The “Taiyo Keizai No Kai” can loosely be translated as “Sun Ecology Group”. An “Ippan Shadanhojin” is an intermediate company, halfway between profit and non-profit. (On its Facebook page, the sunny company bills itself as a non-profit, a perfect partner for Saab.) Typically, an “Ippan Shadanhojin” represents Cayman-based Special Purpose Vehicles in Japan. This is not a deep-pocketed investment company. It is a stand-in for someone else. Taiyo Keizai No Kai has as much history and experience as National Electric Vehicle Sweden, i.e. the history and experience of a toddler. Draw your own conclusions.

Back to our main man, the Swede from China. In an interview, Kai Johan Jiang remembered his days in poverty in rural Shandong province, and said that he does “not care that much for personal wealth.”

He is the perfect man to invest into Saab. As history shows, Saab is the ideal vehicle to destroy wealth.

Victor Muller could not save Saab.

Vladimir Antonov could not save Saab

Pang Qinghua could not save Saab.

Rachel Pang could not save Saab.

Now, Barack Obama is supposed to save Saab.

At least that’s how the Swedish metalworker union IF Metall sees it.
The union sent written a letter to president Barack Obama, urging him to use his good offices “to force former Saab owner General Motors to release the technology licenses for any potential buyer for Saab.” At least this is how The Local sees it.

The letter says:

“Our hope is that you will feel that Saab Automobile is worth being saved. We, more than 4,500 car workers in Sweden, look forward to your answer.”

Saab is in bankruptcy proceedings, and the receivers are evaluating bids. Saab is worth very little without the technology licenses held by GM, and, for that matter, without the brand held by defense contractor SAAB AB.

GM has been on record many times that it does not intend to license its technologies to any buyer of Saab in any shape or form.

Before and after Saab had gone bankrupt, pipe-dreamers thought that the company can be revived with just a few million dollars. The number commonly used was $50 to $70 million. We maintained that it would cost a few billion dollars to get the company going again.

As it turns out, we were way too optimistic.

Saab’s unpaid bills are between SEK12-13 billion (USD1.8-2 billion) says the Wall-Street Journal. The number is based on information from the court-appointed receivers. A full accounting will be published on April 10.

The books must have been in a royal mess if it had taken until now to establish total debt with a ten percent variance.

It is no surprise that no buyer was found for Saab as a whole. The buyer would have shouldered the $2 billion in debt and would have needed another 2 billion at least to have a chance at viability.

Also on April 10 is the final deadline for bids for Saab assets. According to the Journal, “a handful of parties are interested in buying Saab Automobile’s facilities in Trollhättan, Sweden. All of them are interested in producing cars at the plant.”

“We filed a Chapter 11 just in case a white knight comes out of nowhere and buys Saab`s parent.”

Dealers are being owed money for unpaid warranty, incentive reimbursement and sundry others. Per dealer, the sums are said to range from $79.11 to $167,977.98.

The Church of St. Victor has a different version. Under the headline “Saab US Dealers Ask For Chapter 11 Protection,” they write:

“Take this as a good sign, today 41 US dealers asked a judge for Chapter 11 protection which would allow them greater involvement in a liquidation and to preserve whatever structure they can in case a bid for the entire company is accepted.”

Fellow blogsters and spinmeisters: If you ask a judge for Chapter 11 protection, then it’s YOU who is hounded by creditors and collection agencies, and it’s you who wants protection. Which would be more than plausible with a lot full of cars nobody wants.

PS: After some of the flock complain, the church changes the headline “Saab US Dealers Ask For Chapter 11 Protection” to “Saab US Dealers Ask For SCNA Chapter 11 Protection.” Not a big improvement as long as the copy stays the same.

Tom Carpenter, co-owner of Auto Center Southeast in Groveport, OH, had three Saturn dealerships. In 2009, GM euthanized Saturn, and Carpenter had to look for new cars to sell. Now, he is looking again.

Last August, Carpenter signed up for a Saab franchise. Carpenter “was aware of the manufacturer’s financial concerns but thought it was on solid ground,” says the Columbus Dispatch. Saab’s production lines had not been moving since April.

That enormous leap of faith was unrewarded. In December, Saab filed for bankruptcy. Carpenter was “not ready to say the brand is dead,” wrote the paper last December. Carpenter joined the ranks of the Saab faithful who hoped for a white knight.

On January 23, Saab Cars North America was liquidated. Saab of Columbus  has 18 new Saabs on the lot, and 2 used ones. In a final closeout sale, no reasonable offer will be refused.

Scott Carpenter is looking for new cars to sell. For the second time in two years.

The story on Saab pulling the plug on the diagnostic computer, and hence on repairs that need that access, ruffled a lot of feathers.  The Church of St. Victor is so angry at the apostate article that it broke its self-imposed code of silence and mentions TTAC by name. Delusional as they are, they believe that their links send us traffic. Selfless as we are, we probably have done more to Saabsunited’s fame than any other site. Ingrates as they are, they call our story

“the most stupid article I have ever seen! This website has no clue how things work and this is why we never refer to them… I’m making a one time side-step from that policy!”

In their rage, they overlooked a small detail …

The source of this story is no other than Martin Jaenicke. Herr Jaenicke happens to be the chief of Saab’s dealer council in Germany, he speaks for all remaining 80 Saab dealers in Germany. Yesterday, Jaenicke  gave an interview to Germany’s Kfz-Betrieb. If you have an auto workshop in Germany, you have a subscription to Kfz-Betrieb. Mr Jaenicke told the magazine’s news chief Jens Rehberg, that

“many customers sell their Saab now, because they worry about the parts supply. Saab workshops are faced with many imponderabilities that need to be clarified as soon as possible.Currently, workshops can only perform very limited repairs, because online access necessary for work on on-board computers has been switched off. At the successor company in Sweden, which is taking care of these processes, the necessary systems need yet to be installed.”

We may not have a clue how things work at Saab, but we sure hope that the head of the dealer council does. In talking to some contacts, we pick up ruminations that the switched-off computer may have something to do with pressuring dealers into signing a new contract. Investigating …

If you believe certain accounts, heroic Saab employees selflessly bought their own toilet paper in a last ditch operation to defend crumbling Saab.

Jaenicke has a more sober perspective:

“The remaining contacts at Saab, when confronted by me with these and other matters, appear to be unable to cope at the moment.”

Even more damning, Jaenicke likes the receivers – Swedish lawyers, not selfless Saab employees – better than the old hands at Saab:

“With the receivers and Saab Parts AB, we finally found contacts who at least think they are competent.”

As for the bankruptcy, the dealer chief thinks it should have been declared much earlier:

“A year ago it was already evident that there is not enough money, even if the lines could be started again.”

Meanwhile over at the faithful, all is peachy. Says the latest missive to the flock:

“There are also some other really big spare-parts news that I would LOVE to reveal to you right now, but I’m not allowed to so keep your shirt on, keep driving those great Saab’s and don’t worry, your life with a Saab will not be a problem! =).”

“There have been no formal bids,” receiver Anne-Marie Pouteaux told Reuters. Her colleague Hans Bergvist added that they “ have had discussions with a number of interested parties. Some of them are interested in the factory as a whole and some of them are interested in parts of it.”  But no, no bid.

It would be folly to place a bid, because even the receivers don’t know yet what that bid will buy. In a press conference on Saturday, receiver Hans Bergvist said:

“Everything that was possible to pawn in Saab has been pawned. The work to identify Saab’s assets is not yet complete, but we have come a long way.”

Anybody who had lent Saab money recently, did so with assets pledged. In July, just as a for instance, Saab sold 50.1 percent of its real estate holdings to a consortium led by Hemfosa Fastigheter AB, for about $40m. They leased it right back, with the proviso that the rest is security for the rent. Should Saab default on the rent, the contract allegedly said, then the consortium will say tack så mycket and  owns the whole thing.

Even in a bunker in Sweden, from which the last faithful had been sending blog posts in support of the zombie brand, defeatism makes the rounds.

“The headline everywhere is “Saab is dead”, which actually, right now, is true.”

This amazing revelation comes from Saabsunited, which continues:

“The fact that Saab has not even had money to buy toilet-paper since march is a fact that not a lot of people knew about. We’ve heard horror story after horror story from Saab employees and suppliers describing how a company has to act when it is completely out of money and saving up on absolutely everything! But despite having to clean the offices, toilets, kitchens and even buy supplies themselves for their own money the employees stayed at their post! They did not leave which is the biggest evidence of how great Saab actually was.”

They said it: Was.

And the reaction from the peanut gallery?

“+1!”

“+2!”

“+3!”

“Griffin up!”

Want  a piece of “quirky” history?  While the good folks at the Church of the One True Saab still have dreams of white knights, Saab’s heritage is being auctioned off. This caught the attention of Bringatrailer.com (“The best vintage and classic cars for sale online.”) In a lengthy piece, the organ for trailer trash collector’s online hub salivates over “the entire collection of 100+ cars belonging to the Saab Heritage Museum in Trollhaettan, Sweden” to the liquidator.

The cars  include everything from the 1946 Ur-Saab to recent show prototypes. Complete listing here, in Swedish. A rare collector’s item in itself!123 pages, 2 pictures per car. Saab history, written by the executioner. Download your piece of Saab history for  FREE!

As for the auction, you don’t even need to bring a trailer to drag away your loot. Also on auction are the workhorses of the museum which include an enclosed trailer, and a Saab 9000 back-halved flat-bed hauler.

The cars are auctioned off by the Swedish law firm Delphi. Written bids on the collection, as a whole, or, come on, cheapskate, individually, are requested via mail or fax by this Friday, January 20th. Instructions here.

Place your bids, or do we have to send Steve Lang over there? Come on, didn’t you always wanted to own the concept cars, just as they show them at the car show? Now you can. Their loss, your gain.

There was ample hand-wringing when Volvo announced the death of their iconic station wagon in North America. While enthusiasts mourned the death of a cult classic, Volvo also announced a plug-in hybrid version of their V60 wagon, powered by a diesel engine and a hybrid drivetrain. Naturally, this vehicle was not destined for sale in North America.

The non-available V60 plug-in constituted the ultimate slap in the face for the Volvo faithful. Here was the newest generation of Volvo wagon (as opposed to the warmed over XC70 offered recently) with an environmental bent and the Euro-cachet of a diesel engine – but where was it? As Jamie Kitman of Automobile magazine rightfully pointed out, their core buyer is “green” but refusing to import such a vehicle may not be “lunacy”, because the Swedes have something more suited for American tastes – the same hybrid goodness, packaged as a gasoline-powered crossover.

Rather than the V60 diesel-hybrid, North Americans are being treated to a plug-in hybrid based on the XC60. Set to be unveiled at the North American International Auto Show next week, the XC60 plug-in will use a 280 horsepower 4-cylinder gasoline engine and a 70 horsepower electric motor for a total output of 350 horsepower. The gasoline engine will drive the front wheels, while the electric motor will power the rear wheels. Volvo claims that the vehicle can be driven in electric mode for up to 35 miles and return up to 50 mpg. Stefan Jacoby, Volvo’s CEO, noted that the gasoline powered version will be an important car for China and Russia as well as the United States, as this likely has as much to do with the crossover body style as it does the gasoline engine.

On a personal note, my folks bought an XC60 T6 this summer, and I have spent ample time in it. While perpetually ignored in the marketplace, the XC60 is a car I’m fond of, with a powerful engine, a well-appointed cabin and good driving dynamics. At the time of purchase, I urged my parents to look at the XC70 T6, but it cost a few thousand dollars more and offered little appreciable difference to them. If a couple of upper-middle class car enthusiasts saw little value in opting for a wagon over a crossover, then what chance would a station wagon have with more conventional buyers, who are likely to be even more image-conscious and resistant to the idea of a wagon? On the other hand, my parents have a 5.4 mile commute through a downtown core to their office, and something like this would be right up their alley. Hopefully pricing won’t be so exorbitant that it cancels out any economic benefit for buying the XC60 plug-in.

Yesterday, the alleged enthusiast blog did play its usual “if we would tell you, they would shoot us” about a possible suitor from India:

“We are not allowed to reveal the identity of the company yet, but we are allowed to reveal some facts about it. They are of course based in India but acts on a world-wide basis with much more than 100’000 employees worldwide. They are a multi-billion dollar company, that work on multiple fields such as energy, logistics, real estate and of course within the aerospace and automotive industry.”

Bloomberg does not bother playing twenty questions and reports:

 “Mahindra & Mahindra Ltd., India’s biggest sport-utility vehicle manufacturer, is interested in buying at least parts of bankrupt Swedish carmaker Saab Automobile, two people familiar with the situation said.”

 Not more is known about the matter. According to Swedish media, Mahindra hasn’t even had an audience with the administrators yet.

Thinking of cashing in on Saab’s misfortunes? Contemplating your own bankruptcy deal, where you can buy a brand new (well, nicely aged on the dealer lot) Saab for pennies on the dollar? Think again. Edmunds.com Senior Consumer Advice Editor Philip Reed says you will be in for a nasty surprise:

“Consumers shouldn’t expect a fire sale on unsold Saabs just yet. While incentives are no longer being offered for now, our research indicates pricing remains unchanged at Saab dealerships. Dealers are taking a wait-and-see approach since this situation is changing rapidly. But Edmunds.com analysts estimate that the True Market Value price of new vehicles will be discounted by an average of 28 percent from MSRP — and as high as 33 percent in some cases.”

That may happen, down the road. Currently, prices at some dealers are going up. Yes, you heard right. Up. Edmunds found a Saab dealership in Los Angeles where new Saabs are sold in “as-is” condition as if they were used cars, but they are priced at full MSRP. The reasoning is that some models had $12,000 in incentives the previous day, but these price breaks were no longer available because of the bankruptcy.

One reader told us that he went to a Saab dealer, made a lowball offer, only to hear the story that because Saab is in bankruptcy, the company will buy back all cars on dealer’s lots. Sure. And low flying pigs were sighted of Trollhättan.

If you are worried that you may have to live without daily episodes of the Saab Soap, now that the company is bankrupt, worry no more. Or in the words of Saabsunited: “never ever give up!” The show will go on.

Today, Automotive news China [sub] reports:

“Zhejiang Youngman Lotus Automobile Co. says it has purchased Saab Automobile’s Phoenix architecture despite its failure to acquire the automaker itself. Youngman already has set up a company in Sweden to develop new models based on the architecture, said Rachel Pang, Youngman’s spokeswoman and daughter of Youngman President Pang Qingnian.”

The trouble is, nobody in Sweden or elsewhere has heard about it. As far as Sveriges Radio knows, the discussions between Youngman and the bankruptcy administrators  are ongoing. No sale of nothing has been announced. Victor Muller’s and Vladimir Anntonov’s propaganda organ The independent enthusiast site Saabsunited implores the faithful:

“Don’t believe any report that shows up. The media is desperately looking for things to write about and comes up with, to say the least, strange news. Like with the rumours about Phoenix being sold to Youngman seperately we will try to figure out the truth behind it and keep you updated ad good as possible.”

To me, the story comes as expected. A few days ago, I predicted:

“I wouldn’t be surprised if a license for the PhoeniX platform won’t suddenly show up at Youngman, pledged as security for some of the money that had been paid. Then, GM will say that Phoenix IP is mostly theirs, and there will be a protracted and messy lawsuit.”

Whoever thinks the Chinese paid a few million out of the goodness of their hearts is gravely mistaken. The way we (and other Swedish media) understand the deal is that there was a loan, with the Phoenix platform pledged as collateral. Youngman most likely takes the position that the loan was defaulted upon, and the collateral is theirs. This can be a long, expensive, and messy lawsuit until this is sorted out, and in a bankruptcy, who has the nerves and money for that?

After delegations of Pangda and Youngman had travelled to Trollhättan to inspect the factory, one returning Chinese traveler mentioned to a contact of mine that the factory is great, but it’s in the wrong place. In Sweden, workers would earn way too much and go home early, contrary to the Chinese worker, who would have a much higher work ethic for less money, the traveler opined. If all goes well (for the Chinese,) the Trollhättan factory will come to China. Usually well informed Sveriges Radio reports that Youngman is interested in buying the Saab assets in a bankruptcy sale.

Updated with Victor Muller’s press conference.

This interest has been confirmed by Hans Bergqvist, one of the bankruptcy administrators assigned to the case. What Youngman would be buying is a factory, free of obligations, but also free of any technology licenses and without the Saab name. According to Sveriges Radio, Youngman thinks that the current 9-3 does not need a nod from GM.

A Turkish company also appears to be interested. The Turkish embassy in Stockholm has established contact.

UPDATE: Victor Muller’s press conference can be seen below (courtesy: Saabs United)

Sweden’s Aftonbladet reports that Victor Muller filed for bankruptcy of Saab this morning at the court in Vänersborg.

Dagens Industri writes that with Saab having declared bankruptcy itself, the matter will be resolved quickly. A bankruptcy order is expected during the day.

The actual verdict had been handed down by GM over the weekend. GM refused to agree to any of the deals presented.

Today, the court in Vänersborg was scheduled to decide whether to lift creditors protection, which would have opened the doors to much messier bankruptcy proceedings. Over the weekend, Muller was in closed session with Rachel Pang of Youngman to hammer out yat another last minute deal. At one point, Rachel Pang became gravely ill, and unable to attend the court proceedings. After a little while and more talk, she regained her health. Now, any court appearances are no longer necessary.

Youngman had no other choice than to realize that without the cooperation of GM, the matter was way beyond salvage. This morning, Victor Muller reached into his hat, found it devoid of bunny-rabbits, and did what he should have done much earlier.

Both dealer group Pang Da and Youngman have sunk considerable amounts of money into keeping zombie Saab at least clinically alive. Wasting your own money is seen as a grave sin in China, and the disastrous end of the Saab adventure most likely will negatively influence foreign asset purchases by Chinese entities for a while.

Muller, his out-on-bail friend Antonov, and any Chinese suitors should have realized much earlier that GM had no interest in Saab’s survival if it would be at the expense of GM’s sizable activities in China. GM agreed to sell Saab to Muller because that spared GM the messy and expensive business to shut down Saab themselves.

As expected, Saabinistas vent their anger on GM’s Facebook page. Many vow to never buy a GM product. A hollow threat: Most of them are used-car drivers anyway. Case in point: Saab’s über-flagwaver Steven Wade. Before he sold Saabsunited to take on a (shortlived) PR job at Saab, he drove a 1999 Saab 9-3, canary-yellow. Wade is already bac k in Australia, looking for a job.