By on June 16, 2009
This morning the AP has the news you already knew about, but a few more details have emerged. First up, the now obligatory government backing, this time in the form of a $600 million loan from the European Investment Bank, guaranteed of course by the Swedish government. That explains why minuscule Koenigsegg picked up Saab for free. It’s all about being Swedish. “With a full-time staff of 45, Koenigsegg makes around a dozen cars a year, customized for every buyer.” Wow, talk about a micro-niche. But fear not, Saab has an innovative strategy for competing going forward. More about that in a moment.

“Matts Carlsson, an analyst of Goteborg Management Institute, called the deal ‘exciting, interesting and challenging,’ adding that although no price sum has been made official, the Trollhättan, Sweden-based unit is likely to have been more or less a giveaway. ‘[Money] is not really what it’s about right now, it’s about the possibility to back up this deal,’ he said.” Check, it isn’t about the investor’s willingness to make the required investment, it is about the investor’s ability to get government funding. “‘Saab needs to be left alone to proceed with its strategy,’ he said, noting that any tampering with its five-year plan to produce premium cars that are not aimed at competing with luxury brands such as BMW or Lexus ‘could destroy it.'” Now can someone explain to me how you make a premium car without competing with BMW or Lexus?

Get the latest TTAC e-Newsletter!

34 Comments on “Koenigsegg and Saab Tie the Knot...”


  • avatar
    Paul Niedermeyer

    Just like Saab has been doing for the past number of years – unsuccessfully.

  • avatar
    Jacob

    So, now that Saab is free from GM’s yoke, are we going to see a new 9-5 any time soon?

  • avatar
    Rod Panhard

    Smells like the Chrysler –> Fiat deal, doesn’t it? A “buyer” with shallow pockets gets another company for free, mostly by asking, with someone else’s government’s taxpayers toting the note.

    I bet they never taught you that one in b-school!

  • avatar
    Dragophire

    Now can someone explain to me how you make a premium car without competing with BMW or Lexus?

    Easy have GM own you and have you to compete against Olds and Buick for product and money along with shared parts with Chevy. Thats how you do it.

  • avatar
    kovachian

    Now can someone explain to me how you make a premium car without competing with BMW or Lexus?

    By escaping the clusterf**k assimilation of the GM borg and going back to the quirkyness that made Saab, a Saab.

  • avatar
    Spike_in_Irvine

    Saab does not have to compete head to head with BMW etc on peformance, features etc. It just competes for the same chunk of a buyers money. So does a swimming pool or holiday. Pre-GM it did this quite well by being different. (Nice ride, upright seating, FWD turbo and that infamous ‘key on the floor’) It was a different kind of fun.

  • avatar
    postman

    Smells like the Chrysler –> Fiat deal, doesn’t it? A “buyer” with shallow pockets gets another company for free, mostly by asking, with someone else’s government’s taxpayers toting the note.

    I bet they never taught you that one in b-school!

    New version of the oldest game in business – the OPM plan (Other People’s Money)

  • avatar
    Pch101

    Now can someone explain to me how you make a premium car without competing with BMW or Lexus?

    It’s suicidal for them to try. That’s what GM wanted to do with Saab, and it failed.

    If it’s going to work, they’ll need to outsource large fixed cost items (most of the R&D) and try to focus on selling just a couple of models, using as much parts sharing as possible without turning it into a badge engineering exercise. They need to pick a niche and do well with it, so that it is an alternative to BMW, not a BMW knockoff. Anybody who wants a BMW is just going to buy the real thing.

  • avatar
    Bunter1

    Dear President Goodwrench,

    I am willing to help you “re-habilatate” the Dodge Viper division.

    Turn it over to myself, along with a mere .25 B-bucks (really a tiny sum!), I will work hard at turning it into a viable buisness creating new jobs in the good ‘ol USA.

    I am an experienced engineer, living in MI, and have many innovative ideas for keeping this product at the top of the performance spectrum while greatly increasing it’s efficiency (GREEN!).

    This is a far hotter deal than the Euro-boys got on SAAB and I am not encumbered with a current line of super cars taking my focus off of this product.
    And unlike GM or Chrysler’s primary buisness lines there might even be a chance of this succeeding. Such a deal.

    RF can get you my email.

    Respectfully yours,

    Bunter

  • avatar
    snabster

    the new 9-5 will be very GM (opel). Should be coming inside a year. Not much of a market for larger cars right now.

    People who are focused on branding should like this merger. Putting a supercar display in key showrooms will bring in traffic. People who are concerned with money should be ok with this — it is the EU wasting their euros. People who are concerned about cars should be very worried: how will a new KS-SAAB develop engines, platforms, tooling, etc and be able to compete.

    I secretly wanted SAAB to be sold to FIAT; they have done an amazing job with their sub-brands and there was already a lot of sharing. FIAT-OPEL-SAAB, however, would duplicate the same problems as before where SAAB is stuck with last generation Opel platforms.

  • avatar
    able

    Saab’s situation is similar to Jaguar’s; while they don’t have perhaps as good a brand name, the solution is the same: build a few really really good cars, and things work out.

    The new 9-5 might just do that. If they sell it at a competitive price, it will do a lot for the company. There is room in the market for what Saab used to be: fun to drive, unique, and utilitarian luxury.

  • avatar
    TEXN3

    Get out of the “Premium” segment and make a niche midsize car, keep it simple and the losses may not be as great. Heck, Saabs and Volvos used to be about the same price as an Oldsmobile Cutlass. Get into the $25-30k segment, offer something interesting and keep it limited. If it doesn’t sell, close up shop.

  • avatar
    wsn

    Bunter, do you need a business partner in acquiring Viper? I mean, I can even put down $30k of my own money for the new venture. What a show of faith. In the worst it fails, I am OK with being repaid a Viper.

  • avatar
    ARacer

    The way I see it they could build an image/cache that is unique like pre-GM Saab or pre-Toyota Subaru. A -back to their roots- FWD sedan with that cool Swedish image and a few differentiating features with a price around 30k would be great. This new (old) Saab could steal a bit of the family sedan market from all of the players. I think.

  • avatar
    Stu Sidoti

    Something funny is going on here with all these deals….FIAT-Chrysler, Hummer, Saab, and Saturn (even Land-Rover/Jaguar and Tata) all have one very odd common theme that makes me scratch my head and wonder ‘ Huh?!?! ‘…and that is with the exception of Bo Andersson and handful of Chrysler execs over a year ago, we are not hearing of any management, staff or executives leaving the companies being sold to either return to base camp or strike a deal with another more established automaker.
    For example on the Hummer deal, I would have bet the mortgage that a whole bunch of GM lifers who have spent their whole working lives in GM Truck would have done anything to get back to the mothership…It all seems odd to me, like something funny is going on here. I’m not sayin‘…I’m just sayin’…Hmmm.

  • avatar
    BuckD

    Keepin’ it real Swede. I just hope they continue to have a dismal resale value so I can continue to afford buying used Saabs.

  • avatar
    Robert Schwartz

    Lock the engineers up in a room with the original Saab 92, and 93 and some rally winning 96s, and don’t let them out until they come up with something that makes them happy.

  • avatar
    dcdriver

    I’ve always thought that Saab has great potential, not as a competitior to BMW, but as an alternative. Another thing–listen, I love BMWs, but for a car company that is supposed to be exclusive, I sure as hell see a ton of BMW’s everywhere, driven by teenagers, secretaries making 35k a year, teachers, other wannabe’s in addition to their actual target market of upper-class professionals.

    Has BMW become to mass-market, too-mainstream, too common?

    For people who want a little luxury and a fun to drive car that isn’t American, japanese or german and one you don’t see every 5 seconds– I think Saab hits that spot.

  • avatar
    Paul W

    It seems like the K-egg people have managed to borrow enough money, and get access to GM technology, to keep Saab afloat for at least 5 more years. Sadly (for the tax payers).

  • avatar
    John Horner

    Saab and Volvo have both erred, in my opinion, by chasing luxury/near-luxury fashion oriented buyers.

    I like Robert Schwartz’s plan, but I doubt we will see it happen.

  • avatar
    bill h.

    John Horner:

    I think that was originally the strategy that Bob Sinclair (RIP, his memorial service is this weekend) convinced the corporate folks in Sweden to take in the 80s. It worked then for that era, perhaps a different approach works better now, since BMW has gone upscaley.

    Fun to drive (in a Saab way) has got to be the first priority, while keeping the non-hyped safety and utility they have been known for.

    As for the notion that BMWs are a commodity car, wasn’t it Dan Neil who referred to the 3 Series as the Bavarian Roach?

  • avatar
    agenthex

    Has BMW become to mass-market, too-mainstream, too common?

    For people who want a little luxury and a fun to drive car that isn’t American, japanese or german and one you don’t see every 5 seconds– I think Saab hits that spot.

    The potential is certainly there. The car business is mature enough that niches served well can be profitable. It come down now to their execution.

  • avatar
    Tom-W

    >>Saab’s situation is similar to Jaguar’s; while they don’t have perhaps as good a brand name, the solution is the same: build a few really really good cars, and things work out. The new 9-5 might just do that. If they sell it at a competitive price, it will do a lot for the company. There is room in the market for what Saab used to be: fun to drive, unique, and utilitarian luxury.

    Sorry, not anytime soon. As another poster mentioned:

    >the new 9-5 will be very GM (opel). Should be coming inside a year

    Which means that the next 9-5 will be like the current 9-3: a “I coulda been a contendah” car but for GM’s notorious bean-counting and corner-cutting, resulting in low quality.

  • avatar

    Keep the fun, the quirky and the utility.

    They’re right. Saab does not have the firepower to compete against BMW or Lexus.

    *But they Do have the style and ~oddness to be an interesting Alternative, albeit a tad orthogonal.

    As a few smarty-pantses here have said before, if your new Saab customers are people cross-shopping Subarus, You’ve Won. -That is their segment.

    If Saab can keep their prices at around the Subaru/VW Passat area and be an alternative for someone who might want a Legacy, or a stripper A4, they have a chance.

    ++ I see so many freaking leased BMWs and Audis around here, it’s just irritating. I would LOVE to see a few more Saabs and have them be a viable choice.

  • avatar
    Morea

    I seem to remember that when GM bought SAAB (circa 1989) the claim was that an independent auto manufacturer shifting fewer than ~150,000 units per year couldn’t make it. The logic was that GM could push more than 150,000 SAABs per year and thus keep the brand alive. Well, they couldn’t.

    So I ask, How many (main stream) cars does an independent car maker have to sell to stay in the black?

    And don’t reply with examples of boutique manufacturers like Koenigsegg or Panoz, I mean typical cars for typical middle-class consumers.

  • avatar
    Bunter1

    wsn-Thanks for the offer.
    I think we better stick with the “buisness” model that governments seem to think is “viable”.

    What it looks like to me is you go to them and say “Please give me the company for free plus a big pile of money to get it running again so I can keep jobs going in {insert country name of gov’t being applied to here}.”

    Clearly, having a workable buisness plan laid out ahead of time is a waste of effort. Best to just stick with some blurb salted with words like “jobs”, “green”, “forward”, “sustainable”, “environmentally sound”…

    I think if you bring in your own money they might not take us seriously. ;^D

    I’m figuring on being CEO/design/engineering head with my wife as CFO. I can probably live with the 500k salary cap.

    What would you like to bring to the Gnu Viper Corporation? Anybody else?

    Cheerio,

    Bunter1,
    Future CEO
    Gnu Viper LLC

  • avatar
    Bunter1

    The aiming SAAB at Subie idea has some merit. They really stepped in and filled a market SAAB left.

    Go SAAB.

    It would be wild if they out lived the “mother ship”.

    Bunter

  • avatar
    Spike_in_Irvine

    What would you like to bring to the Gnu Viper Corporation? Anybody else?

    Bunter, put me down for Product Marketing, Public Relations and Event Management – that’s gotta be fun. And don’t worry about the salary cap if we can get a foreign govmint interested.

    I think we could start with a press boondoggle in Fiji and we should build in something around the Brazilian F1 Grand Prix. I am brimming with messaging!!

    Why couldn’t the viper viper nose? Because the adder adder ‘ankerchief.

  • avatar
    DarkSpork

    The one thing I’d like to see out of this is Saab producing reliable cars like they did in the 90s. My understanding is that withing the past 6 or 7 years Saabs have been junk that you wouldn’t keep much past 70k miles lest is break on you, hence the very low resale. I actually really wanted to get a lightly used Saab up until I learned about the problems newer Saabs are riddled with. Vehicles I was cross shopping: volvo s40, subaru legacy gt, v6 6mt accord, vw gti mkv. Reasons why the Saab seemed like a good bet: power, fuel economy, luxury, handling, snow prowess (I live North hence all the FWD cars).

  • avatar
    bill h.

    DarkSpork:

    If anything, some of the 90s years had numerous teething troubles–e.g. the early NG 900s, which morphed into the first gen 9-3s, by which time many of the issues had been sorted.

    Oh, and our ’04 9-5 wagon was bought lightly used (about 8k miles). Four years later it has 93k miles, so far no problems and we’ve driven it all over the eastern third of the US, and up and down the coast.

    On reliability, I’d be much more scared of most German makes of the same vintage.

  • avatar
    tauronmaikar

    I, for one, am excited and will be looking more closely at Saab in the future. Gone is the corporate stagnation and mindfuuck that accompanied GM. K-eggs are passionate and know their stuff. I think it will go well and we will be seeing some interesting and wild designs in the future.

  • avatar
    Andy D

    Saab needs to return to what it did best: Quirky innovations

  • avatar
    djn

    I’m not concerned that SAAB doesn’t have an engine plant. After all, when have they built/designed engines? 92/93/95 3 cyl 2 stroke, ex DKW(?), V4 ex Ford, I4 ex triumph. SAAB buyers never bought on the basis of the engine. 96, Sonnet, 900 even 9000 all weird. Weird is good. Uff da!

  • avatar
    Paul W

    Morea: You’re right about the number of cars. K-egg however, believe that by making Saab a “true” luxury brand, they’ll reach profitability at 70,000 cars.

    One has to remember that this deal is actually not done yet. There are still a lot of people left who have to go ahead and give it a green light in order for it to happen.

    Even if the deal gets locked in, Saab will run out of money any day now, and no loans will be available until September (at the earliest).

Read all comments

Back to TopLeave a Reply

You must be logged in to post a comment.

Recent Comments

  • ToolGuy: @Dan, The GMT400 vs. GMT800 question has always been interesting to me. I recently did some work on my...
  • sayahh: I used to buy Defenders but I haven’t been driving much, so I might get a set of Michelin’s Pilot...
  • Scoutdude: Be sure to look at the tirerack testing numbers too, at least for the tires that they have tested. That is...
  • Scoutdude: There are two basic kinds of analog gauges. One that return to 0 when power is removed and those that hold...
  • dal20402: These seem to be touring all-seasons, and the DWS06 is in the high-performance all-season category....

New Car Research

Get a Free Dealer Quote

Who We Are

  • Adam Tonge
  • Bozi Tatarevic
  • Corey Lewis
  • Mark Baruth
  • Ronnie Schreiber