That Electric Saab Makes No Sense At All

Bertel Schmitt
by Bertel Schmitt
that electric saab makes no sense at all

A hitherto unknown Chinese business man who leads a shadowy “consortium” buys the assets of Saab. The media eats it up. Dalong “Kai Johan” Jiang takes the microphone and says what everybody wants to hear: “Electric cars powered by green electricity is the future and electric cars will be built in Trollhättan.” Jiang says there is a huge market for these made-in-Trollhättan EVs, waiting in China.

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.

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2 of 24 comments
  • Campisi Campisi on Jun 19, 2012

    “Electric cars powered by green electricity is the future and electric cars will be built in Trollhättan.” This quote by no means confirms that SAAB EVs will be built in Trollhättan and then shipped to China. All it says is that EVs will be built in Trollhättan, and I'm sure that will be part of the business plan when they eventually attempt to sell the things outside of China. It also says nothing about Trollhättan being the ONLY location building EVs; getting a factory up and running in China (whether or not public statements mention such plans) seems like a much better assumption to make than that of "this guy must be an idiot." Looking at this whole deal, I'd venture to say that Mr. Dalong eventually intends to sell his products internationally. Producing a token amount of cars in Sweden allows them to unofficially make the case that the domestically-produced vehicles are a carbon copy of a foreign design, and if the venture takes off to the point of viably expanding outside of China a successful automaker would have far less trouble licensing the SAAB name than an unknown group of investors. If and when that takes place, having bought what was left of SAAB would allow them to claim lineage to the original company.

  • Stanczyk Stanczyk on Jun 20, 2012

    If You deal with bussiness that call itself "consortium or investments" it means You can expect rather fraud .. than niche (not nouveau-riche) car-brand production ... In my opinion they want to use sweedish know-how and produce cheap equivalent in China ... (they'll pay a lot for SAAB, but they'll make much more money because of Chinese market size ... ) [On the other hand chineese companies are relatively not bad in "dealing with batheries" (they produce a lot of EV-bikes /scooters , and BYD recently presented 300KM-range EV car , ... so ?!? ...] ... @TokyoPlumber has quite interesting theory ... Chinesse learn very fast that nowadays, in this MickeyMouse economy :) "blinky PR" is everything ! ... :)

  • Probert There's something wrong with that chart. The 9 month numbers for Tesla, in the chart, are closer to Tesla's Q3 numbers. They delivered 343,830 cars in q3 and YoY it is a 40% increase. They sold 363,830 but deliveries were slowed at the end of the quarter - no cars in inventory. For the past 9 months the total sold is 929,910 . So very good performance considering a major shutdown for about a month in China (Covid, factory revamp). Not sure if the chart is also inaccurate for other makers.
  • ToolGuy "...overall length grew only fractionally, from 187.6” in 1994 to 198.7” in 1995."Something very wrong with that sentence. I believe you just overstated the length by 11 inches.
  • ToolGuy There is no level of markup on the Jeep Wrangler which would not be justified or would make it any less desirable [perfectly inelastic demand, i.e., 'I want one']. Source: My 21-year-old daughter.
  • ToolGuy Strong performance from Fiat.
  • Inside Looking Out GM is like America, it does the right thing only after trying everything else.  As General Motors goes, so goes America.