By on June 18, 2012

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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24 Comments on “That Electric Saab Makes No Sense At All...”

  • avatar

    Investors step right up! Get in on the green car while you can!

  • avatar
    Speed Spaniel

    I feel really bad for the SAAB brand. Can’t it just RIP? This is like stringing a cadaver on a puppet string and saying, “it’s a alive!”. I feel worse for those who drive SAABs – what happens when it breaks down and what do you do for parts? I saw a new generation 95 parked next to me and thought what a really nice looking machine. Sad.

    • 0 avatar

      Speed, I drive an ’04 9-5 and, thankfully, the parts network is intact. The bankruptcy broke SAAB into various pieces, but the transition of the parts business has been pretty smooth (at least in North America).

      I agree though – I wish SAAB would die a dignified death. I say this as someone with a lot of affection for the brand and its cars (I’ve owned 6). An electric car is a worse perversion of the brand than even the 9-7x was.

      • 0 avatar
        Speed Spaniel

        You are a lucky guy. I regret that I never had the opportunity to own a SAAB. I appreciate their uniqueness. I still love the design of the 900 turbos of the 1980s and think that design is one of the best car designs in history. I often think had the company done a modern yet retro interpretation of the 80s era 900 (not the mainstreaming attempt of the 9-3) it might have sparked interest in the brand. As a side note, the number of old and new SAABs here in the Boston and Southeastern MA area is astounding.

      • 0 avatar

        Speed – I’m one of those old SAABs in SE Mass! Compared to the rest of the US, Saabs are almost commonplace around here.

        Agree on the modern interpretation of the original 900. Would’ve been a winner I suspect.

    • 0 avatar

      This has gotten woefully like the auto version of “Weekend at Bernie’s”. I just don’t follow the part of the plot where we find out why Bernie/Saab needs to appear to still be alive.

  • avatar

    1. Set up (via buyout this time) a front business that not only may fail, but everyone expects to. Check.

    2. When it (expectedly) fails, shrug it off as your best effort, put out some lame PR (aka propaganda) about a valiant effort, market issues beyond your control, global recession, yada, yada, yada. Check.

    3. Public sees both another failed SAAB deal, and another failed EV and goes back to watching the Olympics. Or Spongebob in the US. Check.

    4. Make off with more Western technology on the cheap and dirty. Check.

    Nah, the Chinese would never do that.

    • 0 avatar

      It’s a nice construct, but what Western tech is there to be had? The tooling for the old 9-5 and 9-3 has already been sold to other Chinese firms. GM has withdrawn all patented tech from any Saab deal with relation to the Epsilon II 9-5. The much-touted “Phoenix” platform for the admitted gorgeous 9-3 patent drawings is vaporware, and what was developed was either minor in-house adjustments to GM parts (see above-withdrawn) or theoretical purpose-built parts that certainly never materialized during the bankruptcy/bidder war nonsense.

      Also, as has been mentioned elsewhere, the Saab brain-drain has already occurred. So the design/engineering talent is almost nonexistent.

      Again, as has been mentioned, the Saab name is almost certainly not going to be licensed by Saab Aerospace to a knock-off, vapor-heavy Chinese/Japanese/Whateverese consortium with questionable backing and even more questionable intentions.

      I’m not trying to rip into you, I simply don’t see what “Western technology” of any value remains with the assets of Saab, other than a manufacturing facility in a notoriously unionized and labor cost-intensive European country. What would the Chinese want with that?

    • 0 avatar

      Cheap and dirty? Nothing about this deal is cheap, and the only thing dirty about it is what a pain in the ass it’s gonna be to deal with Saab’s remains. If all they wanted was some crappy technology this was a ridiculously expensive way to buy it…they had to take on all of Saab’s debt so that’s a $1.6 billion bill right there before the price they actually paid for the company.

      You’re just being a racist idiot.

  • avatar

    And this EV enterprise is going to float along until it releases its first EV in early 2014, funding teams of engineers, new tooling, and new market presence, with no revenue stream?

    Other EVs have taken years to develop; this one will take 18 months.

    Yeah, right.

  • avatar

    I smell a nasty front here. What I’m interested in right now is what this is a front for.

    • 0 avatar

      The EV angle implies they are looking for grant money or other green dollars/

      • 0 avatar

        Money from whom? Swedish Government? Good luck, they refuse to invest in Saab when they still producing cars and have an actual Swedish workforce. Now that they don’t have products and owned by Chinese? The Obama administration might’ve conceivably help if it was a US company, but it’s not. Why would US government help an EV company in another country? Chinese government? Again it might work if the company is located in China, but it’s not. I am at loss to figure what motive or plan this Jiang guy had in mind, and where he got the money for this cockamamie scheme.

    • 0 avatar

      Getting a toehold for a Chinese manufacturer in the US, with an existing name, dealership network and reputation.. and as a bonus who can say no to electrics?.. Not Obama.

      Electric powertrains are very easy to integrate, high school kids do it all the time.

    • 0 avatar

      I think this is what everyone is looking at. No one can figure this out. There has to be something that China gets out of this, but what? Who knows? Outdated tech? A factory with nothing to make?

      I really don’t know what they are getting out of this and I think everyone else is doing the same, they don’t get it either.

    • 0 avatar

      I smell criminal activities. Sorry if that borders on conspiracy, but it’s the only logical thing I can surmise.

  • avatar

    I saw Direct injection in a 91 SAAB, i guess they’re pretty advanced.
    The owner never had any issues with it. He owned the car for 2 yrs, only changed an alterator.

  • avatar

    I heard the sky was falling!

    More speculation less fact, sad…

  • avatar

    Beijing Auto (BAIC) bought the 9-3, and old 9-5 platforms, and have developed them into the M-Trix platform that will underpin at least four models in their new lineup. One of those models, the C-70GB, is an EV sedan, about the same size as a Camry.
    NEVS absolutely must build their EV in China if they are to have any hope of being competitive. It would seem that Trollhattan would only be used for R&D if this venture actually takes flight.
    BAIC plans aggressive use of the M-Trix architecture and will eventually offer EVs in various sizes, offering direct competition for anything NEVS attempts to produce.

  • avatar
    el scotto

    Imagine the Chinese government telling their bureaucracy to buy Ev’s. Bureaucracy says we’ll build recharging stations all over the place. It could be done.

    • 0 avatar

      good lord.. It won’t happen, parking is such an issue here that it makes Manhattan look sensible.

      They park everywhere you can fit a car here, street/sidewalk/on the grass if there is any.

      Essentially most of the charging stations would be pretty unusable and worse I suspect most of the people who ride electric bikes/scooters would be mad enough that they’d do a lot of disconnecting of electric cars that are plugged in.

  • avatar

    Rather than chasing magic bullets it seems more prudent to seek motive. What does Mr. Jiang hope to gain through this announcement? Is he hoping to secure funding from the Swedish government? Is he using this as an opportunity to increase his profile in China? Is he trying to reel in local Engineering talent that didn’t come with the assets bought by his consortium?

    Back in January a Wenzhou businessman (Lin Chunping) made headlines in China after he purchased Atlantic Bank in the United States. He was feted at home in China and given a position in the Chinese People’s Political Consultative Conference (a key political advisory group). It has just been revealed that Mr. Lin’s story was a complete fabrication. He was seeking fame and influence (ie, power) at the cost of a few words … and it worked very well for a few months!

    It’s now very common for even the smallest of Chinese companies to do direct business with international customers. However, it is not so common for Chinese companies to buy large foreign companies (whole or assets). As a result businessmen like Lin Chunping and Jiang Dalong tend to get a lot of positive attention. And this attention can be used to further their ambitions at home.

    So, perhaps Mr. Jiang realizes that his claims don’t need to make sense given the context. For the folks back home in China what’s more important is that he bought the assets of a large, established European company (ie, thereby burnishing his credentials as a successful international businessman).

  • avatar

    “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.

  • avatar

    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 ! … :)

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