By on December 7, 2021

Image: GM

These days, it’s hard to imagine a company better positioned to take on Tesla than Geely-owned Volvo and Polestar. Volvo made headlines back in 2015 when it promised that all new Volvos would be electrified starting in 2019 and ruffled more feathers when it spun off its successful motorsports brand, Polestar, into a purely electrified performance car line. Parent company Geely’s Chinese heritage allows Volvo nearly unfettered access to the all-important Chinese market and allows the company to benefit from economies of scale – through the Geely, Lynk & Co., and Zeekr car lines – that it simply wouldn’t be able to realize on its own.

Over the past 10-or-so years, the Swedish company – once on the verge of extinction – has flourished, going from strength to strength. Ford looks absolutely ridiculous for having sold Volvo, now valued at more than $20 billion, to Geely for “just” $1.5 billion (with Polestar going for another $20 billion, all on its own) back in 2010.

Sure, Ford wanted to fire-sale Volvo – but Ford wasn’t the only troubled American car company holding on to a respected Swedish car brand looking to make some fast cash. With a push here and a nudge there, Geely could have bought Saab, instead.

THE CASE FOR SAAB, 10 YEARS LATER

Back when Ford sold Volvo, it wasn’t obvious that Geely was making a winning play. The majority of Volvo sales were Mazda or Ford Focus-based cars like the S40 and C30, and the XC90, while solid, was already getting a bit long in the tooth. Saab was in a similar position, with its own quirky character getting watered down by cynical, badge-engineered cash grabs like the Saab 9-7x.

The biggest difference between the two, from where I sit, was the product funnel. Volvo had one upcoming car, really, and that was the S60, underpinned by the European Ford Mondeo platform. That platform would also spawn the XC60 midsize SUV that would effectively carry the brand in the U.S. until the 2015/16 launch of the second-generation XC90.

One platform. A good platform, sure, but still just one – Saab, thanks to GM, had four. In addition to the excellent but short-lived Saab 9-5, they also had the 9-3, and the 9-4 crossover, which was primed to capitalize on the crossover explosion that came in the 2010s. Finally, they had the concepts – most notably, the Saab 9-X Biohybrid.

This is where our automotive Sam Beckett steps in, pulling Chinese billionaire and Geely chairman Li Shufu aside and whispering that the future would be all about hybrids and electrification.

GM is losing money on every Saab they sell,” you tell Li. “But things are not as they appear. GM doesn’t know what it has – in another 10 years, GM’s whole operation will be worthless, and the only thing that will be of any value is their EV business. GM is even more desperate for cash than Ford is, too – they’ll take any lowball offer for Saab. You’ll get your European brand, and you might even get their EV patents at the same time, for less than the $1.5 billion you’re ready to spend on Volvo.”

AHEAD OF ITS TIME

Volvo’s 2015 commitment to electrification seems prescient now, but it wasn’t the obvious play back then. In 2015, Volvo didn’t have a single hybrid in its lineup, and had no real experience building electrified cars on its own. Its first hybrid, the XC90 T8, wouldn’t reach the U.S. until more than a year later.

In contrast, Saab first showed the 9-X Biohybrid at Geneva in 2008. Even now, the 9-X looks every bit like a modern car, with a turbocharged four-cylinder engine backed up by a big electric battery. Sure, it’s more of a big starter motor than a Tesla-esque drive unit, but in 2009 or ‘10 it could have played very well, especially for a Scandinavian brand looking for some green cred.

A few years down the road, with access to Geely’s billions and the same kind of creative freedom Volvo has enjoyed? I can’t imagine a world where the already excellent, final version of the Saab 9-5 didn’t prosper. Or one where the 9-4x didn’t sell, for that matter.

In the end, GM was willing to sell Saab for $74 million cash and a bunch of promised shares to an upstart Dutch brand called Spyker that doesn’t exist anymore. And even that paltry amount of cash failed to materialize.

Saab lingers on in the periphery of automotive memory – “Born from Jets”, sure, but eventually relegated to the dustbin of history, along with the EV1 and any real attempts from GM to take electrification mainstream and compete with Tesla and, back then, the Prius.

Saab

WHAT WOULD SAAB LOOK LIKE TODAY

Saab, like Volvo, is a Scandinavian company that held some deeply-rooted Scandinavian values. Assuming Mr. Beckett would have been successful in convincing Mr. Shufu to buy GM’s EV business for $1.5 billion – heck, he could even license back the tech to them as needed! – Saab could have had hybrid models of its 9-3, 9-4x, and 9-5 up and running by 2010, making it the first premium brand with a fully electrified lineup – optics that would be hugely beneficial in 2020.

Imagining Saab’s distinctive styling cues – certainly more distinctive than Volvo’s, circa 2008-10 – on Geely’s excellent platforms is easy enough, too, and there would have been no shortage of smart Saab execs who would stand in the way of forging an alliance with China.

So, why didn’t it happen?

THE PROBLEM IS ALWAYS GM

As early as 2009, it seems like it could have. Geely seems to have been denying interest in both companies right up until the point the check cleared at Ford. If you ask me, the problem wasn’t at Saab or Geely, it was at GM.

“GM never figured out how to integrate Saab, ultimately investing little in the brand while raiding it for technology like turbo engines and front-wheel drive,” said Martin Skold, who studies the auto industry at the Stockholm School of Economics.

Per-Erik Mohlin, a former president of Volvo Cars, put it more bluntly in an interview with the New York Times, saying, “GM had no idea what to do with Saab … I don’t think they had a clue what to do with a premium brand.”

Fast-forward again to 2020, and even the one premium brand you’d think GM could get a handle on, Cadillac, is shedding dealers left and right, with more than 150 dealers opting for GM’s $500,000 buyout instead of renovating their stores to line up with GM’s vision for the brand.

Why? TTAC’s illustrious once-leader, the Great Jack Baruth, sees it as a matter of dealers mistrusting GM’s vision for its remaining premium brand.

“And why not?” he asks, in one article. “Cadillac has been abusing its dealer body in egregious fashion since 1984. That’s 36 years of having to sell FWD sedans against the Town Car. Thirty-six years of engine problems from the ‘HT4100’ to the Northstar to whatever’s going to happen with the Blackwing V-8. Thirty-six years of selling cars that have been punching bags for the automotive media; 36 years of confusing and often self-parodying nomenclature (see: the simultaneous dealership existence of the XT5 and XTS) that eradicated whatever equity the brand had. There was a four-year “Lost Weekend,” where Cadillac moved to New York and pretended to be a Zara store.”

He goes on, but the point is made. GM’s top brass has been very much confused about what to do with premium brands for a long, long time – at least since they decided to put a Pontiac steering wheel in a Lotus Esprit, and maybe even before. If we’d been there, then, we might have been able to save Saab, and do so, so much more with GM’s EV tech as well.

That’s just my take. What’s yours? Did Geely do the right thing when it bought Volvo Cars, or do you think it could have done more with Saab and a few dozen EV1 patents? Scroll on down to the comments and let us know.

[Images: GM, Saab]

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23 Comments on “Quantum Leaps: Geely Saves Saab Instead of Volvo...”


  • avatar
    FreedMike

    Correct me if I’m wrong, but wasn’t Volvo selling in higher volumes than Saab at the time? That alone makes Volvo the better buy if I’m Geely. Plus, Saab had been mismanaged into oblivion by GM, and at the time of its’ demise, was selling fancied-up Chevys (which, of course, is the same thing Cadillac’s doing). At least Volvo was doing its’ own thing. Volvo for the win.

    The most cogent point this piece makes, though, is about the long-running mismanagement of Cadillac.

    • 0 avatar
      SCE to AUX

      You are correct.

      Volvo vs Saab sales:
      2007 106,213 32,711
      2008 73,102 21,368
      2009 61,435 8,680
      2010 53,948 5,445
      2011 67,240 5,610

      There was no reason to save Saab. At the time – and even today – I’d say the minimum viable sales for a company not on life support is about 60,000 per year (5000 monthly). Smaller volume brands that survive are almost always part of a bigger parent.

  • avatar
    SCE to AUX

    This was discussed – and possibly settled – in these pages a decade ago. Saab had already devolved into making GM-badged vehicles long before they went bust, so there was nothing left to save. Saab should have croaked at the turn of the century.

    “These days, it’s hard to imagine a company better positioned to take on Tesla than Geely-owned Volvo and Polestar.”

    Not so. I can imagine several: VW, GM, Ford, and Hyundai/Kia, in descending order of their seriousness and wherewithal. Toyota could be a contender if they tried, but their interest isn’t clear.

    Volvo and Polestar don’t even make the radar. Besides, in the US market Tesla already outsells Volvo 2:1.

  • avatar
    Dave M.

    I’m a Saabista and owner (2004 9-3 Aero convertible), but Geely chose well with Volvo. Their market was bigger, their image more defined, and their support system much larger. GM diluted Saab to the point of nonsense. I’m not saying GM had bad intentions; they kept Saab on life support much longer than Saab would have been on their own.

    Now, Volvo/Geely selling a couple of Saab models based on Volvos…that would be awesome. Ain’t gonna happen though….

    • 0 avatar
      BC

      Former saab owner x3 here. Saab always had lofty aspirations and great design but mediocre execution at best. They were never gonna make it. 1 because market moved towards saab and 2 new entrants could out innovate.

      Want a luxury sports hatch with good performance? Bmw GT models are better in every way
      Want a turbo4 – something that believe it or not was a unique selling feature? You now have dozens of options
      Saab was gonna go electric and go head to head with Tesla while undercapitalized position and beholden to a larger legacy automaker? I don’t think so

  • avatar
    spookiness

    1) Volvo had SUVs and a more diverse lineup, so Geely probably got the better deal.
    2) Does anybody know if Saab had any cultural cachet in China? Kind of like Buick? I ask that because a former co-worker grew up in Beijing and although they were well-off they were not super-rich, but she said her dad had a couple Saabs and loved them. Just could be an outlier.
    3) I still think GM should have made Saturn a alt-fuel/hybrid/EV division. Most normies didn’t know it was part of GM, and it had decent brand awareness and equity. Generations of people will probably never consider an EV Chevy, and the average Chevy store is going to push trucks trucks trucks, so there is a marketing and cultural mismatch I’m not sure will be overcome.

  • avatar
    SoCalMikester

    in the 80s to mid 90s volvos were “the” car for older, upwardly mobile asians. lexus seems to have stolen that market, and the upwardly mobile youths as well with the F sport line. this is spoken from daily observation in southern california.

    the old box ones? hipsters or truly broke/cheap white people. the same people that roll 40 year old diesel benzes

  • avatar
    Varezhka

    There really wasn’t much of Saab left by the time GM was putting it on sale. Some IP rights associated with 9-3 and 9-5, associated tooling and factory, and that’s about it. No guarantee that Geely would’ve been able to use the Saab name either since GM didn’t own that part.

    Volvo was in a much better place as a company with all the internal resources, IP, product line-up, and brand image. It was definitely a much better buy.

  • avatar
    ToolGuy

    @Jo Borrás,

    Consider the possibility that GM is (was) only half as stupid as you believe (or less, perhaps more) and did just exactly what they intended to do with Saab.

  • avatar
    wolfwagen

    If I’m not mistaken didn’t GM want to buy Volvo, but Volvo balked at their offer and took Ford’s offer instead? GM in a fit of rage bought Saab just to have something Swedish but just ignored it after purchase.

  • avatar
    conundrum

    That Swedish economics prof who claims GM raided Saab for turbos and front-wheel-drive must be Moose, the Saabanista beyond compare. A man who could not see reality. GM owned Opel who knew a thing or two about FWD, (’82 Cavalier, numerous Kadetts) and every Japanese company with a spare engineer with nothing to do had been turboing their cars since the mid ’80s. Wasn’t exactly rocket science, even Subaru managed it plus adding the foreunner of today’s cheapo single clutch AWD. FWD? Old hat you did with one hand tied behind your back. Saab’s IP was as deep as you’d expect of a tiny outfit — miniscule. They remade an Opel to make the 9-3, and a big Opel/Vauxhall to make the 9-5, and thought a lot of themselves in a completely unjustified way. As a PR spectacle it was a winner; the reality was there was nothing behind it except hubris and patting themselves on the back for being geniuses. Sales were, however, abysmal.

    The article is another Borras fantasy of a “what if?”. Li Shufu of Geely ain’t dumb, and owns 9.5% of Daimler, a Danish Bank, some percentage of Volvo Trucks, and is about as canny as a businessman can get. Why buy a useless Saab outfit when Volvo had worldwide markets and was just going through a rough patch? With Ford cowboys at the helm pretending they knew what they were up to, like Jacques Nasser and his “Premium” Group including Volvo and Jaguar, failure was built-in. US HO management incompetence reigned supreme. GM was about as clued in with SAAB. Motown and the midwest were decades beyond premium cars; all they knew since WW2 was mass production and getting the chrome appliques applied “almost” straight. And from 2000 to 2007, GM under Rick Wagoner lost $70 billion in value, all the way to zero and bankruptcy. So they couldn’t even run their own home outfit properly, let alone worry about a bunch of mavericks over at Saab making yesterday’s cars. No, Geely chose wisely taking Volvo.

  • avatar
    MitchConner

    Could care less what the Chinese do with their dirty money. Screw them. My take is on Ford.

    Mulally was an excellent CEO. That said, I don’t get why he’d unload Jaguar, Land Rover, Volvo, and Aston Martin — shutter Mercury — and make Lincoln the premium brand going forward even though it stunk of Geritol, Ensure, and Depends.

    I guess he felt North America came first and that Lincoln could’ve been revived with the least amount of money. Things were that bad after the great housing bust.

    Personally, I would’ve turfed Lincoln, sold Aston and Volvo, kept Land Rover, and taken Mercury up market — as any time Jaguar did anything that wasn’t born where mutton and warm, bad beer weren’t considered delicacies, like the X-Type, was roundly criticized even though the arguments against were completely stupid.

    Case in point: Ford spent a billion on engineering the Mondeo and Contour. More than Jaguar spent on new product development in its existence. Yet when the X-Type came out — a bunch of old British scrotums in their moth eaten wool hats, ancient tobacco smelling sport coats, and urine stained trousers couldn’t wait to crap all over its shared hard points — effectively tainting its launch even though it wasn’t that bad of a car — once they filled up on free food and booze while pocketing all the free swag their arthritic paws could grab before heading back to the moldy rabbit warrens they called home.

    Anyway, this was a really good read. Thank you. As for GM, they’re nothing but a bunch of idiots. Been that way for nearly 50 years. Just wait until Mary figures out she stuck her teat in an electric wringer. She’ll wind up in the clown heap of failures like Jacques Nasser and Cary Fiorina never to see another executive suite again.

    • 0 avatar
      downunder

      Wow, please don’t hold back. Stop mincing your words and say it out loud. What is really on your mind? Did some muttering rotter touch you up behind the Aston Martin stand at Earl’s court one day? Disappointed in the fact that Ford tried to make a Jaguar out of a Mondeo and it ended a failure, despite all of Ford’s experience in making distinctive(!) badge-engineered cars. Stick in some old leather and some real wood and everybody will believe it’s a Jaguar, just don’t look at the bit’s grabbed from the Ford parts bin.

  • avatar
    dal20402

    The comments here read like a bunch of retired mid-level managers hitting the Jack very hard indeed.

    But despite the wobbly, boozy amptoshere they are all right.

    Volvo SPA, Ford roots and all, was worth far more than all four of the GM platforms that Saab took and made mostly worse. The new XC90 alone probably generated more profit than all the cars Saab could conceivably have developed with any reasonable amount of capital. And, although I’m not sure the urgency of this was clear at the time, Volvo also positioned itself well pre-Geely to adapt to electrification. Saab’s portfolio was the result of a desperate struggle for survival using whatever tools were available, while Volvo’s had a pretty compelling vision for the future.

    • 0 avatar
      Helfrichi

      Say what you want about the mismanagement of Saab, their rebadged GM platforms were all superior variants. Forced to use GM’s parts bin, they flat out built better vehicles. The 2.8 is a prime example, seen as a trash engine in every application, the saab’s is known as legendary and a splendor to drive.

      The XWD system was ahead of everyone else’s, they mastered turboing engines, and were innovative even when constrained by GM by tweaking things like wheelbase behind their backs. They didn’t make GM worse, they were the superior brand.

      • 0 avatar
        dal20402

        The 2.8 was still laggy, thirsty, breaky trash in a Saab, and the Saab variant of any GM platform was basically a tradeoff of a nicer interior (and, in the case of the 9-3 and 9-5, improved suspension tuning) for any semblance of reliability.

        I stand by the position that Saab made GM platforms mostly worse.

  • avatar
    3SpeedAutomatic

    If you read the details of SAAB history, it was not able to amortize the growing development cost with each subsequent generation of cars. Fuel injection, turbo charging, emissions, safety (ie: air bags, crumple zones, etc) were expensive to develop on a limited budget, and very little volume to spread the development cost over. SAAB was backed in a corner when GM came calling; it had no choice.
    Another quirk was that SAAB was burdened with the development cost of the Cadillac BLS (GMs futile attempt to push the Cadillac marque on the Euro market). If this money had stayed with SAAB development, SAAB may have survived a bit longer.
    Lots of mismanagement by both SAAB & GM in the 2000’s. Sorry to see it go, but consolidation is the name of the game. Look at Stellantis; combo of Chrysler, Fiat, & PSA. Another example is Nissan, Renault, & Mitsubishi. Look for more hookups.

  • avatar
    28-Cars-Later

    That’s some classic Baruth.

  • avatar
    Victor

    That’s all a bit nonsensical, isn’t it? Saab could’ve burst into flames for the 9000 alone, that was supposed to share its innards with Fiat Croma, Alfa Romeo 164 and ended up completely different. They did it again when rebadging the Vectra B a few years down the road.

    Saab’s last hit was, what, the 900? I mean, I love the brand, but there’s a moment when the ice gets too thin, right? GM added insult to injury, they even tried to make Saab use corporate resources in order to survive.

    Quirkiness appeals to the car guy. The average premium car buyer wants something that drives nice enough, looks expensive, has some brand cache and that is minimally reliable. And that’s it. Corporate wants to turn a profit.

    Saab did not know how to be profitable.

    • 0 avatar
      28-Cars-Later

      Saab died the day GM took a 50% stake in 1989, but the Saab story -no pun intended- is the retelling of the little guy everyone roots for not being able to make it against the established players. Changing technology, fashion, labor, and trade were and likely still are too much for the niche players to successfully compete against (Tesla being the only exception I can think of). Could Volvo or JLR have survived the 2000s without being bought by corporate parents with deep pockets?

  • avatar
    Jeff S

    Saab is a real Sob Story with lots of tears shed. Doubt Saab would have survived anyway and it is questionable how well GM will do with EVs. GM is one hot mess and it’s only salvation will be to be bought out.

  • avatar
    RFMiller

    I’ll start with my own experience. I have owned the following Saab models
    2000 9-5 SE (3.0 liter turbo)- the last all Saab vehicle prior to GM involvement. I put 210,000 miles on this car, gave it to my daughter. She traded it at 280,000. I replaced the timing belt at service intervals, and a water pump. The engine was never opened, and it was still strong when traded. The best seats of any car I have driven or sat in, including Audi, BMW, and Benz.
    2007 9-5 Silver Anniversary Edition- 2.0 turbo Loved this car, but 2wd in the north, with 35-40k miles a year is not ideal.
    2008 9-3 Aero Xwd- 2.8 liter turbo- primarily my wife’s daily driver. Contrary to comments made here, this was not a GM motor, it was Australian, and was voted one of the ten best engines in the world in 2008. Look it up before arguing.
    2011 9-5- 2.8 turbo This was mostly a rebadged GM, with the 2.8 mentioned above. Not my favorite, and I traded it for an Audi S-4 in short order.

    Observations:
    * Saab vehicles under the GM badge were better products than the GM platform versions, but were priced too high for the GM type buyers. GM Never got their marketing positioned for the brand.

    * Swedish engineering has always prided itself on high quality. The Swedish royalty at one time placed a large order of Swedish mausers with Germany. The product was rejected because the barrel metal did not meet their specifications. Sweden then produced their own mauser, with their own grade steel. That bit of history is at the root of their manufacturing philosophy- make quality things that last. Oil pumps in Saab manufactured cars were made to last the life of the car. Cheap oil pumps used in Saab’s under GM were made to be easily replaced, so that they could be replaced. They also did not pump enough oil at idle, with the transmission in gear and foot on the brakes. That was an ugly story.

    * In 2011, the best concept car from Saab was the Phoenix. It was a hybrid all wheel drive, with a BMW 1.6 turbo at 220 hp, and a small electric motor powering the rear wheels. The engineering on the car was completed, and the car at the 2011 Geneva show was a functioning prototype. It was ready to go into production, and was intended to save the company. The .23 drag coeffecient and the powertrain blend resulted in 45 mpg highway. This was a unique entry into the hybrid market, years ahead of it’s time, and very innovative. Shortly after the show, the bankruptcy papers were signed, and the Phoenix turned back into a pile of ashes. Thank you, GM. Yet another shot in the collective foot.

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