Quantum Leaps: Geely Saves Saab Instead of Volvo

Jo Borras
by Jo Borras
quantum leaps geely saves saab instead of volvo
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 LATERBack 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 TIMEVolvo’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.
WHAT WOULD SAAB LOOK LIKE TODAYSaab, 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 GMAs 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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  • Jeff S Jeff S on Dec 11, 2021

    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.

  • RFMiller RFMiller on Dec 13, 2021

    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.

  • SCE to AUX Probably couldn't afford it - happens all the time.
  • MaintenanceCosts An ugly-a$s Challenger with poor equipment choices and an ugly Dealership Default color combination, not even a manual to redeem it, still no sale.
  • Cha65689852 To drive a car, you need human intelligence, not artificial intelligence.Unfortunately, these days even human brains are turning into mush thanks to addiction to smartphones and social media.
  • Mike1041 A nasty uncomfortable little car. Test drove in 2019 in a search for a single car that would appease two drivers. The compromise was not much better but at least it had decent rear vision and cargo capacity. The 2019 Honda HRV simply was too unforgiving and we ditched after 4 years. Enter the 23 HRV and we have a comfy size.
  • SCE to AUX I wonder who really cares about this. "Slave labor" is a useful term for the agendas of both right and left."UAW Wants Auto Industry to Stop Using Slave Labor"... but what will the UAW actually do if nothing changes?With unrelenting downward pressure on costs in every industry - coupled with labor shortages - expect to see more of this.Perhaps it's my fault when I choose the $259 cell phone over the $299 model, or the cheaper parts at RockAuto, or the lower-priced jacket at the store.Do I care about an ethical supply chain? Not really, I just want the product to work - and that's how most consumers are. We'd rather not know.Perhaps the 1990s notion of conflict-free, blood-free, ethically-sourced diamonds will find its way into the auto industry. That would be a good thing.