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Saab – what is a Swedish car anyway?

Saab – what is a Swedish car anyway?

Published: 21 Nov 2011 13:21 GMT+01:00
Updated: 21 Nov 2011 13:21 GMT+01:00

The news that Chinese firms Pang Da and Youngman intend to acquire Saab Automobile, has been greeted by relief, resignation and objection, The Local's Geoff Mortimore explores the twisted fate of an iconic Swedish brand.

With the Chinese promising to invest more than €2 billion ($2.7 billion) into the ailing car maker, questions were immediately raised on the wider perspective of another household name possibly set to disappear from Sweden.

After all, at what point can a car made in China, owned 100 percent by Chinese companies, but sold under a Swedish brand name, still be considered "Swedish"?

Being foreign-owned is nothing new per se, but does the fact that the new owners of Saab and Volvo are both Chinese affect matters?

“You could say that it matters to General Motors that Volvo is owned by a Chinese firm, it could be less uncomfortable for them now,” says car industry expert Mikael Wickelgren at the University of Gothenburg, to The Local.

“But from a consumer perspective, there should not be much of an impact,” he adds.

Wickelgren argued that "Swedish values" can be maintained irrespective of the nationality of a brand's owners.

“It should not be any harder for a Chinese company to retain 'Swedish values' than for an American company or anywhere else for that matter. The key is what the purchaser of the company, in Saab’s case Youngman and Pang Da, perceive that they are actually buying and how much of a Swedish car they actually wish to keep and exploit.”

Bertil Moldén managing director of Bil Sweden, an umbrella organisation representing manufacturers and importers of cars, trucks and buses in Sweden, broadly agrees.

”From a purely commercial perspective, the fact that it is a Chinese owner can be very positive. A new, huge, market is now open to them as well as the chance to develop a traditional domestic one,” he argues.

Moldén argued that most consumers care little about where a car is made.

”If you buy an iPhone, you know it is designed in California but made elsewhere and by the same measure, it won’t be any harder for a Chinese company to retain the brand’s Swedish-ness than for an American or anyone else.

"As long as the core values of the new cars are still Scandinavian, that is all that matters... it is largely irrelevant where it was actually put together,” adds Moldén.

The fact that production of cars will continue for the near future, some five years at least, is also key, according to Moldén.

“In the short term, you can certainly still talk of a Swedish car industry,” he says.

"Cars are still being made here, and more importantly, it’s not just production facilities but back-up services, research, the manufacturing of spare parts and other factors that make up the industry as well.”

Volvo's buy out by Chinese Geely furthermore sets a precedent for Saab to follow.

According to Volvo brand manager Richard Monturo, it is not necessarily important to stress ”Swedish-ness” as much as the values that people associate with the country.

”There is a sense of humanity about Swedes. You have a progressive culture, where you look after other people and put the focus on them. That is how we use the Volvo brand,” Monturo told the Svenska Dagbladet daily.

He underlined that it is more important to focus on the core values on offer in a Volvo – reliability, safety, the environment and the way in which customers are treated.

Industry observers are in agreement that the Swedish connection remains relevant and Saab's history has been a key factor during the long running talks.

“From the discussions we have had, the Chinese buyers have expressed a deep understanding of the history of our brand and the values,” Gunilla Gustavs, spokesperson at Saab tells The Local.

“They are keen to maintain the reputation we have built up and are well aware that they are buying a premium Swedish brand which they have no intention of changing as far as they have indicated to us."

Mikael Wickelgren underlines that there are number of examples of car brands with strong national identities falling into foreign hands which continue to thrive, citing Jaguar, Opel and indeed Volvo as examples.

“In the case of Volvo, the brand values have been maintained and sales have not suffered, which indicates that buyers either don’t know, or don’t care that the company is no longer 'Swedish'," he says.

He warned however that Saab's problems could lie elsewhere.

“It is important to ask whether Saab has been negatively affected by the whole process and whether people have lost their faith in the company. That is an issue that needs to be addressed because it can have implications for the brand name and values,” she says.

As has been the case for so long, it is still a question of “wait and see” for all those involved in Saab. After decades of mounting losses, he argues that whether or not the latest twist will be positive is in many ways academic.

“It was completely crucial for Saab. If this hadn't happened, they would not have been working on the particulars of the Saab future but the Saab bankruptcy right now,” he says.

Geoff Mortimore (mortimore.geoff@gmail.com)

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Your comments about this article

04:28 November 23, 2011 by dglsgrhm
as a US resident and loyal Saab owner, I just hope the quality gets back to "before GM". They are great cars and the country shuld be proud of them. I have had 4 in the last 6 years and actually now trying to win one form my Saab dealer in Ohio.
08:20 November 24, 2011 by jetboy
Especially if the cars continue to be made in Sweden, this could be very good (and of course, some Saabs have been made oustdie of Sweden for a while now). For one thing, the Chinese have a strong interest in being leaders in green technology, so perhaps they will drive the all-electric Saab to reach market soon?
02:54 November 26, 2011 by 3rdjerseyman
What a sad joke. The Chinese use the profits from their totally unfair and exploitative trade scheme to buy the crown jewels of Western engineering and manufacturing, and somehow we are supposed to not just accept this but regard it as a good thing.

China will strp these companies of their technical knowledge and run them into the ground.

"Humane" Sedish values! Ha, you are in bed with the tyrants who "disappeared" the Nobel winner and his wife and who are threatening all of their neighbors with their hegemonic claim to the South China Sea.You are ignoring the immolation of the Tibetan nuns and monks and China's atrocious human rights policies.

No right thinking person should support the destruction of the North American and European industrial base. China is on the path to war. We have seen this movie before and it ends poorly.
13:31 November 26, 2011 by chinthe1
Speaking as somebody who worked at Saab Trollhattan in the late 1970's i am obviously saddened by the Companies sad decline.GM must bear a large part of the responsibility caused by their cynical exploitation of the Saab marque by using it to foist of dated GM models with a Saab badge to a gullible public. That being said,the Saab marque still has considerable cachet harking back to the glory rally years with Stig Blomvquist et al with the 99Turbo being their last true standout model.Within a few years China will be the world's biggest automobile market and the Chinese will no doubt capitalise on their booming home market by producing established iconic brands such as Saab on home territory.It is in the Chinese's own interest to keep production going to in Sweden and to hopefully concentrate much of their research and development in Sweden to maintain the credibility of the Saab brand worldwide.
21:59 November 27, 2011 by Escort
As a loyal Volvo customer, what has happened to the Swedish motor industry over the last decade or so saddens me. I DO care where a car is made, and I think you will find that Chinese ownership of Volvo, even if the cars are not actually made there, WILL discourage potential customers. Buying a £25,000 car IS NOT the same as buying a £100 iPhone or digital camera!

I think that the management and product planners at both Volvo and Saab have a lot to answer for. Many other manufacturers now build cars which are just as safe, durable and environmentally conscious, but they are also more affordable and probably reliable too. There is nothing very special or distinctive about Swedish cars any more, so it's no wonder that here in the UK people are replacing their Volvos and Saabs with products from VW/Audi, Honda, Ford, etc.

Critically, at least for the European market, they have failed to invest in the lower end of their range. Volvo and Saab cannot compete directly in the vital Golf/Focus/Astra sector - Volvo only have the ancient S40/V50 and the impractical C30, Saab has nothing at all. Because of this, they lose a huge chunk of sales to "premium" rivals which do have a presence in this sector, i.e. Audi, BMW and Mercedes, as well as mainstream manutacturers like VW, Ford and Vauxhall/Opel. And why no cars in the (almost) as important Polo/Fiesta/Corsa class?

When Volvo finally lauches the new V30 in late 2012 (this car was actually needed in 2010), I understand that they are planning to charge £2,000+ more than mainstream rivals. If so, buyers will continue to ignore them and take their money elsewhere. And that may include me.
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