• Sweden's news in English

Chinese firms could swoop for Saab: analyst

AFP/The Local · 25 Nov 2009, 09:09

Published: 25 Nov 2009 09:09 GMT+01:00

Facebook Twitter Google+ reddit

For GM, the complication comes just as it is working to trim its post-bankruptcy losses, accelerate repayments of government loans, and finance the restructuring of its European operations after deciding not to sell Opel-Vauxhall.

"The question is will they keep it as part of Opel, or are there other buyers, or will they just eliminate it as they did for Saturn," said Michelle Krebs, an analyst at automotive website Edmunds.com.

GM's board will discuss Saab's future at a meeting on Tuesday.

A spokesman told AFP he could not speculate as to what the board will decide to do.

"From GM's perspective it's probably not that big a deal," said David Cole, chairman of the Center for Automotive Research in Ann Arbor, Michigan.

"When the company turns around, as they are doing, they'll be extremely profitable and the size of the issues with respect to Saab will not be that great."

There's a strong likelihood that GM will find another buyer for Saab given how many cash-rich Chinese companies are jockeying for a position in the global auto industry, Cole said.

Purchasing a relatively "cheap" European carmaker like Saab would provide both a foothold in key markets and the technology needed to compete, Cole said.

GM could also decide to hold onto Saab, as it did with Opel, to further strengthen its European position.

But the high cost structure in Sweden could provide an impediment, so "one option potentially from a GM perspective is to shut it down," Cole said.

That decision would be far less complicated and costly than some of the projects GM already has underway, such as winding down its Saturn brand after talks broke off in September with Penske Automotive Group on a bid for the nameplate, Cole said.

It's unlikely that GM will hold onto Saab and finding another buyer might be difficult, said Rebecca Lindland, director of automotive research at IHS Global Insight.

"It's such a shame. We don't know what the scenario would be but we're hearing rumors of a wind down which would be dreadful," Lindland told AFP.

"You have these really iconic names that are just dropping off."

The problem with Saab, Lindland said, is that it does not have a "really well defined identity anymore" nor does it offer potential buyers a very well developed dealership network or particularly valuable proprietary technology.

Story continues below…

While Saab is still a "saleable" brand, "it's really tough to say what it's worth," Lindland said, especially give that costly delays and a lack of financing were cited as the root of Swedish luxury carmaker Koenigsegg's decision to back out of the deal.

Keeping the brand simply doesn't make sense for GM, Lindland said.

Saab never made much money under GM's ownership and -- unlike Opel -- is not an integral part of the automaker's operations.

GM should also be able to absorb the costs without too much damage to its post-bankruptcy balance sheet and is "pretty well versed in winding down brands at this point."

"This is a little like getting rid of your favorite pain of jeans because they just don't fit anymore," Lindland added.

AFP/The Local (news@thelocal.se)

Facebook Twitter Google+ reddit

Your comments about this article

10:17 November 25, 2009 by Rick Methven
The problem with Saab, Lindland said, is that it does not have a "really well defined identity anymore"

Because GM came in and turned a good car into the usual American cheap and nasty crap with built in obsolescence
10:51 November 25, 2009 by peropaco

Saab was a remarkably weak brand way before GM stepped in saved it over a decade ago. Traditionally when a company acquires another, it takes time to implement changes and this is truth with the GM-Saab deal as designs are usually years ahead of production.
11:48 November 25, 2009 by rumcajs
I'm into cars, I like'em and I've sold'em sometimes.... and I think I know what the problem is: Marketing!

SAAB's are not "bad" cars as many people say. Your average SAAB would last you the same as (or more than) many other brands with "good" rep. and give u about the same amount (or even less) of problems. I've never had a SAAB, but now some of them as well as I know many BMWs, Audis n' VWs and do you know what?... same thing. SAABs are just cheaper.

But people are very materialistic and they don't want the features without the "brand". Just the same as many don't want a hybrid that doesn't look like a hybrid. SAAB should look for a different kind of customers, cos the ones who buy cars with those looks and features in general do care about the brand... a lot; and in that field SAAB is fighting a loosing battle. Imagine that IKEA starts selling a little bid more..., let's call it "posh" furniture (that;s relative, but just to give it a name). It wouldn't work cos the people who buy "posh" furniture, wouldn't buy it from IKEA... or can you imagine some of those pseudo-royal caracters telling their friends that they bought this and that in IKEA?? That'd be a shame!

And it's a shame that most of people don't see the good "practical" points of cars like SAABs and Volvos. Just for the rec. I've never had one cos I drive A LOT in the city, so I went for a Prius.
12:53 November 25, 2009 by Rick Methven

GM did not step in and save SAAB.

GM bought 50% in 1990 to get in on the good technology. They did not get 1005 ownership until 2000.

The past 20 years since GM became involved has seen the decline of a good car manufacturer.

In 1993 they pushed SAAB into replacing the ageing but still good and innovative 900 classic with the so called 900NG in attempt to get a wider market penetration. This car was NOT a SAAB but an Opel vectra with a SAAB badge on it that actually alienated real SAAB aficionados.

Then in 1998 they pulled the 9000 model and replaced it with the 9-5. basically the same 2.0/2.3l engine but attention to detail and finish has declined rapidly since. Ask any SAAB mechanic or SAAB driver such as myself who has owned a total of 11 SAAB cars - 1 96, 1 99, 4 Classic 900's, 3 9000's, 1 9-5 and even 1 SAAB 600.

As to profitability during the GM years. SAAB made a loss on every SAAB sold in the US because SAAB Sweden carried the cost of production but the revenue from sales went to GM in the states.
14:39 November 25, 2009 by peropaco
The Local, whats the deal? You have four articles goin about Saab. Slow news-day? No rapes or low prison sentencing to report?
15:27 November 25, 2009 by David W
I live in the US and am on my third SAAB, a 60th Anniversary Ice Blue 9-3 convertible. I was very shocked to see the SAAB deal fall through. I will say right here and now, that if a Chinese company does buy SAAB, I will never buy another again. I will not buy a Volvo either as they are going to be Chinese owned shortly.

SAAB has been the only manufacture I have bought more than once. My convertible has been a great car and goes against all the negitive reports about SAAB reliability.It will be a sad day if it goes away/goes Chinese.
17:22 November 25, 2009 by V70
Finacial Times Quotes

A person close to the situation said on Tuesday that talks to close the deal between Koenigsegg and its Chinese partner had "not been going well" since then. Several people involved in the process said there was little chance the deal could be revived.
03:20 November 26, 2009 by falcon
GM will NEVER sell current (latest) technology to China. Won't happen.
07:39 November 26, 2009 by Kooritze
China is the furture........the fast rising economic power which means that they will buy up many well known brands. We in the west will just have to learn to accept that.

Sentimentality and a belief that our products are superior will have to change.

Remember when Datsun cars first appeared in the 80,s many laughed at Japanese cars. Did,nt take them long to be world leaders in everything from cars to electronics. It will be no different with Chinese products.
09:46 November 26, 2009 by bjinger
agree with #9.

It's the comppetition that makes business grow and better, which are in the best interest of customers.

Chinese can do as good as others, just looking back at its shining history.

If Chinese can be part of the development of Saab, who says it'nt good thing.
11:06 November 26, 2009 by latent
U can choose buy or not if you do not really like the result in Chinese..But the fact is that they are doing well, they can buy it aleady represents their capacity and ability. To Succeed or not for one case on either SAAB or VOLVO is not the real point and only a symbol of a huge starting.........I would say if U do not buy any chinese products after 10 years, then you are fully empty in your home and nothing to use except yourself..
12:34 November 26, 2009 by karex

It's one thing for your shoes to fall apart while you're walking. What's the worse that can happen, cold, wet feet? Now, if your car starts to fall apart at the seams doing over 80 Km/hr then you're in real trouble...

Or worse, your car completely blacks out while you're driving (which happened to me BTW, not funny), etc... the electronics in these things are controling everything these days - let a bug slip by and it could be disastrous. As a famous quote by an automaker once: This is not a PC, you can't just re-boot if it starts to go crazy.

Just ask Airbus about their flight Rio-Paris which ditched in the middle of the Atlantic Ocean - no survivors...
14:14 November 27, 2009 by rumcajs
I agree with karex. I don't care if my Chinese underwear is s**t. Not even my TV. But a car costs a lot of money compared to shirts, shoes or underwear.

Also there are a lot of people here that don't seem to see the difference between these to things:

"- H&M (Swedish owner) Shoes + China Factory = H&M (Swedish owner) shoes "MADE" in China".... China just MAKES them.

"- Chinese Volvo (Chinese owner) + China factory = 100% Chinese car with a Swedish NAME.... China is the owner AND producer."

.... those are 2 very different things.

Has any of you been in a Chinese car? I was once, in Colombia and only the way from the Bogota airport to the hotel was more that enough (and scary) to see they are terrible. It wasn't just that it felt like a tractor... but like a very cheaply made tractor!
Today's headlines
Refugee crisis
Asylum requests in Sweden down by 70 percent
Sweden's migration minister Morgan Johansson. Photo: Christine Olsson/TT

Sweden received 70 percent fewer requests for asylum in the period between January and September 2016 than it did during the same time last year, the country’s justice and migration minister Morgan Johansson has revealed.

The unique story of Stockholm's floating libraries
The Stockholm archipelago book boat. Photo: Roger Hill.

Writer Roger Hill details his journeys on the boats that carry books over Stockholm's waterways and to its most remote places.

Refugee crisis
Second Stockholm asylum centre fire in a week
The new incident follows a similar fire in Fagersjö last week (pictured). Photo: Johan Nilsson/TT

Police suspect arson in the blaze, as well as a similar incident which occurred last Sunday.

More misery for Ericsson as losses pile up
Ericsson interim CEO Jan Frykhammar presenting its third quarter results. Photo: Claudio Bresciani/TT

The bad news just keeps coming from the Swedish telecoms giant.

Facebook 'sorry' for removing Swedish cancer video
A computer displaying Facebook's landing page. Photo: Christine Olsson/TT

The social media giant had censored a video explaining how women should check for suspicious lumps in their breasts.

Watch this amazing footage of Sweden’s landscapes
A still from the aerial footage of Sweden. Photo: Nate Summer-Cook

The spectacular drone footage captures both Sweden's south and the opposite extreme, thousands of kilometres north.

Sweden could be allowed to keep border controls: EU
Police ID checks at Hyllie station in southern Sweden. Photo: Stig-Åke Jönsson/TT

Sweden could be allowed to keep ID controls on its border with Denmark beyond the current end date of November, following discussions among EU leaders in Brussels last night.

Why women in Sweden will work for free by November
File photo of a woman working in a Swedish office. Photo: Anders Willund/TT

A new study into the gender pay gap suggests Sweden still has some work to do.

Look familiar? Meet your jawbone's ancestor
Thank God for evolution, eh?

There's something fishy about the human jawbone – it has its origins in the placodermi, a jowly species of fish that lived 400 million years ago, Swedish and Chinese researchers say.

Isis claims unremarked arson attack in Malmö
The arson attack took place on Norra Grängesbergsgatan in Malmö. File photo: Emil Langvad/TT

An arson attack in Malmö that caused only minor damage and was barely reported in the media has been claimed by terror group Isis.

Sponsored Article
This is Malmö: Football capital of Sweden
Fury at plans that 'threaten the IB's survival' in Sweden
Sponsored Article
Where is the Swedish music industry heading?
Here's where it could snow in central Sweden this weekend
Analysis & Opinion
Are we just going to let half the country die?
Blog updates

6 October

10 useful hjälpverb (The Swedish Teacher) »

"Hej! I think the so-called “hjalpverb” (auxiliary verbs in English) are a good way to get…" READ »


8 July

Editor’s blog, July 8th (The Local Sweden) »

"Hej readers, It has, as always, been a bizarre, serious and hilarious week in Sweden. You…" READ »

Sponsored Article
7 reasons you should join Sweden's 'a-kassa'
Angry elk chases Swede up a lamp post
Sponsored Article
Why you should 'grab a chair' on Stockholm's tech scene
The Local Voices
'Alienation in Sweden feels better: I find myself a stranger among scores of aliens'
People-watching: October 20th
The Local Voices
A layover at Qatar airport brought this Swedish-Kenyan couple together - now they're heading for marriage
Sponsored Article
Stockholm: creating solutions to global challenges
Swede punches clown that scared his grandmother
Sponsored Article
Swedish for programmers: 'It changed my life'
Fans throw flares and enter pitch in Swedish football riot
Could Swedish blood test solve 'Making a Murderer'?
Sponsored Article
Top 7 tips to help you learn Swedish
Property of the week: Linnéstaden, Gothenburg
Sponsored Article
How to vote absentee from abroad in the US elections
Swedish school to build gender neutral changing room
People-watching: October 14th-16th
Sponsored Article
'There was no future for me in Turkey'
Man in Sweden assaulted by clowns with broken bottle
Sponsored Article
‘Extremism can't be defeated on the battlefield alone’
Nobel Prize 2016: Literature
Sponsored Article
Stockholm: creating solutions to global challenges
Watch the man who discovered Bob Dylan react to his Nobel Prize win
Sponsored Article
Why you should 'grab a chair' on Stockholm's tech scene
Record numbers emigrating from Sweden
Sponsored Article
'There was no future for me in Turkey'
People-watching: October 12th
Sponsored Article
Where is the Swedish music industry heading?
The Local Voices
'Swedish startups should embrace newcomers' talents - there's nothing to fear'
Sponsored Article
Last chance to vote absentee in the US elections
How far right are the Sweden Democrats?
Property of the week: Triangeln, Malmö
Sweden unveils Europe's first elk hut
People-watching: October 7th-9th
The Local Voices
Syria's White Helmets: The Nobel Peace Prize would have meant a lot, but pulling a child from rubble is the greatest reward
Missing rune stone turns up in Sweden
Nobel Prize 2016: Chemistry
jobs available