Saab finds a buyer, shifts gears

Saab has languished in bankruptcy limbo since the end of last year, but this week a deal was announced that aims to reinvent the Swedish carmaker as a manufacturer of electric vehicles. Saab’s assets are being purchased by a new holding company, National Electric Vehicle Sweden, whose primary investors include National Modern Energy Holdings Ltd., a Hong Kong-based builder of renewable energy power plants, and Japanese investment firm Sun Investment. The price of the deal wasn’t disclosed.

The first new vehicle to be developed by Saab’s new owner will be an electric car based on Saab’s 9-3 model and is planned to debut in early 2014. China will be the vehicle’s initial target market. The cars are to be developed and built at a facility in Trollhättan, Sweden.

This deal struck me as an odd one. Making Saab run smoothly will involve reviving a nameplate that has lost money for nearly 20 years. And going all-in on an electric car venture seems inordinately risky given the safety flaps earlier this year with GM’s Volt and Fisker Automotive’s Karma; the US National Highway Traffic Safety Administration has been looking into fires associated with those models. Add to this the disappointing sales of the Volt and the Nissan Leaf, and one wonders if even the white-hot Chinese car market will be enough to finally get Saab off life-support for good.

“Electric cars are a very tough business with a lot of risk,” and “there’s been almost no demand for them,” according to Ferdinand Dudenhoeffer, director of the Center for Automotive Research at the University of Duisburg-Essen, Germany. Electric vehicle sticker shock and the vehicles’ limited range have so far deterred widespread consumer acceptance.

That’s not to say that EVs won’t eventually get to break-even, but given Saab’s long track record of financial losses, multiple owners, and failed turnaround schemes, it’s difficult to see how the latest Saab deal will wind up being the first chapter in the electric vehicle’s success story. Then again, whoever thought we’d ever again see the words “Jaguar,” “Land Rover,” and “profits” in the same news story?

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Photo by Pat Pilon, used under a Creative Commons license.

James Bryant

James Bryant is a writer and editor for the First Research team at Hoover's.

Read more articles by James Bryant.

Comments

  1. Catherine Colbert Catherine Colbert says:

    Odd deal, I agree. Saabs — particularly with the 99 Turbo — were known to be safe, practical, and so well-made that it frustrated GM brass when Saab engineers refused to cut corners. By going electric, Saab loses its identity and electric cars are still not practical. I rewatched BBC Top Gear’s “Tribute to Saab” — parts I and II. Sigh. I almost bought a Saab once but I’m not an architect, a profession that Top Gear notes most often navigates toward the Saab brand.

  2. Chris Huston Chris Huston says:

    Catherine — so weird that you note a Top Gear episode dedicated to Saab, because I’ve seen all but the most current episodes, and I thought I remembered them only ever mentioning a Saab model or two in passing and only dismissively. I knew Saabs were never considered, say, BMW/Mercedes/Audi-flashy, maybe a step above or even equivalent to the legacy Volvo image, but I thought they had some good looking and interesting cars. I’ll have to see if I can dig out this episode you’re talking about. Would love to see it.

    I agree that this shift is both curious and unfortunate. I guess, in the future, I’ll have to go to Autotrader to fill the Saab space in my “dream garage”. (Yes, my dream garage includes mass market consumer vehicles — my current car, a Subaru WRX, the first of such entries).

  3. Catherine Colbert Catherine Colbert says:
  4. John Huetteman says:

    The Saab while I was growing up represented status of a comfortable life for a single young professional in the socioeconomic class known as the middle. Since the 1980’s, life has changed here in America, and Saab disappeared along with its class.

    However, in terms of the Saab brand, I believe that Saab’s EV will be well received in China, its intended marketplace. And as China’s middle class grows endlessly, Saab may once again be a brand leader with the proper marketing efforts.

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