Mahindra/Saab Won’t Be Tata/Jaguar

I’ve been away for a few days on King Island for work, with no internet connectivity or phone connection. Let’s just say it was hard work to put aside the connected lifestyle. At least I had a soothing view:

KingIsland

While I didn’t see any Saabs on the island, at least I got to fly in one on the way there…..

Saab340

There has been significant ‘news’ around Saab this week, a story published by Svenska Dagbladet and picked up on other sources, including SaabsUnited. The ‘news’ – unconfirmed by any of the alleged participants but widely regarded as quite credible – is that NEVS are talking with two companies about either ownership or collaboration with regards to Saab cars. NEVS has limited its comment to confirmation that the company in talks with two Asian companies about various levels of either ownership or development.

According to the story:

  • Chinese car company DongFeng is said to be interested in development of the Phoenix platform, presumably with rights access so that they can build cars themselves on the platform.
  • Indian conglomerate, Mahindra, is said to be interested in an ownership stake and SU’s sources put their interest at more than 50% ownership i.e. a controlling interest.

The DongFeng scenario doesn’t interest me at all. I see two market problems here:

  1. From what I can tell at a distance, NEVS most likely need more than what DongFeng are likely to give. See below. And….
  2. If an actual Chinese government body buying into Saab (Qingdao) can’t fulfil their end of a deal, what sort of confidence would people have in pseudo-government company like DongFeng? It’s one of the bigger Chinese car companies, but even that title doesn’t inspire confidence in terms of the company’s integrity.

So that leaves Mahindra, which I think is the scenario that most Saab fans would be cheering for, me included. Most of the commentary I’ve seen cites the Tata/Jaguar relationship as evidence that an Indian ownership scenario can work for Saab. Indeed, I DO think Indian ownership can work for Saab but in my mind, that’s got nothing to do with the TATA and Jaguar Land Rover situation.

Long Term Thinking Required

If Mahindra buys into Saab, you’d want them to have a 20-year plan and a strategy to carry Saab losses for a significant portion of that time. That’s how long I believe it’s going to take for Saab to have any realistic chance of being profitable.

Saab’s best chance at survival was back in 2010, when Spyker took over. Why? Because of the range of cars it had ready to roll.

The 9-5 isn’t my favourite Saab, but it was ready for sale. I believe the 9-4x was going to be a major success for Saab in some of the company’s key markets. That car was ready for sale, too. A combination of 9-3, 9-5 and 9-4x was a great foundation for Saab to build on and GM had already spent the bulk of the money to get these models up and moving. You cannot underestimate the advantage Saab had in this situation.

Sadly, Spyker didn’t have money of it’s own, the Swedish Government put the clamps on Antonov and GM wouldn’t allow Saab’s other potential suitors to get in the game. Such is life.

The best chance for a new owner is to have a long-term plan in place that seeks to develop key models in potentially profit-rich segments of the market. Of course, they also need the resources and the skills to pull the plan off.

Say Ta-Taa to comparisons with Jag-wah

A lot of people bring up the comparison with TATA and Jaguar Land Rover. That comparison might have been accurate if Mahindra had purchased Saab in 2010 instead of Spyker. 4 years later, it means next-to-nothing.

When Ford sold JLR to TATA, they sold years and years worth of model development that took Jaguar from the somewhat crappy X-Type and S-Type models to clear segment competitors like the XF and the new XJ. Given the development cycle and long lead times in the car business, plans were also most likely well underway for models like the XK, the F-Type and the new XE that Jaguar showed at Geneva earlier this year.

Saab was in a similar position in 2010 but unlike TATA, Spyker didn’t have the money to capitalise on it. Saab had new cars ready to roll and plans for the future in the pipeline. Now, in 2014, the new 9-5 and 9-4x are mere memories that cannot be reanimated. The Saab 9-3 is nowhere near its modern new-vehicle competition (except in the eyes of the most fanatical Saab people) and the Phoenix platform is still being emptied of it’s GM content two years after NEVS acquired it.

A prospective new owner of Saab, or new shareholder, would therefore be starting from scratch. And that’s a really, really long road.

Market Segment Will Be Critical

In the past, I’ve given SU – and Tim in particular – an occasional whack for acting too fan-boy with the SU readership. Accordingly, let me be as free with my praise for what I think is a very sensible public position on Tim’s part and a significant departure with past positions:

I’m sorry to be a party killer here guys but all journalists, economists, dealers and car people that used to work at or with Saab is more or less saying the same thing: unless Saab is able to bring out 3-4 new high-tech high-priced prestige models, sell all of them at a loss for 3-4 years while upgrading them, the brand would not survive.

I agree. Totally.

Saab will have to position itself in the higher end of the mass market. Of this I have no doubt at all. I’ve been questioning NEVS’s strategy with Saab for ages because at a very basic, fundamental level, their business plan simply didn’t make sense (unless they had bundles of cash to burn, which we’ve recently learned is not the case).

Saab has a small manufacturing capacity. It can’t readily produce any more than 180,000-200,000 cars per year and that’s not enough scale to survive unless you’re fetching a reasonable premium on your product.

Yes, a new owner can (and most likely will) increase capacity by manufacturing in a low-cost country, but you’re going to have to increase scale by a hell of a lot – well into the million range – to achieve profitability.

Let me take you back to something I wrote earlier this year in a piece called How Do Car Companies Make Money?:

In Saab’s case, it would make, on average, around US$5000 on its bread-and-butter model, the Saab 9-3. You can increase that amount by around US$3000 for a 9-5 large sedan, a 9-4x SUV or a convertible 9-3. ….

….Saab wanted a small car but did not have the money to develop it. If it had made that smaller vehicle, however, the margin would have been around US$2000 per vehicle.

With materials and labour accounted for, the remaining margin per vehicle has to cover all the other aspects of the company’s operations: technical development, safety, crash testing, NVH, global marketing resources, events, PR…. and many more functions.

It doesn’t take that much more incremental effort to make the larger car instead of the smaller one. You can do the sums for yourself. The upmarket area is much more profitable if you’re going to be a small volume manufacturer. It won’t be palatable for some, but Saab has to go the upmarket route. Saab simply has to chase those market segments with higher margins. Somewhere north of Volvo, for sure.

People talk about the old Saab being an affordable, small and simple family car. And this is true. They also talk about Saab returning to that point of origin, which would be crazy.

Back then, Saab was underwritten by the Wallenbergs and was part of a government-supported aircraft company. Saab itself saw the need to move upmarket, which is why it made the 99 as a successor the 96 and the 900 as a successor to the 99, etc. Each new model was bigger and more sophisticated because that’s where Saab needed to be as a small-scale manufacturer.

Tim’s got it right – Saab has to move upmarket if it’s to be viable. The alternative is to go high-volume, which Saab has neither the capacity or the reputation for.

As always, I think all Saab fans wish the company well.

I vowed after the events of 2011 that I wouldn’t give unqualified support to a new owner because I didn’t want to sway people towards supporting a company that may not be viable. Many of the people reading this are personal friends and I wouldn’t want to see you/them spending hard-earned cash on something that was vulnerable.

I’m quite sure that policy won’t change under a new ownership structure. I wish them well, for sure, but there will always be questions when things don’t make sense.

Time will tell.

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31 Comments

  1. Jaguar/Tata is really Jaguar Landrover / Tata – buyers over the years had to put up with Jaguar to gain access to Landrover. This was seen as a worthwhile deal however Jaguar would not exist without the off-road side of the house. Fingers crossed but I really doubt if Saab will be operating in 2034.

    1. Fair call, Jon. LR are definitely making the prime contribution but I imagine Jaguar would be contributing by now, too. It would certinly be relying on the LR side for continuity, though.

      1. It really looks like LR has been carrying Jaguar for the past few years. That’s OK, as long as Tata can find some common platforms between the two. I imagine that the new small Jaguar will share platforms with the Evoque/Freelander replacements, just like the current ones are based on the S60 platform.

        A Mahindra/Saab connection could make sense from Mahindra’s perspective. They need to expand globally if they want to stay in the automotive business, and they need some solid engineering to do that. The question is “is it cheaper for them to develop Phoenix than to make their own platform?”

      2. I would not hang my hat on it but my understanding is that Jaguar is still ‘underwater’. I believe that the F Type and new X Type have to succeed if Jaguar is to remain open in the long term.

        My point was really about warning anyone who thinks that Mahindra can revive Saab. Landrover gives Jaguar breathing room to get on track where the owners see value in the brand. My concern is that Saab will be under pressure to make money too quickly and ultimately suffer the same kind of mismanagement we saw under GM.

        It would make more strategic sense for JLR to adopt Saab as it’s small fwd car brand providing Mini, Golf and 3 series cars than for Mahindra to make a go of it.

  2. Agree totally Swade. Sadly it seems like this may be the end for Saab, given the scale of investment, timeframes, and market goodwill to get something competitive back into a segment of the market that is well serviced by companies that are along down the road.

  3. I struggle to see how they can come back from here, to be brutally honest. By the time we see any new cars on the road nearly all the Saabs currently running around will be off the road, through natural attrition and write-offs. The brand-lovers will have moved on to something else, even the die-hards like me.
    I am currently dealing with yet another mechanical issue on the family wagon. The brand as we know it is now only really the label on the badge. The 9-3 needs to be shelved, as it is clear no one will actually buy it, despite its recent romantic revival. So the time that it takes to get the next model to market will be another 3 years. At least.
    What to do then? Facelift an already 11 year old outdated car that the buying public will ignore? Develop a fresh new start-up vehicle? Remodel another design from the new parent company? The business model relies on sales, ultimately. The bottom line is certainly sales. Go high-end, for sure. The margins are certainly better and value to the customer is higher, creating better perception and reputation. High volume = Toyota territory, not where Saab should be by a long shot.
    New customers will expect and indeed demand quality and solidity from a BMW equivalent. The doors need to thud shut like s bank vault, not rattle like a rubbish bin lid.
    Build a very well made, distinctively stylish and exciting car that drives well in all situations and contexts. Make it a touch sporty too for the thrill. And that requires money and time to develop. Lots of it.
    The NG 9-5 wasn’t anywhere ready enough when it was launched, for lots of reasons we all know about. It ended up hurting the brand very badly. Possibly more than we all knew at the time. Let’s not see that happen again either.
    So, Saab gets one last shot. Mahindra should have been given the green light long ago. Vision and money is required. Maybe more vision than money.

    1. “The NG 9-5 wasn’t anywhere ready enough when it was launched, for lots of reasons we all know about. It ended up hurting the brand very badly. Possibly more than we all knew at the time. Let’s not see that happen again either.”

      Strange…
      I own one and it is the best Saab I´ve ever had. (And I´ve had a few. used and new)
      I find it the most completete Saab ever and with very few problems.
      Sure, I´ve been to the local dealer and had a software update or two.
      The seatheaters have been changed.

      Apart thet the car has worked like a dream.
      It´s a 2011 9-5 Aero Biopower. Fully opt.

      1. I also have ng9-5, no problems and running fine. And excellent car indeed. But i would say that there are some sw,bugs and bit and pcs which definately needed some,finwtuning still to keep that high price tag. Anyway,,best and advanced saab ever.

  4. Wow, very good comments above, and I agree with them largely. I’ll add that there is always a third way, an in-between place where expectations aren’t binary (survive or not). That’s my prediction for Saab. I say that Saab lives on with intellectual property developed for electric cars (NEVS) and design/manufacturing (Saab) feeding the Tata (or other) manufacturing centers and then lending the Saab badge for the premium cars built in those factories.

    I think that manufacturing in Sweden could be restarted for small volume production of premium cars for Europe only (perhaps convertibles, XWD, etc.).

  5. The other model of course is Lotus. Provide consulting services and basic assembly to other companies while treating your own range as technological demonstrators more than anything else.

  6. Be interesting to find out if Qoros have turned good press into solid sales and when they expect return on the $1.5 billion invested?

    The name SAAB still has some worth but the gamble will always be large.

    If Mahindra gain control maybe they can leverage TATA/JLR for some engines…

    Would I pay 40-50k for a SAAB? [yes]

    Some Aussies are paying 50k for a hyundai Sante fe….

  7. I disagree with Tim’s statement for 2 reasons (but other than that, I mostly agree with the overall sentiment – there is no hope trying to compete on volume with Toyota, let alone Hyundai)…

    1) I’m not sure that SAAB needs 3-4 models to be successful. Look at Mini, Fiat, Tesla, Landrover, and there are others.. these all essentially are 1 model companies in North America. They have some variants but those are mostly flops. SAAB needs to start with at least *one* really good car that embodies all that is SAAB and that is truly unique (think SPG). SAAB needs a clear message that resonates with the long term fans first. Otherwise, they might as well throw in the towel. All of the brands listed above have 1 unique clear message. SAAB can not restart as BMW or Audi.

    2) I’m not sure that I agree that a car needs to be large in size to have a good margin. A 911 is not large, but I bet there is a good margin there. In contrast, I bet some GM land yachts have fairly low margins. What matters is that the car be a premium product – high quality inside and out. Clean simple (aka Scandinavian) design can be used to achieve the feel of high quality with better economy (ie good bottom line helps margin at a given market segment). Again, unique and clean design is more important than trying to play “me too” with the Germans and ultimately Hyundai.

    There are market undercurrents these days where people pay a premium for simple, green, efficient, utility, natural materials etc… size matters less than all of this… tapping into this is key. The Germans really have not done that very well. The Swedes used to be experts in this back before it was cool. Why do you think the c900’s are going up in value? I can’t say this loud enough: make a modern premium hatch(/vert) that heavily draws inspiration from the SPG! Make the message clear! Then move on from there…

    1. Mini and Landrover may be one model brands in the US but not in the rest of the world and JLR are very open about developing cars to suit the tastes of the Chinese customer – the new Range Rover was heavily influenced by China. JLR is a six model range and scrabbling to expand as fast as funds and the market allow. Mini is doing something similar. You need a broad range to ‘lock in’ your customer base. An A1 customer moves up to an A3 then an A4. Want a convertible or coupe – come this way sir/madam. You have a family now and need space have you considered something from our Q range? The World has moved on from tiny model ranges years ago. Jaguar is even launching a 4×4 which is clearly nuts aside from the huge profits to be made.

      1. So, eg in Canada, there are 9 Mini models listed… but they are all basically the same car – or at least the ones people are buying. I don’t really consider a vert to be a different model. But for a new SAAB to start by rolling out a 9-2, 9-3, 9-5, and a 9-7 (or whatever)… well I can’t imagine they would have the resources to do any of them well.

        Look at Tesla. They started by making electric sports cars. Completely a niche, but it was for proof of concept. The cost was very high, as it needed to be to be viable. Early adopters will pay that, and by making it a toy (a sports car), reliance on the thing as a daily driver was less critical. Now they have the S, and it is pricey, but appropriately priced imho. Volumes are higher, but not that high yet, and it is a premium product with a premium price (partly necessitated by the tech)… Tesla is focused on the S. I don’t even think you can buy the sports car anymore. They want to add models and become more accessible… but they seem to be taking it 1 step at a time and providing a clear message.

        So that was mainly my point – SAAB can’t just roll out a whole model line from the get go and take the world by storm. Nobody has the resources to do that, and it isn’t really necessary. No reason not to add on over time, but to start, imho, they need a clear message.

        1. Totally agree with this. Saab would need to reinvent itself as a proper niche, high-end manufacturer. Develop the Aero-X concept. Stick with electric drive. Compete in the Tesla space. Give the motoring press something interesting to talk about. Then go from there with cars that are more accessible.

          Tesla did it right. Saab, with it’s heritage and brand proposition, can live in that space quite naturally. Innovative, unique, stylish – but it would have to perform, too.

  8. Reading the voluminous comments on SU, everyone has an opinion on what they want Saab to be, very few seem to be commercially viable (what a surprise!) , and the dominant theme seems to be that they want a BMW/Audi/Merc level premium quality car, for the price of a VW Golf, or a Toyota.

    Given they just spectacularly failed in their home country to persuade anyone other than a handful of people to buy the 9-3, then it proves you cant just put a product out there with SAAB on the front, and expect people to buy it. And that was ‘a genuine’ Saab, not some rehashed Asian car.

    When they started the wind down in 2009 they mortally wounded it. In reality it died in March 2011, when production stopped. A whole host of other manufacturers have moved into what little void was created, and the world has relentlessly moved on.

    They are just blowing air into a corpse at the moment.

    Still, it makes a fascinating soap opera from a business side – again, as witnessed on SU – when the article is about the cars – there are little or no comments, when its about Saab, the business – there are tons!

  9. Mahindra taking a controlling stake would probably be the best thing to happen to Saab since 2009, and indeed possibly the best thing since 1990.

  10. I think one of the key issues is confidence. Regardless of which market segment SAAB decides to target, people will be reluctant to buy unless they have reasonable confidence that the company will be around for the foreseeable future. I don’t think any of us had much confidence in NEVS or, despite Victor’s energy and enthusiasm, in Spyker’s ability to finance the re-launch. Mahindra is in a different league altogether in terms of financial resources. The question is, are they willing to make a big enough financial commitment to make believers out of the sceptics.

  11. hm… maybe the phoenix plattform is more developed than we think…
    at saabblog i read there was a mule driving around Tr. …
    that would make things look different…

  12. Saabs will be around from at least a while. There are 2102 used Saabs listed on cars.com this evening. A few are 2011 9-5s with 5 miles listed on them. What is needed is the desire and the money to continue to build and sell new Saab cars. And, of course the desire to buy Saab cars. Me, I’ll be a Saab owner for a while.

    Just a thought.

  13. My thoughts…

    As usual, lot’s of mentioning of the “premium” word. Premium is not the same as quality. Just look at Mercedes and their corrosion problems, BMW SUVs with their broken suspensions, and VW groups problematic DSG boxes. Premium is not even the same as a high price tag, even if it do aid in building the illusion of something extra even if it isn’t. Premium is primarily about having the customers feeling something for the brand itself and not only the product. That could make it more desirable (you can raise the price), evoke a feeling of uniqueness, have the customer pay more for something they really don’t need (again, you can raise the price), and have the customer (and even the market and the media) enter the Reality Distortion Field where common sense breaks down and hype take over.

    But in the end it is all about margins. If you have high enough margins on your sale, your company can survive. And to sell, you have to be seen on the market and have something that (in enough buyers views) other don’t have.

    Saab has to find something that sets it apart from other brands. There is an illusion that the Saab name is enough. It isn’t. Jaguar and Land Rover (since the comparison has came up) are far more well-known brands in the world than Saab. Saab may be recognizable as a car brand to many car buyers, but hardly anyone know more about the history etc. that we in the Saab community feels sets it apart from the rest. Swedish, Scandinavian, Nordic – yes, that is one part that is useable. Airplane heritage – sorry, nobody today cares about that. Turbo – again, car buyers today (not even in Sweden) know about that heritage – and they don’t care. Safety – yes, a good thing but being a pioneer in safety 10, 20, or 30 years ago has nothing to do with your next model on the market (look at Qoros). There was a chance in 2010 to continue to build on the small market presence that existed and slowly finding a niche, but not today. They need to do something else, and just saying premium will not do it.

    The EV is one such route, and in my view probably the best one. The market is not that crowded, and focusing on one type of product makes it easier to communicate the brand and concentrate the resources.

    The low-cost route of Dacia or some Asian players is another one, but that rules out production in Sweden – and thus the use of the Saab name. And there is no point investing in Saab and a brand name if you want to go that route. It is all about commodity and low-cost anyway.

    The Qoros route is interesting to follow. Obviously low-cost but not to the extreme. Top safety. Design that is to the point without being overdone or convoluted. Modern infotainment for Western needs and taste. The more I look at Qoros, the more I feel that is where Saab should have been today. I think I would have been happy with such a Saab.

    There is also a simple but important now-a-day lesson to be learned from Qoros. It seems to be a well-funded operation from start and the owners seems to have been working methodically along the way. Yet, it took them six years to enter the one (1) market (China) with one (1) model (Qoros 3). Put that in contrast to people who thinks that Saab just need somebody (like Mahindra) with deep pockets and then voilà! – 2-3 years later there is a full premium model range built on the hyped Phoenix platform for sale all over the world. Yeah right…

    1. I mostly agree, but a couple of things:

      1) wrt margins – you need margins, but you also need sales numbers. Having a good margin on too few sales will not get a company in the black. There needs to be the right balance of numbers and margin for the product position. Obviously the recent 9-3 release was an example of that. No idea what the margins were, but they didn’t sell, and at the right price they would have. Would there have been enough margin at “the right price”? I doubt it.

      2) In manufacturing, there is a spectrum between low volume/high quality/high margin and high volume/lower quality/low margin – but to do production in Sweden, where labour costs are not cheap, imho, low margin/high volume is not easily resolvable. SAAB really needs to be looking at a higher end clientele that can support the manufacturing realities of their site. So even something like Qoros might not be so manageable in Sweden. As someone pointed out above, it is completely infeasible for SAAB to pump out a 5 series product at a Toyota Camry price point. That is Hyundai’s territory, and even with their lower production costs, it doesn’t entirely work out (sales good, product ok, but still a veneer compared to the Germans). Once the primary selling feature is “price” it is a downward spiral imho… there is always going to be someone out there to undercut you! It will happen to Hyundai, just like they did to Toyota, and you can see them already scrambling to up their image of quality (and price points).

      I love the Koenigsegg videos that Swade posts up here periodically. While I doubt he could have made SAAB fare much better financially, he does seem to have his head screwed on right technically. And from a business perspective also – they have found a niche which works in Sweden: a super high end product where quality matters above all else. I think if SAAB offered something actually in Porsche or Tesla or better-than-BMW territory in price and quality, it would be feasible to build in Sweden in numbers greater than Koeningsegg numbers. How much lower down the spectrum they could go? I’m not sure… but it is easier to build your brand reputation on quality and later offer something accessible vs trying from the start to convince the public that your cheap product is somehow “premium” because the seats are thin leather(ette)… getting a small number of high margin sales requires less overhead than a large number of low margin sales also!

      On a related note: Alfa has announced dealers for North America’s reintroduction. It will be interesting to see how that progresses! Their advantage is that Fiat has already gained some dealership traction here.

  14. I was just lying back in the dentist’s chair getting a broken filling repaired, and the chat got on to cars. ‘What do you drive?” “Saab turbo, I said. Two of them”. “Oh, I thought they were long gone”, came the response. I quickly went over the change of owner history and that the factory was still ‘operational’, (he didn’t need to hear the latest developments, really). And that cars were made. This was was a huge and genuine surprise. And the conversation then headed, (with my mouth full of a squealing drill and cotton wadding) to fuel economy. He was mightily impressed with a petrol turbo engine and with the economy and power figures my 2002 car was able to get.
    And THAT is where we need to go. Innovate for the long term mechanical solutions we are screaming for. Do what Saab did back ‘in the day’ across a whole range of important areas. Don’t reinvent what doesn’t need doing, but go where noone has really gone yet. Dare to be creatively different. And the Saab buyer will pop his head up and think…’they’re back, finally’. The one who wants to be impressed by clever thinking and a genuinely innovative approach to motoring. Without a Germanic undertone.

  15. Moving upmarket for Saab is going to be very difficult for Saab and 4 to 5 years of heavy losses will be the absolute minimum. Saab can’t instantly become a prestige brand when it barely rated as premium (largely due to some very average GM parts) previously. It has to build up trust and respect from it’s potential buyers. Unfortunately it’s lost a lot of those commodities in the past few years.

    Who’s going to plonk down large wads of cash on a new prestige Saab when it might conceivably not be around in 2 or 3 years time? The fanboys won’t. They’ll complain that they are too expensive and most of them have only ever bought used Saabs anyway. Whoever buys Saab will have to convince custormers they are here for the long haul and it isn’t going to be easy.

    I’ve often felt that one of the main reasons Spkyker failed, is because it bought Saab at the wrong time in the model cycle. If GM had replaced the 9-5 in 2006 (as it originally planned) and Saab had been sold with a new 9-3 ready for launch instead of a new 9-5, I think things would’ve been much better for Spyker. Instead it had to finish the NG9-5 and convince customers to buy the most expensive Saab ever and it also had try and sell a 9-3 which was way past it’s sell by date. Perhaps both of those things were too much to ask? The 9-4x might a have been a small toe in the water in the SUV market, but Saab had to buy the car from GM so I doubt if was ever going to be hugely profitable until Spyker could replace it.

  16. Finally, I come up to agree both Swade and Tim’s thoughts about Saabs business! 100% agreed I mean. The question is to M&M: is their a viable business model for the Saab brand? The Saab name aside, is Trollhättan able to bring anything to M&M (platform ready)?
    IF they could receive a positive answer to those 2 questions, then hope is still alowed. I do not have the answers, yet.

  17. Interesting times. Strangely though, the underlying tone is actually positive this time around, compared with the last iteration of this situation. If there is optimism at this point it is that there is no visible negative press. That to me says a lot in the scheme of things. Certainly a decent business plan and clear forward vision from Mahindra will give a modicum of hope to readers and followers in the next few weeks. I look forward to it immensely.

  18. Two things I have been persuaded of:

    1. Saab has to be relaunched as a convincing, unambiguously upmarket luxury car, with a price tag to match. This goes against my personal preference, and my romantic view of Saab’s early history, but I recognise the global market reality. Now that Dacia and Kia, etc, make excellent products at low prices, it is more clear than ever that the over-supplied mass market, including the entry premium segment or whatever it was they have been in, is a road to nowhere for an outfit like Saab. The likes of me then has a choice: either buy a new Skoda, Kia or Dacia, or splash out on a 3-yr-old high-mileage luxury Saab. I’m fine with that. Actually, personally I would opt for a new Citroen, but I digress…

    2. In order to achieve successful luxury status, Saab must be spoiled by its new owner. In terms of financial muscle, ambition and automotive know-how, Saab fans could surely not ask for better than Mahindra in the present circumstances. It’s highly unlikely to be worse than GM, put it that way. Would that it had been possible for Koenigsegg to take on Saab and create something lean, mean and green, but that is not on the table. Provided that Mahindra recognise they need to give Saab all the luxuries it needs to convince in the marketplace as a 100% Swedish engineered luxury car, surely foregrounding environmental and practical dimensions – eg a smokin’ hot EV or hybrid station wagon / combi with all the Saab touches updated and rendered using the best materials – and that this process obviously will take 5-10 years before it produces financial results, then the future could be bright. Mahindra would then trickle down technology pioneered in Saabs to their other stables, I guess as VAG does with Audi.

    If Saab is taken upmarket by people who know what they are doing, which GM clearly did not, then success is a price worth paying if it means I only get to drive s/h ones.

  19. There aren’t enough former SAAB buyers on the planet to sustain a “new” SAAB vehicle’s design, certifying, and eventual sale, even if it was begun tomorrow.

    Yes, there is a contingent of dedicated SAAB fans still out there, but it is a small contingent, and no where near large enough to make the launch of a completely brand new vehicle successful. Which any vehicle to be launched in the next 2-5 years would have to be.

    The brand has been out of the public’s consciousness for far too long. Any reincarnation of the brand would take a massive PR push to bring it back. Is that impossible? Maybe, maybe not. Is it likely? Probably not.

    Even at the height of SAAB’s popularity, it was a niche brand. Some clown 😉 reported SAAB’s best ever sales number took place in 2007 at 133,137 units sold world wide.

    http://www.trollhattansaab.net/archives/2007/01/global_sales_re.html

    Any “new” SAAB would need to have numbers far exceeding these to be even marginally successful.

    SAAB would need to sell MORE than the 2007 number PER MONTH…to have any hope of success. Chances of that happening any time soon? You make the call.

    Take a look at the worldwide sales numbers for this past January…yes…ONE SINGLE MONTH. Even in SAAB’s wildest dreams, they weren’t ever in the same league.

    http://www.best-selling-cars.com/international/2014-jan-international-worldwide-car-sales/

    And taking the plunge on a completely new, and unproven vehicle is a leap of faith many people just aren’t willing to make. Especially if their target audience is in the higher-end of the market.

    Unfortunately, it is the classic Catch-22 situation.

    And as has been stated here before. Many of the designers, engineers, and others, associated with the previous incarnation of SAAB, have moved on to other places. It is highly unlikely any of them would ever consider going back to SAAB, no matter how much they loved the brand. They have been through too much to be drawn into this mess again, I’m sure.

    1. A few things:

      1) sales numbers required to break even are dependent on margin. Sure if Saab wanted to compete on 9-3’s at Toyota prices, those numbers per month might be needed. Less so at the higher end.

      2) Mini was a niche brand in North America 20 years ago. Waaaaaaay more niche than Saab is today. Like you would see one on the road almost never! Wow things are changed. There are a couple Mini’s parked in driveways on my street. Fiat also. Both are still niche. Why can’t SAAB carve out a niche. There are lots of former SAAB owners driving around in BMW, Audi, or Subies… if SAAB made something super cool, some of them would come back.

      3) Didn’t a good wad of the technical staff migrate back into NEVS? I thought Swade reported on that, but others more knowledgeable can correct me if I am wrong.

      I’m not overly optimistic at the current situation, but I don’t think success is impossible. A realistic business plan is essential though.

  20. they should be targeting the mid-high price range.

    anyway,

    i laugh when i see someone driving around in a $40,000-$50,000 kia or hyundai. stupid people.

    driving around a sh#!box with fancy sheetmetal.