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Back Home Again: The Future of Saab?

Feb 2009

Saab and Volvo.  They're both Swedish brands owned by American parent-companies suffering serious financial ills, but the future for each company is taking wildly different paths.

Saab especially has news that has the home country cheering, for the European automaker is returning to autonomous state, and reverting to building cars that are almost – but not quite – premium performance machines. When he was questioned about this by press representatives at the recent Detroit Auto Show, company spokesperson Eric Geer waxed rhapsodic, saying, "You would not believe just how happy everyone in Trollhättan is about this," and using words like "ecstatic."

What is the Basic Plan?

Saabs path to the future will be funded initially by a financial aid package they were offered by the Swedish government.  The package, approved in Stockholm last December, is a $3 billion package to be shared by Saab and Volvo, consisting of a $2.4 billion line of credit and an immediate $600 million emergency loan fund.  In addition, there will be funding for a new automotive research and development center, to the tune of $360 million.

The parent companies of Saab and Volvo, General Motors and Ford, respectively, helped the two brands plead their cases to the Swedish authorities, making it clear in the process that the Americans were eager to divest. Volvo has had interest from other buyers, but Saab is not so fortunate – they've been compared to Hummer with respect to lack of interest (though this might help when looking for the cheapest car policies).

Nevertheless, Saab has bold plans.  They intend to use the Swedish credit line to reconsolidate everything, and return the heart and soul of the business to Trollhättan, ideally by the beginning of next year.  An article in last week's edition of Inside Line cited an unnamed Saab source as saying, "GM has been absolutely cooperative in letting us take this road home.  They frankly have much bigger fish to fry and no time at all to really focus on resolving our situation, so there is no resistance from Detroit."

So what will be coming from Sweden? Look for the next 9-5 family of cars, as well as the 9-3 to be coming out of headquarters, killing the original plan to build the former at Opel's factory in Russelheim.  As well the 9-4X crossover will be brought home to Trollhättan, rather than being produced at the Ramos Arizpe facility in Mexico as originally planned.

More info from that unnamed insider: "GM and Saab will remain connected technologically for at least a few years in an amicable supply partnership, but Saab will then be fully independent by the next generation of products in 2014 or 2015."  This means that, if everything runs smoothly, the new 9-5 could be ready for delivery as soon as October, 2009 and no later than spring, 2010, with the 9-4x slated for early 2010.

This is all great for Saab: returning to their roots, and consolidating everything at the Trollhättan  headquarters may breathe new life into a company already known for automotive innovations such a bio-Hybrids.

Volvo, on the other hand, will likely be taken over by a Chinese investor, probably Chang'an Auto, which is already a Chinese Ford partner.  Rumor has it that Dongfeng and Chery have also expressed interest.

Two companies.  Both Swedish.  But only one is coming home: Saab.

So, what do you think of this?  Send me your thoughts and comments by clicking HERE!

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Last modified: May 20, 2009