It’s no exaggeration to say those in the know have not exactly been overwhelmed by the news Saab is to be bought by the National Electric Vehicle Sweden (NEVS) consortium.
The dramatic development – which saw off fierce competition from Chinese suitors Youngman and possibly Indian manufacturer Mahindra & Mahindra – now pits the Chinese/Japanese/Swedish consortium head-first into the electric vehicle market which hasn’t exactly set the world on fire with either sales or frankly interest in globally fraught economic conditions.
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Into the debate has waded former CLEPA CEO, Lars Holmqvist, many of whose members were catastrophically at the mercy of Saab’s precarious financial tightrope walk as it teetered from crisis to crisis during what has felt an eternity of false dawns and dashed optimism.
Indeed, Holmqvist himself is one of those distinctly underwhelmed by Saab’s Gothenburg receivers’ decision and delivered a decidedly lukewarm verdict on NEV’s ambitious plans.
Take this from Holmqvist to me today (14 June) from Sweden: “This is a bad development as in my opinion it ends up being within a year, a list of crises, a major crisis and there will be a call for support and jobs that have to be saved,” he said.
“They need to get a decent partner because there is no chance, no chance whatsoever these guys will be able to build an electric car. They have no idea how to build cars.”
Ouch. But the former CLEPA boss added for good measure: “We have said from CLEPA by 2020…we believe 10% of new sales in Europe will be electrified but we also mean by that, hybrids. If there are 0.5m battery electric [vehicles], if Saab is very successful, it might take 5% of that. It is minuscule.”
But Saab has already dipped its toe into the electric waters with a former 9-3 battery cabriolet says Holmqvist, but couldn’t sell anywhere near enough at a SEK670,000 (US$96,000) price tag.
That coupled with Sweden’s vast territory with relatively little EV infrastructure was always going to make it a hard sell, so where will NEVS’ markets be?
Well, according to Holmqvist, NEVS has made brave noises about China and the US, but as he reasonably points out, the consortium has not talked about distribution channels or partners.
The latter is surely of crucial importance particularly in a field that potentially has low volume and low return – “normally small volumes mean big losses,” says Holmqvist – let alone an uncertain incentive environment that varies wildly from market to market.
Which brings us to the body most able to influence that environment, namely national governments and when it comes to Saab, Stockholm has come under a sustained barrage of fire for not doing more and sooner to keep Saab going in the first place and then to ensure redundant employees secured future work.
“The Swedish government has said formally they are not involved in the process,” said Holmqvist, “but they believe it is good for the industry in Sweden. “The rumours are…the whole thing has been administered by the Finance Minister and Prime Minister. There is no smoke without fire.”
The Swedish government is involved at some level surely. Its National Debt Office runs Saab Parts – with rumours this could go into the administration’s control – and at some point will want its money back – money paid to shore up the famous EIB loan that saw Russian businessman Vladimir Antonov effectively refused any involvement with the ultimately bankrupt automaker.
The former CLEPA chief also noted the supplier members were highly unlikely to be over-impressed by any future electric car with a Saab badge – that is if it can secure the famous name. Quite frankly, without the name, and that depends on acquiescence from defence and security company Saab AB as well as Scania, any future project, no matter how grandiose and ambitious, is surely doomed to failure.
“Not in your wildest fantasies will the suppliers gear up development for the hopeful volume of 20,000 [vehicles] a year in two or three years time,” Holmqvist told me. “It is reality.”
Holmqvist has his finger on the Swedish pulse more than most – he now spends his time between his home country and his previous Brussels residence – and his views of caution are important.
There will be an awful lot of people – suppliers, unions, ex-employees, government and Saab’s long, long list of former creditors who will be willing this project to succeed, but who lace it with an understandable degree of caution and scepticism.
