Why Saab's Chinese Electric Vehicles Are Not Real
According to recent news, Saab isn’t dead. It’s been re-born as a Swedish-Chinese company that will produce electric vehicles, mainly for the China market. Sound like a fantasy? It is, sort of.
Sure, Saab’s assets were purchased in mid-2012 by National Electric Vehicle Sweden (AB), which was started by a Swedish-Chinese guy named Kai Johan Jiang. And its website says the company’s aim is “to be a front-runner in the automotive industry, with a focus on electric vehicles.” But that is a pipe dream. China is awash with domestic and foreign producers of electric vehicles whose brand names enjoy much more recognition and in many cases higher status than Saab. If NEVS’s real purpose is to sell gasoline-powered mid-sized sedans in China, well, that will fail even more miserably than the plan to sell EVs.
NEVS, despite its name, is not a dedicated EV producer. Indeed, it has started production of a gasoline-powered Saab 9-3 sedan. According to its website—NEVS did not respond to an email request for comment—it is producing a very small volume of gasoline-powered vehicles, known as the Saab 9-3 Aero Sedan 2014, right now in Sweden. The plan is to sell the car in Sweden and China.
No details regarding plans to introduce electric vehicles to Sweden, but NEVS does say that in 2014 it will launch an electric vehicle in China. No specifics about whether or not that will be a full electric, plug-in hybrid electric, or regular hybrid though I’d bet on a plug-in hybrid electric as the Chinese government is pushing PHEVs more strongly than pure battery-powered electric cars in the near-term.
Both plans are destined to fail. According to Kevin Huang of WAYS Consulting in Guangzhou, China, “the sales of Saab in the China market has always been poor.” From 2007 to 2011 it sold only 2,057 units in China. Sales ceased in the second half of 2011. So the Saab brand has never had a good sales base in China for gasoline-powered cars. I won’t even go into the fact it lacks a dealership network. Or that BAIC, a large state-owned automaker, acquired the rights to an older Saab 9-3 model in 2009 and is now producing a gasoline-powered sedan on that technology and platform in China.
As for electric vehicles, the government of Qingdao—which owns 22 percent of NEVS—has placed an order for 200 of NEVS's electric vehicles to be tested as taxis in the coastal city in northeastern China. In the future, says NEVS, it will produce both gasoline-powered vehicles and EVs in Qingdao. (BAIC also plans to produce a battery electric vehicle based on its older 9-3 platform.)
Maybe Jiang, the founder of NEVS, has good connections with the government of Qingdao and believes that will serve as a launching board for his electric vehicle in China. To be sure, the latest plan from the Chinese government does mandate that local governments will boost the number of EVs in their municipal fleets significantly.
Even if you think that will materialize, NEVS still faces the same issues as it will trying to sell a gasoline-powered vehicle in China, namely no name recognition, no distribution network, and well-established competitors. So Qingdao, not a large city by Chinese standards, might be the only government market for NEVS.
As for the consumer market, almost all of China’s domestic automakers have announced they will launch EVs. Meanwhile, foreign automakers including Nissan and Volkswagen, have said they will produce EVs in China. Says Huang of WAYS: “I don’t see any reason than an individual customer would spend money to buy a Saab EV.”
Bottom line: Saab as a brand is still dead. It is a zombie brand now.
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