by: George Achorn

Market conditions weighing on the auto industry today are like likely nothing anyone currently working in it has ever seen. It’s no Great Depression… yet… but the free fall of sales, harder-and-harder to get car loans for consumers and a spooked population doesn’t make it easy to sell cars. Worse yet, a short-sighted voter base in the USA seems quick to pooh-pooh the idea of much-needed tens of billions of dollars in loans to the auto industry following trillions dumped into the banking industry with little oversight and or success. In the midst of this, General Motors is doing everything and anything it can to survive and Saab is very much ‘under review’ – either on the chopping block or the auction block. Where could this all lead? Here are a few theories we’ve come up with – scenarios that could paint a rose-colored future for Saab that have a chance based on market intel we’ve heard.

Given the magnitude of what’s going on, reading the tea leaves and the news wires, our guess is that neither the Swedish government nor the market will let Saab slip away into history. What Saab is, along with its rival Volvo and several of its GM portfolio siblings, is a major deal for anyone looking to get into the auto industry or expand their portfolio. If Renault’s scrappy takeover of giant(er) Nissan looked uppity, the opportunity here for a company to grab a piece of the market is even more outrageous… and very much a reality. That leads us to our first scenario.


Scenario #1 – OE Supplier Gets Shoe-in-Door with Saab, Opel, Vauxhall & Saturn
Saab boss Jan-Ake Jonsson commented Wednesday to Swedish Public Radio about the potential for a sale of Saab by GM. While most imagine a car manufacturer grabbing the brand, Jonsson’s comments point toward something else. "There are many interested parties. I don't want to mention any specific names but there are many (interested) companies that work with development and support car production, both in Europe and outside of Europe," the executive stated.

Read between the lines and an OE supplier or the like is also in the running. The move would be a power play in a fashion similar to Cerebrus and Chrysler, but would move a company already instrumental to the car industry into the role of manufacturer and greatly change or expand their position within the supply chain. The downside to this… even with its own factories, facilities and dealer network, it’s hard to imagine someone stepping in and buying solely Saab. However, package Saab with another brand or two and the deal makes more sense.

GM made no mention of its German unit Opel on Tuesday when it outlined its plan for progression. While the General did mention HUMMER, Saab, Saturn and even Pontiac by name in regards to strategic reviews, the name of its profitable German marque did not make the list. However, Opel’s close ties to Saab in shared architecture and both Saturn and Vauxhall in design and product make it an attractive addition.

There’s a lot to like about this grouping of four brands. Not all are money losers, sweetening the offering from a financial standpoint. Also, the grouping has design, R&D and production facilities in place. Packaging Saturn into the deal would also net a stand alone dealer network since Saturn pushed that concept from inception, and Saturn even has their Spring Hill production facility that could offer the new company domestic production.

What this would mean for Saab would be survival and continuation as planned. The 9-4x on GM’s Theta platform might require some sort of operating partnership, but 9-5 and 9-3 are all more closely akin to Opel.

For Saab's 231 existing U.S. dealers, this would be a bit of a mess. GM has been moving Saab dealerships to pair with Cadillac stores. Likely Saab would be yanked once more, though they could be theoretically sharing space in Saturn's 425 outlets – an odd coupling to be sure, but Saturn’s cache could go up even further as it gets more closely aligned with Opel/Vauxhall.


Scenario #2: Enter the BMW Group
We’d heard whispers from our own contacts within the industry that BMW had been window shopping prior to the real financial downturn. By window-shopping we mean touring facilities and taking a close look at books. Saab wasn’t our source for the intel, but BMW’s consideration of Saab makes sense given what we know.

The rumor goes that BMW is seeking a brand to fit in its portfolio with a green, environmentally-friendly flavor. Saab’s BioPower sub-brand has gained prominence, though it has no hybrid technology yet. Still, it would be an attractive candidate for even more reasons and there’s also the BMW cooperation with GM on hybrid development.

First in our minds is market position. Where other marques on the block like Volvo have a range that competes more directly with BMW’s own, Saab slots nicely below the BMW brand portfolio. The next 9-5 is a competitively priced sedan sized between 3-series and 5-series. The next 9-3 is smaller still – think 1-series…. ish, but at a cheaper purchase point.

What would this mean for Saab? On the macro scale, this would be a good move as we see it. BMW is one of the best brand stewards in the market. MINI and Rolls-Royce, while limited in product scope and positioning, have been incredibly well received. BMW knows how to tap into a brand’s core values and build upon that. That their engineering is some of the best in the industry and their technologies, chassis and component sets are some of the most respected doesn’t hurt either.

Practically speaking, we’d imagine 9-4x, 9-5 and 9-3 to continue in cooperation with GM’s Opel unit. Eventually, Saabs would be moved to BMW-engineered component sets and BMW Group-developed powerplants. You can imagine there’d be plenty of sharing between Saab and the front-wheel drive MINI product line.

From a distribution standpoint in the USA, there’d again be a bit of a mess. Saab’s pairing with Cadillac and HUMMER in America would likely be split. However, BMW has shown they can do much with little as they have with MINI distribution. Moreso, while neither MINI nor Saab are high-volume brands, a pairing of the two in one dealership network would be much more natural to consumers than the marriage of the Swedes with HUMMER and Cadillac.

In Closing…
We can’t reiterate this enough. The theories published above are solely based on the imaginations of our own staff, knowledge of market conditions and factors of which we’re aware. They are not, in any way, based on any intel we’ve gotten from the industry other than our knowledge of BMW’s ‘looking around’ months ago.

It is interesting to consider the alternatives should GM go for a sell-off. The General's made no mention of moving its Opel unit out of the portfolio, though this could be one way to move both Saab and Saturn - the latter of which essentially sells re-branded Opels in the USA now. If the sale is to an OE supplier or a non-automaker, the Opel/Saab/Saturn unit would be an attractive one. If Saab were to go say... to BMW, who is looking for a 'green brand' to add to its portfolio, then that too would make for an interesting new chapter in the Saab history books. Then again, perhaps GM will be able to pull through all of this and Saab will remain. Regardless, it is a very interesting and challenging time to ponder the future of Saab.