BMW Bidding to Buy Saab to Bolster MINI?

Sections: Rumor Feb 22nd, 2012 17 Comments

According to Germany’s Autobilde (via Autoblog) BMW is one of 6-7 firms in the running to by the Saab brand. Why would a successful company like BMW want to own one of the most trouble automakers in recent history? We can see three reasons.

1. Front Wheel Drive

Saab’s offerings have traditionally been front wheel drive in recent history. Because of this it wouldn’t be a stretch to use the Saab brand to help gain more buying power when it comes to BMW’s upcoming front wheel drive architecture destined for both the new MINIs and BMWs. We can also imagine future Saab’s using the upcoming three cylinder engine family (the N37) as well as BMW’s N20 four cylinder in its larger cars.

We know that Saab had been working on project Phoenix which reportedly used an R56 chassis and the BMW Prince engine (the current formula for MINI’s R56). So clearly there was technical cooperation between the two. Because of this BMW knows Saab’s future plans well and a strong understanding of what they’d be getting in a sale. In fact we’d expect BMW likely has an entire proposed road map already in place (should they get the approval) to align the future Saab line-up with the next 10-15 years of BMW front wheel drive products.

2. Emerging Markets

Emerging markets of China, India and South America are huge opportunities for car companies. But it’s not just the Tata’s of the world that see potential sales. These markets represent huge growth for luxury and near luxury brands. Saab falls in the latter category but below BMW. This could allow BMW to offer a lower cost product in emerging markets like China while maintaining the prestige of the core BMW brand.

3. Manufacturing

Saab has a modern manufacturing plant in Trollhattan that could easily be made to produce everything from Saabs to even MINI and front wheel drive BMWs. For BMW additional production capacity could be key as they look to grow their own core brands into new markets throughout the world.

To make this all work for BMW it would be hard to imagine BMW not stipulating that Saab’s old debt be forgiven and not part of any deal. But there is value there if the price is right. The products (specifically the new 9-5) are relatively good and the future roadmap looked promising.

Will it happen? We’d give it a 33% chance based on all the turmoil surrounding the sale. However it’s not hard to see why BMW might be interested in the Swedish brand.

Written By: Gabe

Artur

and what is number 3?

Artur

now its fine :) anyways… interesting news but always when I read that I’m a bit afraid that MINI spirit is getting less and less important in the process…

http://twitter.com/blitzcat blitzcat

I’m not sure my heart can bear
http://twitter.com/blitzcat blitzcat

I’m not sure my heart can bear any more chapters in the SAAB story. I was a fan from years spent driving a 900, its been a wrenching roller coaster to watch SAAB the last two years. But each chapter got worse. The fans have already made their goodbyes and pulled away.

It would have been devastating to the hope and heart of the core employees who endured this far; anything ‘brand’ that springs forth at this point will be a zombie phoenix from the carrion and bones.

http://www.facebook.com/people/Mark-Smith/1742553353 Mark Smith

I think the fans still exist. Look at the Swedish government embracing Saab by buying the Saab museum. Who knows where these rare artifact peices of Swedish Automotive history would have ended up?

http://www.facebook.com/people/Mark-Smith/1742553353 Mark Smith

Oh man if this happens BMW Group is the right adopted parent for Saab. If anyone knows what to do with a flagging niche brand it is BMW group. Figure if BMW can meet more favorable economies of scale and be able to compete more thoroughly with some of its biggest competitors in the marketplace everyone will benefit. The more money they have to spend on MINI or BMW, the more creative they can get in what they can offer to sell in the way of variants and niche models. This would be a win, win scenario. I hope this comes to fruition. This would guarantee that Saab would stay true to its heritage. BMW is an expert in this area as well.

http://www.facebook.com/people/Mark-Smith/1742553353 Mark Smith

Isn’t it MINI that bought the “#Saab” name on twitter? Something is definitely afoot.
Aurel

Yes, this would indeed be very exciting. I can’t see how this would be bad for BMW. And I am sure they got some spare change lying around to make the deal stick.

Lanky

A Swedish exterior melded with German chassis and drivetrain souds like a recipe for a solid car.
Anonymous

The other point here is that SAAB had a binding agreement with BMW to purchase a certain number of engines for new products as well as the MINI Countryman platform to under pin some of their products, 9-2 to be exact so they may have an upper hand in negotiations here and should get the debt wiped clean because of that.

That said the BMW 1GT appears to be looking more and more SAAB turtle like as the cladding comes off and it seems that throwing a SAAB badge on there it would do pretty well especially one people know that BMW is behind the brand, MINI did well in some part because of that.

The big plus of SAAB as Gabe mentioned is not the name, the portfolio or any of that it is the factory, the controlled labor and tax breaks that come along with that. Sweden has been hell bent on not loosing their car producing identity (sound familiar) even though the Americans came in and killed the quirkiness that made them niche brands to begin with- BMW will foster the quirkiness and exploit it to fill holes in the BMW/MINI ranges.
Joshua

I loved my Saab Viggen … fingers crossed … I think it might be a good match …

Anonymous

Talk about torque steer! The Viggen was probably the most frightening car to those that were unaware of its character… needed to steer into the other lane when the boost let loose!

Hoover

We owned a 1997 Saab 900S. I loved the look and design. It could haul pretty much anything, great for trips. Most comfortable car I’ve owned…but…it had a GM V6 (I know…what was I thinking?). So many weird gremlins. Our dedicated Saab mechanic suggested that we get rid of the car. For all the headaches, I still miss that car. BMW engineering + Saab design=a good idea in my book. Just make sure there is a hatch in the mix.
R50

I’m all for it. As a Saab 96 owner and previous 900 owner and current Mini owner, I love the combo.
RB

The other part of the equation is GM, to produce the current 9-5 and 9-4x the bidders have to secure the ip rights with GM. Since BMW is working on a fuel cell collaboration with GM, this may help in securing the rights to the current Saab lineup.
Mendel Tomas

Remember when BMW bought Rover? Yeah, they got Mini out of it, but they ended up with egg on their face as they couldn’t make the rest of the business work. However, if their plan with the Rover acquisition was simply to get the Mini brand (which has proven very successful, obviously), then it was a good acquisition. Saab’s aeronautical origins does fit with BMW’s aeronautical origins, so you never know. I’ve been a huge Saab fan since I was 15 and had a poster on my bedroom wall of a green 1980 Saab 900 Turbo, so I really hope Saab survives.

http://www.facebook.com/people/Mark-Smith/1742553353 Mark Smith

BMW definitely does not have egg on their face from the acquisition of Rover Group back in 1994. Look at what transpired over the next few years? BMW ended up selling Land Rover/Range Rover to Ford, MG/Rover to a group of British Investors, and kept MINI. The current Range Rover HSE would not exist if it weren’t for BMW and I’m sure they didn;t lose money when they sold it to them. The sale of MG/Rover was just BMW’s way of trimming the fat from two brands that they couldn’t really do much with. Rover started the thought process and engineering of MINI to replace Mini by the time they had acquired them in 1994 and their hard work towards seeing this project through ended up being the best decision BMW could have ever made. If anyone has egg on their faces it’s Ford for trying to add Land Rover to their Premier Automotive Group which was a faliure in of itself and then the British Investors that thought they could resurrect MG/Rover very easily were sadly mistaken.

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