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SAAB announce historic deal with BMW

Those believing that SAAB-Spyker were content to sit on their laurels after the successful launch of the new SAAB 9-5 are likely to be surprised by last week’s developments that demonstrate serious intent to develop the brand.  The maxim ‘a new broom sweeps clean’ is particularly apt for describing SAAB chairman Victor Muller, a man whose infectious enthusiasm inspires all those around him and an avalanche of new ideas was never anything less than inevitable.  Even so, ability to translate these ideas into reality was always going to be tempered by the ability to finance them and whilst the rumour mill has been in overdrive mode recently, a cautious attitude has been adopted even by SAAB enthusiasts to the many and diverse suggestions that have appeared in the media.

SAAB Chief Jan Ake Jonsson, CEO Victor Muller and Ian Robertson (BMW) unveil the deal at last week's press conference

Sceptics and business analysts doubting the ability of the company to survive without the umbrella support of former parent company GM, however, may need to think again after today’s announcement that sees a deal forged with leading German prestige car maker BMW.  Those ‘in the know’ forecast developments with the announcement of a press conference scheduled for September 29th 2010.  Sources consulted about the likely content of any forthcoming press release remained tight-lipped but it was an open secret that BMW were attending the conference.

At the heart of the conference was the announcement that SAAB-Spyker have formalised an agreement with BMW that will see the German manufacturer supply SAAB with (initially) 200,000 1.6 litre turbo charged N18 engines, primarily for use in the forthcoming 9-3 replacement, due in 2012.  These engines, it transpires, will be manufactured within the United Kingdom at BMW's Ham's Hall facility.

This bold initiative represents a major step in revitalising SAAB because many feared that without GM patronage, the marque would founder and fade away.  Now, with the support of a leading manufacturer, renowned for ‘cutting edge performance’, SAAB has allied itself to one of the world’s best known brands.  Whereas BMW have made no secret of their willingness to supply engines to third parties in the past, the fact that any agreement could be reached surely demonstrates that SAAB is here to stay and that other makers believe in the brand.

The market response has been overwhelmingly positive too, with Spyker shares jumping over 35% today.  Whether this optimism will continue depends upon further announcements expected in the near future but it seems likely that even if BMW and SAAB do not release details of further collaboration soon, it remains a distinct possibility because sourcing one petrol engine begs the question about diesel units that are likely to form the backbone of future sales.

SAAB purists may wince but to do so is to deny SAAB heritage: the 95 and 96, for instance, used a V4 unit sourced from Ford (Germany) and everybody knows that the legendary 4 cylinder turbo charged engines are evolutionary developments of a Triumph design. More recently, 9000s, NG900s and 9-5s have made use of GM's 2.5 and 3.0 litre V6 petrol engines, so buying in engine technology is established practice. It is also sound business sense because there simply isn't a large enough budget to sustain a new engine development program given the production numbers that would actually use it.

In turning to BMW, SAAB have surely made a crucial first step away from dependency upon purely GM technology toward a brighter future partnership with one of the foremost car producers in the world. Although sourcing a premium quality powerplant is a sensible move in itself, the real significance is that SAAB have been able to forge an agreement that is not tied down with restrictive clauses and SAAB will be able to tune and adapt the engine in a way that was not possible with GM sourced powerplants. From the German company's perspective, the deal fits the master plan as it is known that BMW has been seeking to increase income by selling BMW parts and technology to other manufacturers. Ultimately, although the SAAB-BMW deal may raise a few eyebrows, such deals between makers may become more common in the future. Indeed, Ford USA and Peugeot Citroen (PSA) have been collaborating in the manufacture of diesel engines for more than a decade and most recently, both makers announced that they were to commit 300 million Euros to a new program to develop engines that would satisfy forthcoming stricter Euro 6 emission regulations.

Other SAAB related news for Autumn 2010
Although the deal with BMW forms the front line news from SAAB this month, that is far from being the full story. Apart from Victor Muller receiving the 'Entrepreneur of the year award for his achievements from 'Automotive News' in Paris on September 30th, here are a couple of interesting snippets:

Lower exhaust emissions for 9-3s
It has been announced that the 9-3 Sport Saloon's TTiD engine is now more environmentally-friendly than ever before, producing only 119g of Carbon dioxide per km. This is impressive in its own right but factor in the economy and performance potential here to appreciate that the engine is at the cutting edge of efficiency.

Following much work by SAAB engineers, it seems that all models in the 9-3 range have benefited from as much as a 12% reduction in CO2 emissions but this is significant (in the case of the TTiD) because 119g just slips into the cheaper taxation band (from 120g) that applies in many European markets.

Electric version of the 9-3 unveiled at Paris Auto show
The SAAB ePower, an electric version of the 9-3 that is the product of a partnership between the Swedish manufacturer and Boston Power has been shown at the Paris Auto show. This is a venture to produce a true zero-emission vehicle but with significantly greater range and better performance than existing offerings produced by rivals. Of course, those of us with long memories recall that late last year, as the future of the company looked uncertain, SAAB announced its intent to build as many as 100 electric cars during 2010, so it is good to see that this has not been shelved. Although the ePower cannot be bought from a showroom, 70 cars will be tested extensively in Sweden next year and the exercise should be seen as a large scale experiment that is a major step towards bringing a future electric car to full production.

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