Beijing Auto Confident About its Saab Based Cars

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Saab reached a strategic partnership deal with Hawtai on May 3, which made the industry insiders worry about Beijing auto Industry Corp (BAIC) as BAIC previously acquired some core technologies from Saab in 2009 and is developing its self-owned products with these older technologies. However, the strategic partnership between Hawtai and Spyker broke just nine days later. The industry is thus curious about the possibly moves of BAIC.

Dong Haiyang, BAIC’s vice president, said that the company was glad to see Saab’s success in finding a new partner. As to the outside speculations over BAIC’s possible involvement in partnering with Saab brand, Mr. Dong clarified that BAIC aims to develop a self-owned “Beijing” brand rather than a “Saab” brand with a foreign partner.

Whether to acquire Saab brand should be determined based on whether it goes with BAIC’s strategy for the development of self-owned brand, said Mr. Dong. A company should know what it wants to get before conducting an acquisition. After BAIC Group decided to develop its self-owned brand, it has acquired powertrain system, engine, transmission, and mature chassis technologies, as well as complete manufacturing system and quality assurance system.

BAIC has acquired Saab’s core technology systems, and the previous acquisition is a complete business behavior. “I think the acquisition is over already,” said Mr. Dong.

As to the reports saying Wang Dazong, general manager of BAIC who was once responsible for Saab assets acquisition project, flew to US to contact with Spyker’s president Mr. Muller, Mr. Dong said that it’s the first time he heard of the news. As to Mr. Wang’s words during an interview that BAIC Group has the preferential right to acquire Saab brand, Mr. Dong believed it might be out of certain context.

However, Mr. Dong also believed that no matter the words were out of whatever circumstances, Wang Dazong’s reflection over the matter represents not only his own opinion, but also BAIC Group’s will.

According to the previous agreement inked between BAIC and Saab, many former Saab employees will be dispatched to BAIC for exchanges and cooperation. It could be figured out that the contract cooperation between the two parties is quite deep. As to the future development of their cooperation, Mr. Dong said anything could be possible.

On the same day when Hawtai and Spyker announced their breakup, Sohu.com, a news portal in China, exposed the latest catalog of fuel-efficient vehicles to be launched, which included three products of Saab’s new 9-5. Saab’s faster than expected return to China, albeit via the import market into China also made the industry worry about the market prospect of BAIC’s self-owned brand.

However, Mr. Dong is quite optimistic about this. He thinks the impact will be good ones if there is any. In Chinese market, there are many products with same technological origins, and the fact could enhance consumer’s understanding of the brand’s technologies. Although BAIC’s self-developed products has the same technology as Saab, its brand positioning is different. Saab’s imported vehicles may target at the elites or a small group of consumers, which is quite different from BAIC’s self-owned brand, covering from A-class to C-class products.

BAIC’s technology support for the development of its self-owned products is from the acquired old Saab 9-5, 9-3 models and technology platform. Mr. Dong believed that the main difference between BAIC’s self-developed products and imported Saab cars will be in the exterior, and they have the same turbo-charging technology, handling performance, and high-speed stability. Besides, BAIC has acquired Saab’s core IP rights for 2.0T and 2.3T engines.

According to Mr. Dong, after the company’s acquisition of Saab assets, BAIC has absorbed the latter’s technologies and made some innovations to the platforms under the philosophy – “From Saab, Better than Saab”.

“New things may not be good things,” said Mr. Dong. BAIC’s self-owned products, ranging from A class to C class, will all target at the mass market, while the key feature of volume-leading products is the technology maturity.

According to Mr. Dong, BAIC has many advantages in developing its self-owned brand. It has Saab’s brand content, chassis and powertrain system, and technology advantages in manufacturing. Besides, it can learn from the peer’s experiences as a latecomer to develop a self-owned brand. It can make use of the talent overflow and management overflow of the group’s joint venture to build the brand. Its products will be designed to be price-competitive.

These may be the reasons why Mr. Dong believes BAIC does not need to acquire Saab brand and is not afraid of the technology pressure from imported Saab cars.