Special Coverage

Paris
Auto Show

PARIS – Saab Automobiles AB might as well adopt the motto of its new owner, Spyker Cars N.V. “For the tenacious, no road is impassable.”

Last year, loyal Saab workers were hoping for the best but preparing for the worst, after negotiations to buy the subsidiary between then-owner General Motors Corp. and Swedish supercar maker Koenigsegg Group AB fell apart.

In February, GM accepted Spyker’s $74 million offer, and Saab once again had a future. Now, seven months later, instead of a mothballed factory in Trollhattan, Sweden, Saab has a new 9-5 on the road, the Swedish brand’s first new car in nearly a decade.

It also has a new 9-3 under development for launch in October 2012, as well as a new version of the 92 small car aimed at attracting younger buyers to the brand. Additionally, Saab plans to have 70 battery-powered 9-3s undergoing fleet testing next spring.

Also in the works is a new joint venture with American Axle Mfg. Holdings Inc. to develop and commercialize electric all-wheel-drive and hybrid-driveline systems; as well as a deal to buy some 200,000 1.6L turbocharged direct-injection 4-cyl. gasoline engines from BMW AG. Saab also is talking to BMW about sharing other components or even platforms.

Saab Chairman Victor Muller and CEO Jan Ake Jonsson expect the auto maker to produce 45,000 9-3 and 9-5 cars this year, 80,000 in 2011 and 120,000 in 2012.

Traditionally, Saab built 120,000-130,000 cars annually, says Muller, so with the 9-4X coming next year and the 9-3 in 2012, the auto maker should return to that output level.

But what of the common wisdom GM never made a profit from Saab in 20 years with such low volume?

“Do you ever watch ‘Myth Busters’?” asks Muller. “It’s a myth that they never made a penny. It’s not true, but the myth will probably be around forever.”

Under GM’s accounting measures, Muller says, Saab’s contribution was limited to its factory in Trollhattan, a plant sized for annual capacity of 190,000 units, but making far less.

He says Saab has gone back over its books of the past 10 years, looking at the pieces that make up the company as it is today, including 23 sales subsidiaries.

“Saab was profitable,” he says. And now that the auto maker has reduced its factory capacity, breakeven will fall to 105,000 units next year, and 80,000-85,000 when the 9-3 and 9-5 are both in full production.

As Muller expects Saab to sell 130,000 cars annually, even before the 92 joins the lineup, he counts on earning enough of a profit to repay loans from the European Investment Bank and Russian businessman Vladimir Antonov used to help buy Saab.

While the new 9-5 shares architecture with the Opel Insignia, 70% of the parts, “everything the customer sees and touches,” is unique to Saab, says chief engineer Mats Fagerhag.

In addition, he says, Saab engineers developed some parts of the vehicle’s chassis, including the front and rear up-level suspensions and the all-wheel-drive system. So if an AWD 9-5 is ordered with the premium suspension, the Saab content rises to about 90%.

Fagerhag says GM gave Saab engineers more freedom on this car than most projects over the years, with only a few areas compromised to meet global platform priorities. For example, since the platform will be used for vehicles in China, some stamped parts had to be made with the quality of steel available in China, instead of higher-strength steel Saab could have used to save 55 lbs. (25 kg) in weight.

“The 9-3 will be all Saab,” Fagerhag says proudly. Engines will be outsourced, but that makes the engine maker a supplier and Saab the customer.

“We want one family of gasoline engines, and one family of diesels,” says Fagerhag. The gasoline engine will be BMW’s 1.6L making 200 hp and 161 lb.-ft. (218 Nm) of torque and produced at BMW’s Hams Hall Mini engine plant in the U.K.

The mill is of the same family as the PSA Peugeot Citroen-BMW 1.6L engines but is not shared with the French auto maker. Fiat Automobiles SpA currently supplies diesels for the 9-3, but PSA is trying to sell its technology to Saab.

Negotiations regarding the BMW engine deal began in May 2009 during talks with Koenigsberg to buy Saab, says Kjell ac Bergstrom, president of Saab Automobile Powertrain AB.

The engine is Euro-5 emissions compliant, but Saab and BMW will have to work on making it ready for Euro 6 standards, says Bergstrom, and they may end up with different approaches.

In addition, Saab wants to make the engine able to run on E85 fuel popular in Sweden.

The deal with AAM came about because Saab engineers did AWD engineering for all of GM and, thus, had a large team with expertise available.

“Our mechanical AWD is the best you can find, but the problem is that it adds mass,” says Fagerhag. “It is a very high-tech system and it enhances performance and safety.

“I told my team I wanted one as good as the mechanical one that doesn’t add mass. They came up with a system that uses two electric motors, one big and one small. It’s excellent, but we needed a partner. This will be as good as the existing system, and will conserve fuel.”

The general idea is the same as that at PSA. An electric motor drives the rear axle, and the internal-combustion engine the front wheels. Engineering details will be revealed later, but Fagerhag says the system is smaller than PSA’s technology.

“We have a different business model; we want to cooperate with others,” he says. “We go to suppliers (and say), ‘We have a midsized car, we want a door latch that will meet global requirements. What do you have?’

“Maybe they have one for another OEM. They need approval from the OEM to sell it to us, but it usually happens.”