So, the Swedish car industry has been cut in half by the death of Saab, has it? That’s what I’ve been reading in various places. And it’s easy to see why: Saab and Volvo are globally iconic brands, and the only two Swedish car makers anybody’s really heard of.
Not only that, they do have some stirring similarities. They are headquartered just 50 miles apart (Saab in Trollhättan, Volvo in Gothenburg), and they were both part of giant Swedish truck makers – with strong aeronautical interests – before being sold to American multinationals (Volvo to Ford, Saab to GM). Neither of them, of course, prospered under American rule.
Saab vs Volvo: the differences
But the two companies are very different. Volvo was founded in 1927, Saab not for another 20 years. And Volvo was a much, much bigger company. When Ford bought it in 1999 it paid a staggering (and admittedly inflated) $6.45bn, yet ten years earlier GM paid just $600m for a 50% stake in Saab, and in 2000 forked out an extra $125m to take the whole shooting match.
Volvo has 20,000 employees, Saab at the death had 3500. In 2010 Volvo produced 375,000 cars, Saab in its final year managed just 32,000. And Saab’s $940m turnover was dwarfed by the $16.7bn generated by Volvo annually.
China – the powerhouse deciding the future of Sweden’s car industry
Ultimately, the Chinese seemed to hold the key to the future of the Swedish car industry. First Geely bought Volvo and secured its future, then Youngman and Pang Da seemed poised to do the same for Saab. But GM, which had sold Saab to Victor Muller, scuppered the rescue by invoking a clause which forbade any deal which gave the Chinese access to its patented technology.
The body of Sweden’s car industry thus hasn’t exactly been cut in half. But it has certainly lost its right arm.
Thanks to Gavin Green, who did all the hard work