As reported, Saab will set up shop in Qingdao with a plan to produce 400,000 units annually. The new venture aims to sell loads of EVs to government departments and taxi companies. National Electric Vehicle Sweden (NEVS) is the owner of the Saab brand (but not the Griffin logo, see new logo here). Plans for a new electric model have already been unveiled. CEO of NEVS is Swedish businessman Johan Kai Jiang (Chinese name Jiang Dalong). The excerpts of an interview with Jiang that appeared in the Auto Business newspaper can be found in full in English on ChinaAutoWeb.com.
Why choose Qingdao, Shandong as the Chinese home of Saab?
After the acquisition of Saab, many Chinese cities became interested in me, in Saab. Some in coastal areas sent teams to me, seeking partnership. They made generous offers, including money and tax benefits…When the Qingdao team came, however, they did not start by talking about preferential policies, but their leadership’s ability for innovation, their longing for a local auto industry and plans for the future.
Qingdao provides an opportunity for me to help Shandong, where I have my origins, fulfill a dream. I was told that officials of Qingdao for long had a strong interest in sedan-building. At present, the city has a well-developed auto parts industry, serving various vehicle brands based in Europe, America, or Japan. What’s more, before the end of 2012, Qingdao acquired the qualification for having a whole-vehicle import port and completed integrating resources for the new Huangdao District. For Saab looking to create a Chinese production capacity, this is a rare opportunity not to be missed.
Shandong province is a leader in the Chinese economy, and yet has no locally-based sedan-making ventures. Qingdao, a key city in Shandong, has tried unsuccessfully before (to set up one). It is not fitting for Shandong and Qingdao, which have advanced economies, not to have a sedan-making capacity.
Qingdao is faithfully fulfilling the promises it made in earlier talks with us, which concern setting up a whole-vehicle import port and an economic zone along the west coast. This is the style of the Shandong people. They are reliable, always keeping their word.
Some say that Qingbo paid 2 billion Yuan for 22% of NEVS. Is this true?
The figure of 22% is accurate. To be more precise, it was through a capital increase that Qingbo acquired a 22% stake in NEVS. The stake’s price actually exceeded 2 billion Yuan. The exact amount is a commercial secret.
What Saab models will be built in Qingdao? Is the plan to roll out 400,000 Saab cars a year in Qingdao over-ambitious?
Some claim that the 9-3 is outdated. The truth is, since 2005 Saab engineers have continued the R&D based on the 9-3, although for various reasons, we have not fully realized the development results. Thus for me, 9-3 is just a codename. There will be all-new 9-3s in the future.
We will soon finish the development of the Phoenix platform. Based on this flexible platform, we will unveil a line of new Saab models. Shandong alone has a market ten times that of Sweden. China as a whole holds much greater potential. With a proper marketing approach, the planned production capacity will be fully matched by demand.
We will try to win government procurements and build cars that meet the standard for government-employed vehicles. In particular, we will target government cars, traditional or electric, that have a price tag below 180,000 Yuan and an engine displacement below 1.8L. We will also take aim at taxi fleets in Shandong.
Production cost, product quality, and pricing are three crucial factors. Many (who are skeptical about the project) overlooked two things. First, high tariffs and taxes were the fundamental cause of the high pricing of Saabs in China. Second, Saab used to rely on some small parts-suppliers, some of them even serving only Saab; these suppliers were often underfunded on R&D, unable to upgrade their products timely or control costs effectively….
By contrast, there are companies in China that provide excellent parts and services, which really surprised me. Some of them do a better job than their overseas rivals…. If Saab can overhaul its supplier system and employ more local parts, its prices will be lowered to a range attracting ordinary consumers.
What’s Jiang’s response to the wide skepticism about NEVS’ plan to save Saab?
I understand that there is a lot of skepticism out there. Some say I am just a show maker, which I am not.
Ten years ago, people said I was show-making in promoting the technology that generates electricity through burning crop straws. I spent ten years proving the value of this technology. Similarly, I can use ten years to prove the value of Saab and build Saab into the most successful auto brand.
In making the transition, Saab has little burden, with its debts settled and employees compensated. The bankruptcy is more like a challenge, a unique growth opportunity.
Johan Kai Jiang Interview on ChinaAutoWeb.com