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November 21, 2011

Saab Brand Name to Go to China

Saab112111.pngBack in 2009 I wondered whether or not the Swedish brand Saab, the ultimate anti-brand, might ultimately get acquired by the Chinese.

Well, after many twists and turns, the brand has indeed been acquired by Chinese investors.

Chinese automakers Pang De and Youngman issued a statement that they had purchased "100% of the shares of Saab Automobile AB (Saab Automobile) and Saab Great Britain Ltd. (Saab GB) for a consideration of 100 million euros [US $134.55 million]."

It is reported that the Chinese investors are set to pump $2.7 billion into the brand, but production in Sweden could possibly disappear altogether.

The local Swedish press is wondering when a Swedish car name stops being, well, Swedish.

To many industry observers, the Saab name is almost synonymous with the Nordic country, despite the fact that GM owned it for years. It seems that "Swedish values" can be exported, and infused in cars made thousands of miles away, mainly by non-Swedes.

I would agree, not least because this buy puts Saab cars in front of the massive Chinese market and their ever-growing taste for luxury automobiles.

Said Bertil Morgen, an industry analyst in Sweden itself, "If you buy an iPhone, you know it is designed in California but made elsewhere and by the same measure, it won't be any harder for a Chinese company to retain the brand's Swedish-ness than for an American or anyone else. As long as the core values of the new cars are still Scandinavian, that is all that matters... it is largely irrelevant where it was actually put together."

Since the new owners will probably still produce the cars in Sweden for the next five years, they can still be sold as authentically Swedish.

But the comparison between Apple and Saab does make me pause.

The Apple name is owned by an American company that has its products made in China. If the name was owned by the Chinese, would it be as sweet to computer buyers? We have all seen the little disclaimer on Apple packaging saying that the product was "designed" in Cupertino... but the fact that it was made in China is harder for the average buyer to uncover.

Still, so many iconic car brands are moving away from their country of origin (Land Rover to Tata in India, Volvo to China), that it seems pretty clear that the modern consumer really won't care who builds what where.

How the brand name is positioned is everything.

Can a Chinese firm make Swedish cars? Sure. How do I know? Because Saab lovers all over the world are rejoicing today.

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Posted by William Lozito at November 21, 2011 8:03 AM
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