The question appears simple and the answer easy. Who killed Saab? General Motors is the easiest to blame for the demise of the Swedish automaker.
After Spyker took over SAAB from GM and it failed in the end, it was easy to point the finger to Victor Muller. Mr. Muller’s goal to bring the brand back to its roots was admirable. But in the end, he could not save Saab either.
One group of Saab enthusiast thought Muller was all talk without the funds to back it up. Others admired his tenacity and big dreams to make Saab a successful company that produces great cars again. Either way, he was one of the few who saw the possibilities and had a real passion for the brand, the company and the cars.
It was too bad the Swedish government and many Swedes didn’t seem to care too much if Saab would live or die. It is easy to understand the government did not want to get involved with business but a company like Saab should be considered cultural heritage. It also supplied jobs to many people at Saab and its suppliers. When these great companies like Saab are gone, they will not be coming back.
To get back to the original question, there isn’t one single easy answer but it was a combination of events that ultimately killed Saab Automobile. Globalization of the automotive business is unstoppable and there doesn’t seem to be room for small manufacturers like Saab anymore.
Matthias Holweg and Nick Oliver from the United Kingdom wrote a research paper where they analyzed the company and explain how there ultimately was no possibility for Saab Automobile to survive. You may not have heard of these gentlemen before but they have credentials that certainly make them qualified to give an informed and unbiased explanation of the great story of Saab.
Below is an introduction to their research. The full document is 40 pages long so sit back and enjoy. It is very well written and, in my opinion, the best research and explanation in existence about the life and end of Saab Automobile.
Matthias Holweg is Reader in Operations Management and Director of Research at Judge Business School, University of Cambridge, UK. He also is a visiting researcher at Chalmers University, Sweden.
Nick Oliver is Professor of Management and Head of the University of Edinburgh Business School, Edinburgh, UK. He is also a fellow at Judge Business School, University of Cambridge.
Saab Automobile AB was declared bankrupt on December 19, 2011. This marked the end of 62 years of car production for the iconic brand, which during its final years was beset with financial problems and changes of ownership. More than 3,700 workers lost their jobs when the Trollhättan factory finally closed its doors after producing a total of 4.5 million Saab vehicles over the years. But what was the root cause for the company’s demise? Was it preventable? And who was to blame?
The failure of Saab was ultimately a market-constrained failure. While Saab enjoyed loyal customers and a history of distinctive and innovative products, its operations were subscale and the segment in which Saab operated gave it insufficient room to grow given the strength of its competitors. With production never exceeding 150,000 units per annum, the niche that Saab occupied was too small to sustain its operations at the prices its products were able to command.
In its final years, Saab produced the same volumes as Porsche, yet was competing with Audi who not only had almost ten times Saab’s volumes but also benefited from well-executed platform-sharing and economies of scale within the Volkswagen Group. In simple terms Saab had the worst of both worlds – Porsche volumes with Audi prices. This was not sustainable.
What do you think killed Saab? Please share your thoughts in the comments below.