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Wednesday, May 11, 2011

Saab Boss Victor Muller: Says Buyers Won’t Care about Safety

The ink on the deal / partnership between Saab and China’s Hawtai Motor Group has barely dried, but the Swedish automaker's chairman and Spyker CEO, Victor Muller is already making headlines again by hinting at the distribution of cheap Chinese cars in the United States, Europe and elsewhere through Saab’s established global network.
"We laughed when the Japanese came. We laughed when the Koreans came. But we will not be laughing when the Chinese come. The Chinese are like a steamroller,” said Victor Muller, during a press event in Washington, D.C.
Muller said that if an agreement is reached with Hawtai, the Chinese maker could make use of Saab’s distribution network to sell its cars globally.
"It took 67 years to build up our dealer network. It is the biggest asset not on our asset sheet, and these guys buy into it for free. If they make the proper cars, can you image how much simpler it will be to push product through the distribution network that is already there? It is like a railway network that is already there," said Muller.
The Saab chairman added that the Swedish company could help distribute a low-cost Chinese vehicle priced for around $10,000 (about €7,000 at today’s exchange rates). When asked if this vehicle would be produced by Hawtai, Muller said: "There are 120 companies in China. Saab would be interested in the one with a strategy".
And given that all previous attempts from China to conquer Europe have failed miserably for a great number of reasons, one of the most important being the lack of safety, Muller commented on the matter, and his answer will certainly raise a few eyebrows.
“In China, you can get a $10,000 SUV with air conditioning and electric windows, everything that was ever invented for a car. Do you really worry about a five-star (crash rating)? They look good," said Muller.
Muller’s comment on the safety issue comes to as a surprise, especially since he heads a company that has a top reputation for safety. One would expect Muller to say that Saab would offer its expertise to its Chinese partner so it can improve the safety of their cars, and not rely solely on rock-bottom prices to achieve sales.
Also, let’s not forget that Chinese automakers' low cost strategy has failed miserably in the past in Europe for a very simple reason; there’s no incentive whatsoever in buying a cheap Chinese car with technology from the time legwarmers worn over jeans and three-quarter sleeves were considered cool, when you can buy a far more advanced and possibly reliable used vehicle from an established automaker for the same or even less money.
That’s even more the case in the U.S. were used (and new) car prices are much lower than across the pond. Now, if Chinese makers were to improve their vehicles without pushing prices too high, that's another story entirely.


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