Saab Cars: Born From Jets
It's easy to find the cars of Volvo, BMW, Jaguar and more on the roads today. But have you ever heard of Saab?
The birth of this company is closely tied to that of jet aircrafts. In 1950, two brothers who were military aircraft designers decided they could make a car too. They designed their first prototype in 1954 with contributions from other prominent Swedish car engineers such as Hans Henrik Paalsson and Gunnar Ljungström. The idea was that if jet engines could create enough power for fighter planes, why not for a family car!
Eventually, their work got big enough to be taken seriously so they started the new Saab Automobile Company in Sweden in 1947.
In the beginning, the company was not that successful. But in 1956, Saab came out with their first car called 'The 92'. The company sold all 500 of them but soon needed more cash to keep going. They asked local banks to loan them money but were turned down each time.
Finally, a bank called Nordbanken gave them a loan on the condition that they could find a new partner for financial strength and production experience.
In 1957, Bullman Petroleum (owned by the Swedish government), and Lars-Erikhjelm Lundqvist. 'Bullman' decided to put 25,000 Kronor of his own money into Saab as well.
At first, they weren't sure whether they could do it all on their own. But at that time Sweden was in a very difficult economic position. The government had less and less money to give out. So the businessmen who owned Saab were encouraged to sell their stakes in the company for cash to keep it going until better times came along for them as well.
When the company's first car came out in 1956, it was called 'The 92'. It was a small 2- door car with a small engine and a roof made of fiberglass. It came out of an idea that was very common back in the 50s. Many people in Sweden thought it was very cool to drive around in a car that they could park anywhere!
Over time, Saab would sell more and more cars so they decided to join the big club of inventing new things to suit their needs.
In 1957, Saab joined the new European Treaty on Environmental Quality and became required by law to make their cars more fuel efficient. They invested in research and testing facilities at different sites such as one in Goteborg, Sweden that tested combustion engines.
By the end of the 1960s, all Saab models sold over 100,000 cars per year.
But their troubles didn't end there. The oil crisis of 1973 put a big dent in their progress. In the early 1970s, The British Petroleum (BP) owned General Motors signed a contract with Saab to produce and sell GM brand-name cars in Europe. This made GM more powerful and wealthier and put 'Saab' at a serious disadvantage as they could not compete on price.
Slowly, Saab limped along until changing both the name and ownership of their company. In 1989, they changed their name to Saab Automobile AB and in 1990 they were owned by Dutch Automaker, Spyker.
They made a profit but struggled to keep going in 1992, however they didn't give up. General Motors (GM) bought all of Spyker's shares in Saab Motor Compagny and became their sole owner. GM invested more money into the company which was now competing against VW for second place in the European market after Toyota. This relationship did very little for either company and GM sold out to another company called Investor AB from Sweden in 2000.
Saab continued limping along until 2004 when they produced their last car and had to declare bankruptcy. Then in early 2005, GM sold their shares to Swedish Investment Firm, National Electric Vehicle Sweden (NEVS).
They got some huge cash for this and began again with a new design. The car was called the 9-3. It has been called Mean Green by fans who have worked on it since its birth from a solid block of steel in 1988. There have been improvements made over time and it is one of the most popular cars in the country today. It beat out many five star luxury cars so far and is still one of the best selling cars on the market today.
The Saab car was born a fighter jet and has now become one of the best selling cars in Europe. It is still a world leader in safety technology. Today Saab is a powerful brand that most people don't know about but has many loyal customers. And they are ready to fight for their company if anyone tries to take it away from them again!
Credits: https://saabstory.com/
http://www.saab-story.com/1948-to-1956/
https://en.wikipedia.org/wiki/Saab
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https://www.forbes.com/profile/jennifer-spyker
https://en.wikipedia.org/wiki/Saab_(automobile)
http://www.saab91club.co.uk/saab_history_2a_1948-80_saab_story_taken
http://en.wikipedia.org/wiki/Saab_(car)
http://www.youtube .com/watch?v=L-jZztvPEuc
http://www.caranddriver.com/features/saab-9-3x-coupe-1992-saab_story
http://en.wikipedia.org/wiki/Saab_872
https://en.wikipedia.org/wiki/Saab_900
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Conclusion
Author's opinions
From the case study, the Saab Automobile Company had lots of challenges when they first started in 1948. It took almost 20 years for them to get their first success and it was not until 1989 that they started to improve their company's standing. Through many partnerships and different owners, Saab had finally made a profit for 18 years since 2004. Saab has been a reliable and competitive car manufacturer despite going through some great financial difficulties (Saab History).
I enjoyed reading this case study because I have previously studied most of the theories discussed in this report such as 'New Institutional Economics'...