Nordic Reach and Nordstjernan sat down with Jan Åke Jonsson, CEO and President of Saab cars to talk about the future of Saab, cars and the environment.
Consumer interest in cleaner and greener auto technology is exploding, even in the United States. From fuel cells to plug-in hybrids, the industry is showing more research and development zeal than at any time since the golden days of 1900, when gasoline, steam and electric vehicles (EV’s) competed in the marketplace. This spring’s car salon in Geneva, Switzerland was greener than ever, and one manufacturer dominated the headlines for its BioPower engines: Saab Cars of Sweden. These days wholly owned by GM, Saab introduced yet another BioPower model—the 9-3 production car—now available with a flex-fuel engine which runs on regular gas or gas with an 85% ethanol content. But the star and talk of the show, the car that became the favorite image for major European news media was the Saab 9-5 concept car, optimized to run on pure bioethanol (E100) fuel. Run with bioethanol, Saab turbocharged engines create a whopping 300 hp from its 2.0-liter engine, all with substantially reduced CO2 emissions. Wherever you looked, BioPower and Saab’s new concept car became the symbol for this year’s wave of environmental concerns among consumers, politicians and automakers.
“It feels good to finally be in the limelight again, to have the absolute right models and technical solutions in place at the right time,” said Jan Åke Jonsson, CEO of Saab.
The Swedish manufacturer has for many years been the choice of the independent souls, the choice of those who not only value security and responsible driving but design and performance…these days of the right kind. In Europe, Saab is first and foremost also the choice for more environmentally correct performance. Saab drivers leave a smaller CO2 footprint, and yet, receive a lot of muscle in their cars. More performance at less cost for nature…an oxymoron? Hardly. For Saab, which started developing turbo-driven engines with lower cylinder volumes before everyone else, the connection is a natural: BioPower in the form of cars fueled by ethanol mixes of 85%, sometimes now even 100%, brings more horsepower to less cylinder volume. “It’s natural and it’s a natural for us,” said Jonsson, CEO of the formerly fledgling Swedish car company. “The effect you get from any given engine is the result of the efficiency of the mix of air and fuel, optimized by our turbo engines. More air to a given volume of fuel brings less emissions but also more power to the car.”
Whatever you feel about which cleaner technology to use—the now oh-so-popular hybrids, diesel engines, biodiesel or what many consider the ultimate future: fuel cells—most of them do have a problem. They either, consume more energy and adversely affect the environment in the production process, or they are simply not available at the right price point. The technology behind BioPower is not necessarily smarter or better or less polluting in the long run, but it is here, now, at an affordable price (for you and the environment), not sometime in the future.
Saab and its BioPower engines and cars have in Europe become synonymous with the new trend of environmentally friendly cars. “Our BioPower car is the number one environmental car in Sweden, and it was introduced close to two years ago. It outsold, for instance, the Toyota Hybrid by 5 to 1 in 2006,” according to the noticeably pleased Saab CEO.
Saab BioPower, a flex-fuel vehicle available in both the 9-5 and smaller 9-3 models, is a premium-class car with plenty of horsepower, a combination, which makes its drivers feel good about themselves. Over 80% of all Saab cars sold in Sweden have the BioPower engine. Why is the car so successful in Sweden? “It’s a combination of the vehicle industry, the government and the consumer,” Jonsson said. “The environment is definitely the number one priority in Sweden right now. The Swedish government has come up with a battery of incentives such as a 20% lower car tax, and no taxation on biofuels as well as free parking in the bigger cities. Then there are the benefits of bioethanol (E85 in Sweden) as a renewable fuel, which reduces greenhouse gas and helps us to not get dependent on petroleum.”
Jonsson believes Saab clients are progressive and modern and, most important, want to be responsible.
“Of our customers in Europe, 45% buy the car because it is environmentally friendly,” he said. “35 % buy it because of the economic incentives.”
The knowledge of the imminent danger from our reckless use of non-renewable resources has prompted a need for a complete reversal in our transport system for the future according to Jonsson.
“We’re in a transition period,” Jonsson said. “And there are options available today to make a difference. We at Saab want to show that environmental cars don’t have to be boring. They can be fun!”
BioPower in the United States In 2007, America’s auto fleet is hardly green, but it’s getting greener. With seesawing gasoline prices and uncertainty about the future of oil, consumers are finally focusing on fuel economy and looking beyond big SUV’s for their next vehicle. A 2006 consumer survey by J.D. Power and Associates found an amazing 57 percent of respondents would consider buying a hybrid car for their next vehicle, and 49 percent would consider a car powered by E85 ethanol.
Despite these numbers and the proliferation of cars such as the Toyota Prius, hybrids still made up only about 1% of the market in 2006. The share for environmentally friendly cars, however, is growing and by 2013, J.D. Power predicts green cars will have five percent. A wide range of hybrids entered the market this year, so why then isn’t the BioPower engine available already in the U.S.? Jonsson, whose two-year post at the helm of the company isn’t long enough to have had any serious impact on that particular decision, has no readily available answer.
“There’s no question we would have liked to be there now, not tomorrow, but this being said, we also have to look at realities; very few states offer you the opportunity to fill your car with the E85 fuel. As soon as we see the infrastructure and the availability of E85 taking off we will be ready. Realistically, this will probably take a couple of years.”
The small car company, which now seems posed for enduring profitability, lost money during the majority of years it’s been owned partly or wholly by GM. The US car giant bought a 50 percent stake and management control of Saab in 1989, then the remainder in December 1999. Why would you take a job such as the one of CEO at Saab after so many hard years?
“It’s certainly not the financial benefits or the media exposure. It’s just that it’s really hard to say no to such an opportunity after so many years with the company,” said Jonsson.”
He started working for Saab as a Trainee in 1971, in computer systems development. “At the time, we were working with main frames that were as large as today’s cars. The good thing with being part of the early development of information systems and intra-company structure was you learned the company, inside and out.”
Jonsson, after a couple of years of leadership, seems relaxed, with a positive, confident outlook.
“It used to be that we’d need a much larger volume to break even. After cost-cutting efforts of late, where we eliminated at least one third of overall costs, we’re ready for our next leap. Saab will be one of the most efficient and productive car companies in the world. We are at present able to turn in a profit at between 150,000 and 175,000 sold cars.”
“Yes, we have gone through many years of struggle to get to where we now are, but bear in mind the integration with GM didn’t quite work until the U.S. group, GM, took over Saab entirely, in 2000.” (Up to that year, Saab Cars was jointly owned by GM and Investor of the Swedish Wallenberg group.)
Saab’s production processes have had a productivity development of 5% to 15% per year, Jonsson said. “All of Saab’s development, all of its cars are based on social responsibility; cars have always had to be secure and functional—today, also responsible in the environmental sense: Driving Saabs should make sense in every way. And yet, at Saab we have taken our concept one step further, making sporty, progressive design and performance part and parcel of the cars’ looks and driving experience as well.”
By Ulf Barslund Mårtensson
“It feels good to finally be in the limelight again, to have the absolute right models and technical solutions in place at the right time,” said Jan Åke Jonsson. Photo: Nikolaj Alsterdal.
"After cost-cutting efforts of late, where we eliminated at least one third of overall costs, we’re ready for our next leap. Saab will be one of the most efficient and productive car companies in the world. We are at present able to turn in a profit at between 150,000 and 175,000 sold cars,” according to Jonsson in late summer of 2007. Photo: Nikolaj Alsterdal.