Last week this message went through the net, most readers will have shrugged ... maximally. The mail reached me in a café, where I was chatting with a friend about the world, cars and Saab in particular. One of those important, pleasant conversations where the hobby and passion for the small Swedish brand suddenly becomes the most important thing in the world.
What interests the NEVS AB, New Long Ma and Fujian Motors at this moment? On the other hand, there are things that are worth the second look and that you just have to write about. Especially when a new company is born in China and Västragötland.
Who is New Long Ma?
New Long Ma belongs to Fujian Motors, the majority property of Fujian Provincial Government. In China, there are far more than 100 car brands, the overwhelming majority has only regional importance. They were founded in the 80 and 90 years by regional princes, are considered due to small numbers as unprofitable, are the central government a nuisance. This would like to see the offer limited to two or three strong national providers. Therefore, Beijing has been trying for years, with little success, to end the wild growth in the provinces.
Fujian Motors is a specimen of provincial wild growth. Founded in the year 1992, joint ventures with Mercedes (Fujian Benz Automotive), Yulon Motors (Taiwan) and Mitsubishi (South East Fujian Motor). In addition to the cooperations, there are the own brands Fujian New Forta Automobile Industry, Xiamen King Long Motor Group and New Long Ma. 2013 acquired NEVS cooperation partner Dongfeng 40% from Fujian Motors. China experts saw this as the beginning of a market adjustment.
National own brands play an important role in the future strategy of the central government. Chinese customers should, and they do, buy “Made in China”. The own brands grew faster than joint ventures in 2015, they are more aggressive in terms of prices, and are particularly popular with buyers outside the megacities.
Provincial government car factories represent old China. Like coal mines and steel furnaces in Mao times, they are considered outdated. The new smart, green China is relying on the restructuring of the economy, on intelligent solutions that are being devised in the country. The announced entry of NEVS AB with 50%, the purchase of a further 15% by NEVS shareholder SRIT is nothing more than a takeover of New Long Ma. Probably as a result of the discreet request of the central authorities who want to form a group for “New Energy Cars”.
From 2017, NEVS has two factories in China, 300.000 vehicles production capacity, two model series. Of the New Long Ma EV minivans and EV vans, 2015, in its first year of production, sold 12.000 units. They rank 3 in the admission statistics in their segment. All this is a remarkable development for a company whose future no London bookmaker would have wagered a single penny before 12 months.
Together with the plant in Trollhättan, the NEVS AB thus comes to almost half a million units, which could be produced worldwide per year. With it one comes, theoretically, into the regions of the great, old rival Volvo.
All of this, of course, is pure theory. The takeover has to be completed and the new models will be launched in 2018. A long way ! And half a million vehicles, that's an announcement. Still, it shows how dynamically things can develop. And that NEVS could play a key role as a provider of electromobility. And above all: NEVS is heading in the right direction in the long term.
The effects on Trollhättan
Anyone who wondered a few weeks ago, where the already ordered 100.000 small electric delivery vans and minivans will probably come from, will hopefully not have considered Trollhättan as the answer. If he does, then he is a hopeless romantic. Trollhättan should play a role for Europe and North America, not for Asia. New Long Ma, the two plants in China, do not concern us at first glance.
At second glance, they are important, maybe even crucial. If NEVS and its brands will be a successful supplier of electromobility in China in the future, then this is good for Trollhättan. Or, put simply: If NEVS is strong in Asia, then that's good for the Swedish ambitions.
The next step would be the successful entry into New Long Ma. Then NEVS would have a first product line, and then a second from 2017. Then in 2018 the new models. SUV, hatchback, sedan, MPV. Maybe under the brand name Saab. That alone raises further questions. Keywords: distribution, aftersales ...