It's been more than a year since Volvo legend Pher Gyllenhammar gave a fire speech at a Swedish car industry event. The nation has recklessly abandoned one of its key industries, with long-term implications for the country.
Swedish car industry in strange hands
One could have made it easy for oneself and mistaken Gyllenhammar's speech for the anger of the old man who, disappointed, sees his life's work in the hands of strange owners. Frustration born out of a situation that presented itself in depressing colors in 2015. Scania from Södertälje became 100% owned by VW after a tough but ultimately unsuccessful defensive battle between Swedish pension funds. Volvo Cars completely in the hands of the Chinese and Saab (automobiles) in fact also.
The last remnants of Swedish pride at that time consisted of a small series manufacturer in Ängelholm and the weakening Volvo truck production.
Sweden is benefiting greatly from the investments from China, the labor market is at its limit, the housing market in Gothenburg is exhausted, and construction is going on all over the country. The boom goes all the way to little Trollhättan, which is becoming a sleeping city for Gothenburg. And yet there was dissatisfaction and frustration with unchecked globalization. Pher Gyllenhammar had said what many thought - but until then hardly anyone said.
Then came the Wolfsburg Dieselgate and with it the hope of revenge. Since then Sweden has been hoping to buy Scania. The pension funds repeatedly signal readiness, in the hope that the ailing VW Group needs funds for its restructuring. The matter has been simmering since then, the last line has not yet been written.
Volvo Cars on the stock market?
Saab, as we know, did not become Chinese then. In the summer came the decision; Saab AB is about as Swedish today as it was 1947 before cars were built in Trollhättan. In the city you are not really unhappy about it. Especially in Saab veteran circles, confidence in foreign investors is not particularly pronounced. And that is diplomatically formulated.
At Volvo, since the Gyllenhammar speech, the idea of taking the company public has been taking shape. The topic comes up again and again in the press, and in May and November, the manufacturer successfully placed a bond on the free capital market. A step towards self-financing, away from Chinese pots of money whose access is becoming increasingly difficult due to difficult capital account rules.
Last week reported Dagens Industri about the upcoming decision to list Volvo on the stock exchange. The media coverage was enormous. The Expressen, as always very close to the people's soul, wrote about a dream that was coming true, and then the message got over Reuters denied. The Stockholm listing and the option to make Volvo Swedish again have been postponed.
Til today. Volvo cars places preference shares worth 5 billion (about 513 million) at 3 institutional Swedish investors. A conversion into ordinary shares and an initial public offering 2017 are not excluded. A historical step. Volvo Cars has, for the first time since 17 years, part owner from Sweden.
The auto industry is at the beginning of a radical change. Alternative drive vehicles are less complex to develop and produce than conventional ones. Their maintenance costs are lower and distribution channels over the network revolutionize distribution and save double-digit percentage costs.
The chance of small manufacturers
The upheaval is a threat to the big players in the industry and could also be the comeback for small, innovative manufacturers. Sweden's auto industry has always been something special. Typical of the country, with a very special flair. And even Volvo was never really a big player, at least not in international comparison.
Gyllenhammar's speech, the old man's anger, could be seen as a prelude. A well-respected, award-winning veteran, speaks plain language. Since then, things have been moving and nothing has to stay as it is.
Times have become restless and unfriendly. Not only globalization blows an increasingly rough wind in the face, also the military expenditure rises. In this uncomfortable environment, the Saab AB earns magnificent and will do so in the next few years. At the same time, there is a lot of money worldwide for institutional investors looking for investment opportunities.
Against this background, a return of Saab in the automotive industry in the coming years can not be ruled out.