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
It could have been easy enough to hold Gyllenhammar's address for the old man's anger, who sees disappointed his life's work in the hands of foreign owners. Frustration born of a situation that 2015 presented in depressing colors. Scania from Södertälje came to 100% owned by VW, after a tough but ultimately unsuccessful defensive battle Swedish pension fund. Volvo Cars completely in the hands of Chinese and Saab (automobiles) in fact as well.
The last remnants of Swedish pride at that time consisted of a small series manufacturer in Ängelholm and the weakening Volvo truck production.
In the process, Sweden is profusely benefiting from investment from China, the labor market is running low, the housing market in Gothenburg is exhausted, and construction is taking place all over the country. The boom continues into little Trollhättan, which becomes the sleeping city for Gothenburg. And yet, the discontent and the frustration of an unbridled globalization was there. Pher Gyllenhammar had pronounced what many thought - but hardly ever said so until then.
Then came the Wolfsburg diesel gate and thus the hope for revenge. Since then, the hope haunts Sweden to buy Scania. The pension funds always signal readiness, in the hope that the ailing VW Group needed funds for its restructuring. The thing is simmering since then, the last line is not written yet.
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 on the upcoming decision to float Volvo. The media response was enormous. The Expressen, as always very close to the folk-soul, wrote about a dream that would come true, and then the message got over Reuters denied. The stock exchange listing in Stockholm and the option to make Volvo Swedish again were adjourned.
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 rage, could be seen as a prelude. A highly respected, multi-award winning veteran speaks plain text. Since then, things are moving and nothing has to stay the way 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.