From reports in Indian media and also from a statement from the CEO of Brightwell, the Turkish competitor for the estate, we have learned that Mahindra signed a confidentiality agreement prior to January 22nd. An agreement which had to be signed in order to be able to place a bid. But just how serious is Mahindra about Saab?
Swedish Radio P4 Väst yesterday wrote that Mahindra was after Saab already back in 2009 when Saab's former owner General Motors put the company up for sale. Back then Mahindra also signed a confidentiality agreement and even had lengthy negotiations with GM. But in the end Mahindra decided, for unknown reasons, to not make a bid.
But now Mahindra is back. But what does Mahindra want? For anyone asking that question I would recommend reading an article in yesterday's edition of Forbes India.
From the Forbes India article it looks that Mahindra is in the process of building up their development capability, and they are doing it by acquiring companies and technology:
A senior automotive consultant puts it aptly. "They knew they are not in a great position when it comes to R&D. So for the last 4-5 years the idea has been just to invest in it. The technical center in Chennai, the 600 odd engineering set up at Ssangyong, the Italian design firm buyout or the projects they do with others like Ford, Renault or Navistar... M&M is building a huge organization capable of doing development work."
While Mahindra at the moment has a limited range of vehicle, mostly SUV's and some old car technology bought from Renault - the Verito, their ambitions are far bigger:
"With the little changes they have done, Verito is doing well but it is not going to last forever. They need a newer generation of platform... who knows even shorten the platform. But they have no skill in this area. I think Saab can help them there," says Deepesh. Fair point! I mean for $425 million, you get an established though niche brand, manufacturing facility in Europe and Saab's technical center. However much M&M will try and convince you that it wants to be the utility vehicles specialist, I think the company’s ambition is far bigger. That is to become a full line automobile player. The question is can Saab help M&M get there?
So Mahindra reminds us of Chinese Youngman. A company building vehicles using aging technology from other companies, in desperate search of new technology and knowhow in order to fullfill their ambitions of becoming an important player in the future automotive market in their home country and maybe even in the world.
The big questions for the Saab fans is what are their ambitions for Saab? Is it to make Saab a successful brand based in Sweden (like Tata has done with JLR), or just to get the technology?
