BF Analysis: Why Selling Engines to Saab Makes Sense

This morning BMW and Saab announced that Saab will be using BMW powerplants in future front wheel drive Saab products. However thanks to various sources it ‘s become clear that Saab has not just signed an agreement to use BMW engines in future products but they are likely to use MINI ‘s current Prince range of engines in several products. Sources are telling us that first will be the 9-2 hatchback potentially followed by the next generation 9-3 family of vehicles.

But why would BMW give Saab the same engine range from the MINI for a car that will likely compete with it? Economies of scale would be a good reason. But we ‘re not so sure it ‘s that simple.

We know that 2013 will bring a new MINI hatch that will in turn bring an entire new MINI family of small cars. We also know that BMW is planning on using new three cylinder engines in this new range of products along with a new generation of FWD(and potentially even RWD) BMWs. So where does the Prince family of engines fit into BMW ‘s future plans?

We believe MINI will continue to use the Prince in the R58 Coupé, R59 Roadster and R60 Countryman (and other R60 derivatives) well into the second half of the decade. But the start of a transition to a new generation of three and four cylinder powerplants will begin in 2013 with the next generation MINI hatch and likely continue with the next generation Coupé, Roadster and Countryman line.

So what is Saab actually getting? It would seem that BMW is selling an engine on the back half of its lifecycle that won ‘t be in any BMW or MINI products after the 2018 model year. In short it ‘s a good sale for BMW. Proven technology but yesterday ‘s technology that is soon to be on its way out. And on Saab ‘s end it ‘s a good buy in that the Prince family of engines has a lot of life left in it. At it ‘s core there are few 1.6L engines that bridge the gap from efficiency to performance so well. And to develop an engine of this caliber from scratch would cost hundreds of millions of dollars. Something newly independent Saab simply doesn ‘t have.

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  • Roy

    After three years our R56 still amazes me with its efficiency — a lifetime fuel consumption average of almost 32mpg.

  • pwnstar

    I think it could have to do due to the fact that they already sell these engines to the PSA group aswell. Since they’re already in other vehicles than the BMW group it doesnt really affect them anyways. Easy money and as you guys already mentioned good thing for SAAB I guess.

  • goat

    How I miss the Saab 900 SPG… saw a ratty one the other day… still a great shape to behold. Crazy torque steer too… a friend “made me” driver her home in an old Saab 9000 turbo-hatch (she’d had a few too many) one night years back… car left an impression! 🙂

    Back to future Saabs, I think it’s a brand with a lot of goodwill so glad to see they are forming a supplier alliance on engine with BMW/MINI.

  • It’s a pretty good article, but the Prince is anything but yesterdays technology. Go make a list of the features in the engine, and see who currently offers that mix. It’s a very short list indeed.

    Matt

    • I would agree it is a modern engine compared to the current competition. BUT BMW is already beyond this technology and it is dated for them. The next generation motors coming will feature even more technology for increased efficiency and performance.

      The motor going to Saab has yet to be released in the final form.

  • Pitz

    Somebody wrote that BMW sells engines to PSA.. BMW don’t sell those engines, but they developed it together with PSA. To be honest Prince engines, are good engines for PSA, but quality of those engines is very poor comparing to BMW engine quality. Actually calling it a “BMW engine” is a misunderstanding. R56 Cooper S after 20 000 km milege souds like a… diesel – its not a joke 😉 BMW designed the engine, but PSA is producing then, a lot of parts are made with very low quality, (1.6, 1.6T engine header for example) shame for BMW/MINI… I Was selling MINI’s and BM’s for couple of years, and I have the comparison. MINI R53 <2006 – 1.4, 1.6 and especially 1.6 supercharged – those were good reliable engines, and performance of 1.6 SC was just great, hi revs, smooth torque, also good and reliable for modification. Just compare the sound R53 cooper S and R56 S – in R53 you can here quality sound, and in R56 well… nothing special… Im sure R52,R53 MINI users agree with me 😉 But after all, Prince engines are probably better than comparable Opel, Toyota engines, not sure about VW.

  • but PSA is producing then, a lot of parts are made with very low quality

    PSA is producing the aluminum block. Nothing Else. The engine is built at a BMW plant in the US using BMW spec parts.

  • Mark

    I realize you guys have inside info, but the earlier Bloomberg article had suggested this will be a brand new engine not yet being used in any BMW product.

    My bet is that Saab will not use the Prince engine, but instead the upcoming BMW N13/N20 turbocharged 4 cylinder engine families. And, I think they will use them not just in the upcoming Countryman-based 9-2, but also in the 9-3, 9-4x, 9-5, and other upcoming Saab models. Essentially, then, they will use the BMW engines to replace the current range of GM Ecotec engines.

  • My bet is that Saab will not use the Prince engine, but instead the upcoming BMW N13/N20 turbocharged 4 cylinder engine families.

    I actually think you’re right. However I think this will likely turn into a multi-engine deal.

  • Pitz

    “My bet is that Saab will not use the Prince engine, but instead the upcoming BMW N13/N20 turbocharged 4 cylinder engine families.” Well this makes much more sense to me, than putting a MINI/PSA engine in. But those upcoming N13/N20 engines will be developed for a RWD drive car along with the gearbox (lengthwise engine position in the car), so Im wondering how Saab will handle it on a FWD cars. Either they’ll put own gearbox and place the engine crosswise, or they will do a RWD or AWD, place engine lenghtwise put it as much as possible backwards and finally produce a real car 😉 with good handling and 50/50 weighbalance…

  • Oglo

    @Pitz: My bet is that Saab will not use the Prince engine, but instead the upcoming BMW..

    BMW might as well hand over their shares to Saab for free