BMW Bidding to Buy Saab to Bolster Front Wheel Drive Products?

According to Germany’s Autobilde (via Autoblog) BMW is one of 6-7 firms in the running to by the Saab brand. Why would a successful company like BMW want to own one of the most trouble automakers in recent history? We can see three reasons.

1. Front Wheel Drive

Saab’s offerings have traditionally been front wheel drive in recent history. Because of this it wouldn’t be a stretch to use the Saab brand to help gain more buying power when it comes to BMW’s upcoming front wheel drive architecture destined for both the new MINIs and BMWs. We can also imagine future Saab’s using the upcoming three cylinder engine family (the N37) as well as BMW’s N20 four cylinder in its larger cars.

We know that Saab had been working on project Phoenix which reportedly used an R56 chassis and the BMW Prince engine (the current formula for MINI’s R56). So clearly there was technical cooperation between the two. Because of this BMW knows Saab’s future plans well and a strong understanding of what they’d be getting in a sale. In fact we’d expect BMW likely has an entire proposed road map already in place (should they get the approval) to align the future Saab line-up with the next 10-15 years of BMW front wheel drive products.

2. Emerging Markets

Emerging markets of China, India and South America are huge opportunities for car companies. But it’s not just the Tata’s of the world that see potential sales. These markets represent huge growth for luxury and near luxury brands. Saab falls in the latter category but below BMW. This could allow BMW to offer a lower cost product in emerging markets like China while maintaining the prestige of the core BMW brand.

3. Manufacturing

Saab has a modern manufacturing plant in Trollhattan that could easily be made to produce everything from Saabs to even MINI and front wheel drive BMWs. For BMW additional production capacity could be key as they look to grow their own core brands into new markets throughout the world.

To make this all work for BMW it would be hard to imagine BMW not stipulating that Saab’s old debt be forgiven and not part of any deal. But there is value there if the price is right. The products (specifically the new 9-5) are relatively good and the future roadmap looked promising.

Will it happen? We’d give it a 33% chance based on all the turmoil surrounding the sale. However it’s not hard to see why BMW might be interested in the Swedish brand.