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Another good story by Mark Phelan:

http://www.freep.com/money/autoreviews/phelan9e_20050609.htm


Saab stakes its long-term health on collection of new models

June 9, 2005

BY MARK PHELAN
FREE PRESS COLUMNIST

GM desperately wants Saab to take flight, but after 15 years and hundreds of millions of dollars, the project could crash and burn.

Saab is a quirky little brand that grew out of a Swedish aircraft company after World War II. A dozen Swedish aircraft engineers scoured junkyards, grabbing whatever parts caught their eyes like magpies, the European birds that collect shiny objects for their nests.


Saab U.S.A.'s vehicle lineup includes the Saab 9-2x, Saab 9-3 convertible, Saab 9-3 Sport Combi, Saab 9-3 sport sedan, Saab 9-5 and the Saab 9-7x. The success of these models is critical to the automaker, which has spent years struggling. The company sold just 135,000 cars worldwide in 2003, the best year in its history. Future Saabs will use recognizable Saab design features like curved windshields and aircraft-style interiors.

They cobbled the pieces together and produced the unique Saab 92.001, a teardrop-shaped prototype unlike anything that came before it. Over the next couple of years, GM will add several vehicles equally unlike previous Saabs as it tries to build the brand into a player in the global luxury market.

Future Saabs will include the 9-3 Sport Combi, a sporty wagon that goes on sale in November, and the 9-6x, an all-wheel-drive crossover wagon based on the new Subaru B9 Tribeca. It arrives early in 2006.

A smaller crossover wagon should follow in a couple of years, and a larger and more powerful car to replace the 9-5 sedan and station wagon should arrive by 2008. A revival of the delightful Sonett sports car is even possible.

SAAB STORY: A BRIEF HISTORY
1937 Svenska Aeroplan Aktiebolaget -- later abbreviated to Saab -- founded to make military aircraft in Trollhättan, Sweden.
1949 Production starts on the first Saabs: the Standard 92 and the De Luxe version. Both are painted the same moss green, left over from the aircraft.
1970 The Saab Sonett III arrives, a contemporary update of the two-seat sports car developed specifically for the U.S. market three years earlier.
1989 GM announces it will to buy 50% of Saab-Scania's passenger car business. GM becomes sole owner of Saab in 2000.
1993
Saab 900 is unveiled, the first time an existing Saab model is replaced with a completely new version in the same market segment.

When it went on sale in 1949, the 92's unique combination of aerodynamic styling, practicality, performance and safety set Saab on the path to winning a tiny but fanatically loyal following. Saab owners are among the best educated and wealthiest of any brand -- "a demographic to die for," in the words of one executive.

"Saab draws unique buyers," said Jay Spenchian, general manager of Saab U.S.A. The brand dovetails into GM's brand lineup just below Cadillac as an entry-luxury brand to take on the likes of Acura, Audi and Volvo, he added.

Despite that, Saab is in trouble. It sold a minuscule 135,000 cars worldwide in 2003, the best year in its history. Honda sold more Accords than that in the United States alone in the first five months of this year, and a year of U.S. sales for all Saabs wouldn't amount to a decent quarter for the Honda Civic.

Saab will never be a million-selling brand, but it must grow or die.

GM has yet to make a cent off its investment in Saab, but it aims to change that with a wide range of new vehicles.

If not, the automaker will pull the plug on its Swedish patient, despite Saab's mouth-watering demographics and the brand's precious status as a global player in the luxury market.

The challenge is to win new owners without alienating existing ones, said Jim Hall, vice president for industry analysis at the Southfield office of consultant AutoPacific.

"Saab gives GM access to a pool of buyers that none of its other brands can reach," he said. "The question is whether they can leverage what Saab is to broaden that buyer base."

That's possible with the right combination of new vehicles and smart marketing, he said, citing Cadillac as an astonishing example of GM's ability to reinvigorate a moribund brand.

GM's first attempt with Saab wasn't encouraging. The Saab 9-2x, a rebadged and mildly reworked version of the sporty Subaru WRX wagon, hit the market with a whimper, selling an anemic 1,788 units in 2004 and a disappointing 2,226 in the first five months of this year.

Saab's second try just went on sale. The 9-7x SUV is a considerably more sincere effort. It shares its major parts and systems with GM's midsize SUVs but has a lower ride height, convincing Saab looks and myriad interior changes that even include moving the ignition switch to the traditional Saab location on the center console behind the shifter.

Neither the 9-2x nor 9-7x is as good a solution as the upcoming vehicles that were developed with Saab input from the start, GM Vice Chairman Bob Lutz admitted in an interview last year.

However, they represent an immediate injection of cash to Saab's bottom line. Without that help, he said, it would only be a matter of time before GM turned off the lights at Saab headquarters in Trollhattan, Sweden

"We absolutely believe Saab can soar," Spenchian said. "It's just a matter of putting legitimate entries in key parts of the market and raising people's awareness of what Saab is outside geographic areas where we are already strong," like the Northeast and Rocky Mountain states.

As Saab rummages through GM's garage, there's a danger it could become a grab bag of vehicles with no unifying traits, but the company has a long history of successfully borrowing from other automakers.

The Saab 9000 was developed with Fiat and Alfa Romeo, and the company has used engines built by everyone from Ford to Triumph. Saab even hired an outside contractor to build its signature model, the 900 convertible, and every car the company has introduced since the 1993 900 was based on a GM platform.

Future Saabs will use recognizable Saab design features like curved windshields and aircraft-style interiors, said Sean McNamara, group manager for product at Saab Cars U.S.A.

Saab will also continue to rely heavily on turbocharged engines for its hallmark combination of performance and fuel economy. It is the first GM brand to get a turbocharged version of the automaker's strong 24-valve V6 and has become GM's global center of expertise for turbocharging. Saab also plays a leading role in safety engineering for the company.

If all those borrowed pieces fit together, Saab may stay true to its magpie heritage and finally take flight under GM.
 

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Glad the turbo is here to stay, overtaking is so labourious without one, I'm also interested in their Ethanol engine technology, Honda and toyota are making a big deal about their hydrogen fuel cell cars at the moment "we are driving dinosaurs etc." but as far as I know hydrogen is only produced at the moment through further refining petrol :confused: where's the progress in that.
 

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A very positive article on the whole. The author hits on a number of points that have been percolating in various threads on SAABcentral.

SAAB traditionalists and reactionaries are constantly bewailing the platform- and part-sharing with GM. The author correctly points out that platform- and part-sharing are a consistent theme - perhaps even a core value of SAAB. As a small manufacturer, SAAB has never been able to custom design all of the components of its vehicles. It has long played a "pick and choose" game among other manufacturers for components for its vehicles.

The author also talks about the broadening of the vehicle range. Many of the reactionary SAABisti decry the addition of a SUV to the vehicle range. Yet, no one can deny that SAAB must sell more vehicles if it intends to remain in business and prosper enough to develop new vehicles. SAAB's vehicles have long been quirky (I hate to use the dreaded q-word, but it is appropriate) in comparison to other more mainstream vehicles. Such quirkiness ensures a devoted, but limited following in the marketplace. Unless SAAB intends to make bland Honda-like sedans that appeal to a broad range of tastes, it will never sell many vehicles with a limited product range. How then to increase sales? Adding more models appears to be the answer that SAAB and other interested observers have seized upon as a way to increase SAAB's overall sales while retaining SAAB's traditional quirkiness. SAAB can thus make vehicles that retain their traditional strong character (with the resulting limited appeal) and yet still turn a profit.

The author also touches on the stopgap 9-2X and 9-7X vehicles. These vehicles have engendered, more than any others, the ire of the traditionalists. The author explains that SAAB has lost money consistently for 14 of the last 15 years. The bleeding must stop before SAAB can grow stronger. New vehicles to attract new customers must be provided. Further, SAAB's limited product range addressed only a small slice of the overall car market. Around the world, sedans and wagons are only a portion of the total vehicle market. Sport Utilities, Crossovers, and other hybridized vehicles are becoming more commonplace. SAAB completely ignored that market and, thus, gave up all chances to sell to those customers.
 

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Discussion Starter #4
Well said, Rob.

I suggest to Jay Spenchian to hire Q (get it ?) as our new brand marketing spokesman :)
 
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