Saab Gets One Last Chance To Restore Its Profitability
08-01-08, 12:48 PM
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Saab Gets One Last Chance To Restore Its Profitability
Saab Gets One Last Chance To Restore Its Profitability
Last week, in his GM FastLane blog, GM Vice Chairman Bob Lutz confessed that although "in my younger days I was never what you would call a Saab enthusiast," he is now a champion for the Swedish brand. "We in senior management are convinced that Saab is a jewel in the GM crown, and we're determined to ensure its success," he wrote.
"So while I've read a number of comments on this blog questioning the future of Saab, let me say that it belongs in the GM family and we plan on keeping it there," Lutz added.
Such public support from his boss must be appreciated by Steve Shannon, the new boss of Saab Automobile USA, but his job, saving Saab while keeping the brand's loyalists happy, still won't be easy. This he knows.
The New Guy
When Shannon posted his first column on the GM Fastlane blog in late April, imploring Saab boosters to "be patient with me as I learn the ropes around here," the responses, many from longtime owners, got straight to the point. Typical comments: "Saab needs to find its future in the past." "Keep the quirkiness that Saab owners have come to love and expect, and resist the corporate 'parts bin' mentality." "Help the brand keep some of its unique identity. It goes way beyond the key on the console."
Uh oh. While it appears that a more coherent product strategy for Saab is finally emerging after nearly two roller-coaster decades under GM's stewardship, that troublesome word "quirky" still seems to be missing from the corporate vocabulary. Regarding the brand's well-known and much-loved idiosyncrasies, Shannon, a 25-year GM veteran, says, "I was trained that 'quirky' is never to be used."
Instead, the former Buick general manager is taking a more measured approach. With four all-new models in the next three years, Shannon's mantra is: Keep it simple, keep it Saab. Future Saabs will share global architectures with other GM products, but the brand will wrap more distinctive sheet metal around the hardware, with more Saab design cues inside and out, as well as specifically tailored driving dynamics, more horsepower and a renewed emphasis on safety and the environment.
Time Is Running Out
This latest game plan sounds brilliant — if only Saab weren't dangling on the ropes after hemorrhaging cash for all but two of the past 17 years. While GM Chairman Rick Wagoner and Vice Chairman Bob Lutz continue to publicly express their support for the brand, Chief Financial Officer Fritz Henderson is taking a more hard-nosed approach, telling reporters that Saab "has to get results."
The implication is that GM is prepared to take some drastic measures if Saab's managers are unable to stem the flow of red ink and sell enough vehicles at least to offset the cost of developing new products. Right now, Saab sells about 35,000 vehicles a year in the U.S., which is more than the brand moves in Sweden if you can believe it, but it's also about 90,000 units less than Ford-owned Volvo moves in America.
With the first of those new cars still 18 months away from U.S. showrooms, Saab's very survival in the interim will require an additional infusion of hundreds of millions of dollars — money GM can ill afford as it attempts to revitalize its flagging auto operations in North America and Europe.
Wagoner & Co. may be smarter — and Saab enthusiasts better served — if they put the brand up for sale, as Ford has done with its Premier Automotive Group. There are enough parallels between Ford's unhappy experience with Jaguar and GM with Saab that a spin-off is beginning to make more sense at the General's Detroit headquarters.
Product Blitz Is Coming
In the meantime, Saab's new models, including the next-generation 9-5 and 9-3, already are more than halfway through the development pipeline. According to Shannon, the next generation of Saabs will satisfy even the sharpest critics. When the new 9-5 arrives in model-year 2009, enthusiasts will recognize that "the looks, the driving character make it absolutely a Saab," even though it will share its basic underbody architecture with the Chevrolet Malibu and the Opel Vectra.
Shannon is particularly keen on the new 9-4X, a five-passenger crossover vehicle designed in Michigan and based on a new midsize architecture that could be shared by four or five other GM brands, including Chevy and Daewoo. Shannon describes the car-based crossover as "the spiritual successor to the station wagon," though he quickly adds that wagons won't fade entirely from Saab's future lineup. "We can tune it to ride and handle like a Saab," he says when asked how the brand will differentiate the 9-4X from its corporate siblings.
The so-called 9-1 (Shannon says the name has not been finalized) stirs the most passion from Saab's U.S. boss. He describes the car, which will share basic mechanicals with the next Opel/Saturn Astra compact, as "a true Saab that will be a replacement for the 9-2X." Shannon says the vehicle will have "an interesting body style...an iconic shape with a lot of design flair — kind of the opposite of sensible shoes." He adds: "But it will also have a good dose of utility. This is not just a toy — we don't want to do a generic bread-and-butter car."
Saabaru No More
More good news for Saab fans: There may be a performance-oriented 9-1 Aero targeted at the next-generation Subaru Impreza WRX (as opposed to being a near clone of the WRX, as the late 9-2X was) and the Mitsubishi Lancer Evo, with a high-output turbo four-cylinder under the hood and Saab's upcoming XWD Cross-Wheel-Drive system which will debut on the 2008 Saab 9-3.
As for future powertrains, Shannon says Saab "will have more bandwidth in turbocharged engines by then, from 200 horsepower to 300-plus." Advanced "clean" diesels, however, probably won't be seen in U.S.-bound Saabs until the next decade. And while Shannon anticipates that future Saabs might employ a version of the Chevrolet Volt's plug-in hybrid system, "that could be even farther down the road than diesels for us in the U.S."
On the downside, Shannon said there is no plan to resurrect the hallowed Sonett name any time soon on a genuine Saab sports car. As for the well-received Aero X concept, "as it stands, it will never see the light of day, but it will serve as a real inspiration" for future Saab products, including the new 9-4X and the next 9-3 and 9-5.
Kill or Be Killed
Until the new vehicles begin to trickle into U.S. dealers in early 2009, Saab will refocus its marketing on such core virtues as "responsible performance," safety and functionality, with innovative technology as a common thread binding everything together.
Shannon maintains that Saab "continues to fill a unique niche in GM's multibrand strategy in the U.S." And while Volvo, BMW, Audi and the premium Japanese brands remain its principal competitors, he insists that Saab does not — and will not — compete directly with Cadillac. Rather, "people who buy Saabs would never consider another GM product."
But it's by no means clear that Shannon can find enough of those non-GM buyers to keep Saab afloat in the States, at least until the new product wave hits these shores. Meanwhile, the question lingers: Will Saab loyalists come back to the brand in sufficient numbers, and will they generate enough positive buzz to lure newcomers to the fold?
If Shannon's bosses aren't satisfied with the results, don't be surprised to see GM follow Ford's lead with Jaguar: Pull the plug on the corporate life-support system and spin off Saab to the highest bidder.
Last week, in his GM FastLane blog, GM Vice Chairman Bob Lutz confessed that although "in my younger days I was never what you would call a Saab enthusiast," he is now a champion for the Swedish brand. "We in senior management are convinced that Saab is a jewel in the GM crown, and we're determined to ensure its success," he wrote.
"So while I've read a number of comments on this blog questioning the future of Saab, let me say that it belongs in the GM family and we plan on keeping it there," Lutz added.
Such public support from his boss must be appreciated by Steve Shannon, the new boss of Saab Automobile USA, but his job, saving Saab while keeping the brand's loyalists happy, still won't be easy. This he knows.
The New Guy
When Shannon posted his first column on the GM Fastlane blog in late April, imploring Saab boosters to "be patient with me as I learn the ropes around here," the responses, many from longtime owners, got straight to the point. Typical comments: "Saab needs to find its future in the past." "Keep the quirkiness that Saab owners have come to love and expect, and resist the corporate 'parts bin' mentality." "Help the brand keep some of its unique identity. It goes way beyond the key on the console."
Uh oh. While it appears that a more coherent product strategy for Saab is finally emerging after nearly two roller-coaster decades under GM's stewardship, that troublesome word "quirky" still seems to be missing from the corporate vocabulary. Regarding the brand's well-known and much-loved idiosyncrasies, Shannon, a 25-year GM veteran, says, "I was trained that 'quirky' is never to be used."
Instead, the former Buick general manager is taking a more measured approach. With four all-new models in the next three years, Shannon's mantra is: Keep it simple, keep it Saab. Future Saabs will share global architectures with other GM products, but the brand will wrap more distinctive sheet metal around the hardware, with more Saab design cues inside and out, as well as specifically tailored driving dynamics, more horsepower and a renewed emphasis on safety and the environment.
Time Is Running Out
This latest game plan sounds brilliant — if only Saab weren't dangling on the ropes after hemorrhaging cash for all but two of the past 17 years. While GM Chairman Rick Wagoner and Vice Chairman Bob Lutz continue to publicly express their support for the brand, Chief Financial Officer Fritz Henderson is taking a more hard-nosed approach, telling reporters that Saab "has to get results."
The implication is that GM is prepared to take some drastic measures if Saab's managers are unable to stem the flow of red ink and sell enough vehicles at least to offset the cost of developing new products. Right now, Saab sells about 35,000 vehicles a year in the U.S., which is more than the brand moves in Sweden if you can believe it, but it's also about 90,000 units less than Ford-owned Volvo moves in America.
With the first of those new cars still 18 months away from U.S. showrooms, Saab's very survival in the interim will require an additional infusion of hundreds of millions of dollars — money GM can ill afford as it attempts to revitalize its flagging auto operations in North America and Europe.
Wagoner & Co. may be smarter — and Saab enthusiasts better served — if they put the brand up for sale, as Ford has done with its Premier Automotive Group. There are enough parallels between Ford's unhappy experience with Jaguar and GM with Saab that a spin-off is beginning to make more sense at the General's Detroit headquarters.
Product Blitz Is Coming
In the meantime, Saab's new models, including the next-generation 9-5 and 9-3, already are more than halfway through the development pipeline. According to Shannon, the next generation of Saabs will satisfy even the sharpest critics. When the new 9-5 arrives in model-year 2009, enthusiasts will recognize that "the looks, the driving character make it absolutely a Saab," even though it will share its basic underbody architecture with the Chevrolet Malibu and the Opel Vectra.
Shannon is particularly keen on the new 9-4X, a five-passenger crossover vehicle designed in Michigan and based on a new midsize architecture that could be shared by four or five other GM brands, including Chevy and Daewoo. Shannon describes the car-based crossover as "the spiritual successor to the station wagon," though he quickly adds that wagons won't fade entirely from Saab's future lineup. "We can tune it to ride and handle like a Saab," he says when asked how the brand will differentiate the 9-4X from its corporate siblings.
The so-called 9-1 (Shannon says the name has not been finalized) stirs the most passion from Saab's U.S. boss. He describes the car, which will share basic mechanicals with the next Opel/Saturn Astra compact, as "a true Saab that will be a replacement for the 9-2X." Shannon says the vehicle will have "an interesting body style...an iconic shape with a lot of design flair — kind of the opposite of sensible shoes." He adds: "But it will also have a good dose of utility. This is not just a toy — we don't want to do a generic bread-and-butter car."
Saabaru No More
More good news for Saab fans: There may be a performance-oriented 9-1 Aero targeted at the next-generation Subaru Impreza WRX (as opposed to being a near clone of the WRX, as the late 9-2X was) and the Mitsubishi Lancer Evo, with a high-output turbo four-cylinder under the hood and Saab's upcoming XWD Cross-Wheel-Drive system which will debut on the 2008 Saab 9-3.
As for future powertrains, Shannon says Saab "will have more bandwidth in turbocharged engines by then, from 200 horsepower to 300-plus." Advanced "clean" diesels, however, probably won't be seen in U.S.-bound Saabs until the next decade. And while Shannon anticipates that future Saabs might employ a version of the Chevrolet Volt's plug-in hybrid system, "that could be even farther down the road than diesels for us in the U.S."
On the downside, Shannon said there is no plan to resurrect the hallowed Sonett name any time soon on a genuine Saab sports car. As for the well-received Aero X concept, "as it stands, it will never see the light of day, but it will serve as a real inspiration" for future Saab products, including the new 9-4X and the next 9-3 and 9-5.
Kill or Be Killed
Until the new vehicles begin to trickle into U.S. dealers in early 2009, Saab will refocus its marketing on such core virtues as "responsible performance," safety and functionality, with innovative technology as a common thread binding everything together.
Shannon maintains that Saab "continues to fill a unique niche in GM's multibrand strategy in the U.S." And while Volvo, BMW, Audi and the premium Japanese brands remain its principal competitors, he insists that Saab does not — and will not — compete directly with Cadillac. Rather, "people who buy Saabs would never consider another GM product."
But it's by no means clear that Shannon can find enough of those non-GM buyers to keep Saab afloat in the States, at least until the new product wave hits these shores. Meanwhile, the question lingers: Will Saab loyalists come back to the brand in sufficient numbers, and will they generate enough positive buzz to lure newcomers to the fold?
If Shannon's bosses aren't satisfied with the results, don't be surprised to see GM follow Ford's lead with Jaguar: Pull the plug on the corporate life-support system and spin off Saab to the highest bidder.
08-01-08, 08:43 PM
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08-02-08, 02:40 AM
#3
[QUOTE=UberNoob;3725917]its more like one piece of poop flushing down the GM toilet/QUOTE]
I laughed so hard when I read this I almost p**ped myself
I have to agree, What a waste of money for GM to keep spending on a brand that only sells 35K cars a year in the US (so what do they sell worldwide, 75K cars a year?), and has absolutely no credibility or desirability (and no resale value). I can't imagine Saab would ever make a car that I'd really want to throw my money away on.
I laughed so hard when I read this I almost p**ped myself
I have to agree, What a waste of money for GM to keep spending on a brand that only sells 35K cars a year in the US (so what do they sell worldwide, 75K cars a year?), and has absolutely no credibility or desirability (and no resale value). I can't imagine Saab would ever make a car that I'd really want to throw my money away on.
08-02-08, 06:40 AM
#5
Lexus Fanatic
Saab's problem is obvious, and GM's management can't see the forest for the trees.
GM bought up Saab some years ago and tried to make it into something that it wasn't, and, in many ways, couldn't be. The company was a niche manufacturer that sold quirky, Sweedish-designed hatchbacks and convertibles with FWD and console-mounted ignition switches to an equally quirky customer base that was mostly left-of-center by U.S. standards (Here I go with my hated images and stereotypes, but, in this case, there was at least some truth to it). The formula, though small and unpretentious by the standards of huge companies like Toyota and GM, worked. Saab essentially satisfied its small customer base.
Then GM decided to expand even more by buying the company up, decided that its unique Sweedish products were too expensive to produce and didn't sell enough, changed the basic design of its vehicles to GM world-platforms shared with Opel, Chevy, Cadillac, and Saturn, eliminated the hatchbacks, and tried to force those new, "world" Saabs onto a customer base that didn't particularly want them, and clearly preferred the old Saab products. Later, GM acquired an interest in Subaru (since sold to Toyota) and introduced the ill-fated 9-2X, a redone Impreza and WRX, and the 9-7X, a redone Chevy Trail Blazer with some Saab touches. The 9-2X, being essentially a Subaru product, gave Saab a Japanese-reliable AWD vehicle, but was not particularly popular....customers saw they could get the same thing (Impreza) at a Subaru shop for a lower price than Saab was charging, albeit with a little less trim. The 9-7X was a flop from the start...........Saab's customers, for the most part, are simply not interested in SUV's.
So..........I could go on and on, but I think the main problem is that Lutz & Co. simply don't want to admit that what they did in taking over Saab and completely redoing its vehicles was a mistake. They are trying to "justify" their marketing moves by creating imaginary reasons for continuing them.
What Saab needs to do is to is, like Saturn, be returned to the company...and customer base..... it was in the early 1990's. GM, likewise, ruined the excellent Saturn company of the 90's with its post-1999 marketing, but also refuses to admit that as well.
GM bought up Saab some years ago and tried to make it into something that it wasn't, and, in many ways, couldn't be. The company was a niche manufacturer that sold quirky, Sweedish-designed hatchbacks and convertibles with FWD and console-mounted ignition switches to an equally quirky customer base that was mostly left-of-center by U.S. standards (Here I go with my hated images and stereotypes, but, in this case, there was at least some truth to it). The formula, though small and unpretentious by the standards of huge companies like Toyota and GM, worked. Saab essentially satisfied its small customer base.
Then GM decided to expand even more by buying the company up, decided that its unique Sweedish products were too expensive to produce and didn't sell enough, changed the basic design of its vehicles to GM world-platforms shared with Opel, Chevy, Cadillac, and Saturn, eliminated the hatchbacks, and tried to force those new, "world" Saabs onto a customer base that didn't particularly want them, and clearly preferred the old Saab products. Later, GM acquired an interest in Subaru (since sold to Toyota) and introduced the ill-fated 9-2X, a redone Impreza and WRX, and the 9-7X, a redone Chevy Trail Blazer with some Saab touches. The 9-2X, being essentially a Subaru product, gave Saab a Japanese-reliable AWD vehicle, but was not particularly popular....customers saw they could get the same thing (Impreza) at a Subaru shop for a lower price than Saab was charging, albeit with a little less trim. The 9-7X was a flop from the start...........Saab's customers, for the most part, are simply not interested in SUV's.
So..........I could go on and on, but I think the main problem is that Lutz & Co. simply don't want to admit that what they did in taking over Saab and completely redoing its vehicles was a mistake. They are trying to "justify" their marketing moves by creating imaginary reasons for continuing them.
What Saab needs to do is to is, like Saturn, be returned to the company...and customer base..... it was in the early 1990's. GM, likewise, ruined the excellent Saturn company of the 90's with its post-1999 marketing, but also refuses to admit that as well.
08-02-08, 08:05 AM
#6
Lexus Fanatic
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Saab will continue as a very minor player. Their cars are actually very nice though, but not 'special' enough IMO to become more popular.
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08-03-08, 08:44 AM
#9
Speaks French in Russian
Of course they cant restore profitability. They tried to make it into something its not. Certain brands should never ever become major players and just focus on its niche (others that quickly come to mind are HUMMER, Mini, Jaguar to name a few). GM once again was looking short term, and not long term. They completely forgot about those who loved the hatchback style and wierd things like the ignition switch in the middle of the console. Hatchback Saabs were clearly the more popular with the 9000 model when they offered it in both a hatchback and a sedan, yet they only brought back the sedan when they introduced the 9-5. ANd to top it off the 9-5 has been unchanged since 1998!!! Thats ridiculous!! I loved the 900 and 9000 Aero's and Viggens (I actually wanted one at one point)!!
Adding a new small SUV isnt going to help their situation. Bring back the hatchbacks, and things people expect from a Saab, then they will have a shot at restoring profitability.
Adding a new small SUV isnt going to help their situation. Bring back the hatchbacks, and things people expect from a Saab, then they will have a shot at restoring profitability.
08-03-08, 11:35 AM
#10
Lexus Champion
The fact that Saab does not have the reputation it has elsewhere in the world in the States does not help, either.
My family's always bought Saab cars but we only use them exclusively for our home in Asia. In Taiwan, this brand has a much greater popularity and reputation compare to the consensus here.
Saab needs to do more advertising and campaigning to boost its image. I remember that it's the only auto company that does open public stunts with its own cars. The stunts I saw were amazing and I don't think they can be replicated by other manufacturers.
If you have no idea what I was referring to, then clearly it's a result of Saab's failure to promote itself as a car company.
Jon
My family's always bought Saab cars but we only use them exclusively for our home in Asia. In Taiwan, this brand has a much greater popularity and reputation compare to the consensus here.
Saab needs to do more advertising and campaigning to boost its image. I remember that it's the only auto company that does open public stunts with its own cars. The stunts I saw were amazing and I don't think they can be replicated by other manufacturers.
If you have no idea what I was referring to, then clearly it's a result of Saab's failure to promote itself as a car company.
Jon
08-03-08, 01:20 PM
#11
I like saabs, but i dont love em, i guess to my they are exactly like vovlvo, have maybe 2 models i like from them but the rest i think are poor and could be made into something better, although i do like the 9-5 and the aero 9-3 but the old saabs i just love, up to 60 in first gear in the old one can't remember the name
08-03-08, 01:36 PM
#12
Of course they cant restore profitability. They tried to make it into something its not. Certain brands should never ever become major players and just focus on its niche (others that quickly come to mind are HUMMER, Mini, Jaguar to name a few). GM once again was looking short term, and not long term.
08-03-08, 02:53 PM
#13
Lexus Fanatic
Nope. That won't do it (see my post above). Image and advertising is not what is going go make Saab a success again. They have the same problem Saturn does.....GM management moved in and screwed up their products. Both companies need to bring back the unique vehcles that made them the successes they were. Advertising won't do it.
08-03-08, 04:28 PM
#14
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I looked at a Saab once that was too much I asked if the drivers seat could recline back a little for comfort the answer was no it was bolt upright darn near 90 degree vertical and hard. Next question Where is the radio? Answer The US Gov. does not allow radio install at the factory. We put in one for you.
THe dealer failed not long after.
THe dealer failed not long after.