CEO of GM's Saab sees stagnation in 2008

[BigPontiac]

Article

CEO of GM's Saab sees stagnation in 2008 -magazine

Sat Feb 9, 2008 12:06pm EST

FRANKFURT, Feb 9 (Reuters) - Unprofitable Swedish carmaker Saab expects unit sales to stagnate this year, the head of Saab told Germany's auto, motor und sport magazine, which reported the General Motors (GM.N: Quote, Profile, Research) could turn profitable in 2010.

Saab sold 125,000 units worldwide last year, less than the 133,00 it sold in the previous year, the magazine said on Saturday in an advanced abstract.

"We expect roughly the same scale for 2008," Jan-Ake Jonsson told the German magazine. "It is our target to sell 150,000 to 200,000 units per year. But in order to reach such annual sales we need the new models," he said.

Saab had said earlier it could reach break-even with annual sales of 180,000 units, the magazine said, adding that the benchmark would only be reached in 2010, according to internal plans.

Saab suffered a 6.1 percent drop in 2007 sales in Europe to about 84,900 cars.

In 2007, Saab fell short of is own targets, which Carl-Peter Forster, president of General Motors Europe, had lowered to 160.000 to 170,000 units in June last year, according to an earlier media report.

Earlier targets set by Forster's predecessor Peter Augustsson, who left the company in March 2006, aimed to sell 250,000 units per year, the media report had said.

[Intrepidation]

What do they expect without any new product and 3 models? The newest thing they have is the MCE 9-3.

[ZL-1]

What do they expect without any new product and 3 models? The newest thing they have is the MCE 9-3.

QFT

The 9-5 is a dinossaur. 9-7 and 9-2 were never relevant because they were 'GM old think'. Brands with a global foot print should get better attention from GM.

On another note, I could have sworn I read 150K break even point...

EDIT - they should put me in charge of Saab

Edited February 9, 2008 by ZL-1

[Cory Wolfe]

Well, if GM wouldn't starve it...

[Intrepidation]

"Let's show some concepts to demonstrate the idea that we care but take forever to actually put anything into production. That'll generate sales!"

[FUTURE_OF_GM]

Yep...

That's right GM...

Giving GME power here in GMNA is an EXCELLENT idea!

It's too bad Saab didn't die instead of Oldsmobile.

Edited February 10, 2008 by FUTURE_OF_GM

[Cory Wolfe]

Yep...

That's right GM...

Giving GME power here in GMNA is an EXCELLENT[/i] idea!

It's too bad Saab didn't die instead of Oldsmobile.

The only brand that should have died in its place was Saturn. Saab, whether or not you care to notice, has a history, too. This is nothing about giving GME more power... It's about not starving a brand, the cause of which is not positive for GM. As the saying goes, you get what you give, and GM isn't giving Saab much and not getting much in return. Well duh...

[FUTURE_OF_GM]

The only brand that should have died in its place was Saturn. Saab, whether or not you care to notice, has a history, too.

Yep, a history that I care nothing about.

I'm not anti-Saab; never have been. I just think it was stupid to kill a perfectly healthy brand and continue one with less volume that has never made a profit for it's parent company. That's just common sense and business basics.

This is nothing about giving GME more power...

If GME can't make money with a division as simple as Saab, how is their leadership (supposedly influencing GMNA and succeeding Lutz) going to manage the multiple divisions here and deal with the damage done to those divisions from years of criticism?

It's about not starving a brand, the cause of which is not positive for GM.

I agree... But there are more important divisions. 150,000 units for a global division is barely enough to justify it's existence, if it even does.

As the saying goes, you get what you give, and GM isn't giving Saab much and not getting much in return. Well duh...

I agree there too.

But I have a major problem with the projections. If they only want to sell 150,000 units, then what's the point? Especially for one of GM's supposed 'expansion brands' (Cadillac, Hummer, Saab & Saturn)

[VenSeattle]

But in order to reach such annual sales we need the new models," he said.

This is true for almost any brand. SAAB, YES! For Oldsmobile, it wasn't the product that was the problem.

For fairness, GME hasn't had control over SAAB for very long. It'll take the next generation of SAAB products to determine if GME knows how to manage other brands beside Opel/Vauxhall. If Saturn is now managed by GME, so far, the new product isn't lighting up sales charts in its home market. For the sake of GM's NA market share and the Saturn brand in general, let's hope the product catches on soon.

[RJB]

I'll take a 9-4X, that to me is one nice looking Saab! Too bad that it will probably be a starting price of $40,000 just because of the Saab name. If they could cut down their prices a little bit I think more people would be inclined to buy Saab's. I mean come on you can option out a 9-3 sport combi up to almost $50,000...yikes!! Relying just on the Saab name unfortunately can't command these prices anymore, they just don't have that panache.

[Brougham-Holiday]

It's too bad Saab didn't die instead of Oldsmobile.

Agree 100% How do you keep a brand with such low sales and kill a brand selling 2-3 times as many cars. Only GM.

[regfootball]

saab cut your prices and bring out new models!

saab needs an all new 9-3, 9-5, 9-2, 9-7, 9-4 and aero x / sonnet

its gm's own fault if their sales are low.

i read that saab is planning to expand sales in russia

[ZL-1]

saab cut your prices and bring out new models!

saab needs an all new 9-3, 9-5, 9-2, 9-7, 9-4 and aero x / sonnet

its gm's own fault if their sales are low.

i read that saab is planning to expand sales in russia

No price cutting. Discounting itself and destroying brand hierarchy (which has to be reflected in prices) is the reason GM got into the trouble they have.

They'll get new product. I wonder if a nice Gamma-based 2 seat convertible with turbo engines could make an interesting Sonnet

I have to check for numbers later, but Saab's reportedly doing well in Eastern Europe as a whole. IIRC around 50% of the forecasted volume growth in Russia in premium brands (Saab-Cadillac-Hummer) will be Saab. Adding 10K/year on Russia alone would be very important for Saab's future.

[RJB]

No price cutting. Discounting itself and destroying brand hierarchy (which has to be reflected in prices) is the reason GM got into the trouble they have.

They'll get new product. I wonder if a nice Gamma-based 2 seat convertible with turbo engines could make an interesting Sonnet

I have to check for numbers later, but Saab's reportedly doing well in Eastern Europe as a whole. IIRC around 50% of the forecasted volume growth in Russia in premium brands (Saab-Cadillac-Hummer) will be Saab. Adding 10K/year on Russia alone would be very important for Saab's future.

Sales over there doesn't justify sales here, so how are they going to keep Saab afloat in N.A.? Just because they are selling 10mil in Russia and 1,000 cars here will be a big problem in the future. That is why they are discounting Saab's so much here, no one is buying them like they used to. In a way GM cursed Saab but helped them at the same time by injecting better quality, but I think alot of diehard Saab buyers walked away when they found out GM was buying them up.

[ZL-1]

Sales over there doesn't justify sales here, so how are they going to keep Saab afloat in N.A.? Just because they are selling 10mil in Russia and 1,000 cars here will be a big problem in the future. That is why they are discounting Saab's so much here, no one is buying them like they used to. In a way GM cursed Saab but helped them at the same time by injecting better quality, but I think alot of diehard Saab buyers walked away when they found out GM was buying them up.

The American market isn't growing, Russia and other emerging markets are, so those markets are more relevant (strategically) than America.

EDIT - In M&A talk those markets represent future growth opportunities.

Edited February 12, 2008 by ZL-1

[FUTURE_OF_GM]

For fairness, GME hasn't had control over SAAB for very long. It'll take the next generation of SAAB products to determine if GME knows how to manage other brands beside Opel/Vauxhall.

Meh... Sorry, Zeta hasn't been in NA longer than a few weeks, yet it seems to be doomed already because of a "poor performance" Am I going to cut GME some slack? I don't think so...

GM needs to learn that politics can come from both sides of the pond.

[buyacargetacheck]

Time to cut this loser loose. Maybe Ford can take it off GM's hands with some of its Tata money, combine it with Volvo Cars for economies of scale, and then sell Swedish Motors off to the next sucker. What a giant gd waste of money.

[-Camaro-]

All they have to do is improve their operations. Selling more would be nice, but you don't need to sell a lot to become profitable. There are many companies that sell in low volume and make a profit.

[buyacargetacheck]

What other car company sells 125,000 vehicles worldwide in the $30-40K range and makes a profit? I don't know of one.

Take a few minutes to read one of the funniest car stories I've read. This is the great legend of Saab that GM is blowing wads of cash on every year in hopes of making a BMW. Fat chance. Enjoy.

http://www.caranddriver.com/reviews/hot_li..._opener_feature

All they have to do is improve their operations. Selling more would be nice, but you don't need to sell a lot to become profitable. There are many companies that sell in low volume and make a profit.

[enzl]

Here's how you save them:

Build the 9-1 in the States...a full line-up of 900 inspired, Delta sized (& exported) in the spirit of the latest showcar.

Instantaneous +100k sales & a way for GM to make money making small cars in the states... I just don't see the world needing 2 more sets of EpII's at $30k+. And a Vue in drag. Just MO.

[turbo200]

right, so this isn't newsworthy. this is known and is well expected since they are basing thier sales on product that is all at least 6 years old in terms of engineering at least.

What's newsworthy is how much mileage Saab is getting out of this new look. I'm starting to see 9-5 wagons, 9-3s popping up everywhere. and the sportcombi has always been kind of a sleeper hit.

I

[buyacargetacheck]

Sounds good until you factor in the higher cost of production in Europe, and then you're back at square one making no profit. If you produce it in the US or Mexico does the car retain its Swedishness? What is "Swedishness" anyway? Do enough car buyers even care? So what's the point?

Saab will never make any great sums of profit nor will it make up for all the money lost over the years. Money pit. Money loser. Cut your losses GM.

Here's how you save them:

Build the 9-1 in the States...a full line-up of 900 inspired, Delta sized (& exported) in the spirit of the latest showcar.

Instantaneous +100k sales & a way for GM to make money making small cars in the states... I just don't see the world needing 2 more sets of EpII's at $30k+. And a Vue in drag. Just MO.

[regfootball]

Here's how you save them:

Build the 9-1 in the States...a full line-up of 900 inspired, Delta sized (& exported) in the spirit of the latest showcar.

Instantaneous +100k sales & a way for GM to make money making small cars in the states... I just don't see the world needing 2 more sets of EpII's at $30k+. And a Vue in drag. Just MO.

saab needs a volume car, absolutely.....one reason why i say saab needs a couple models to fall in between vw and acura, something to compete with jettas and passats up through the tsx and tl.

saab can never be a BMW beater, and it doesn't need to be. cadillac is evolving hopefully to compete more with bmw, but saab should not be saddled with the weight of having to match BMW tit for tat. Saab still needs a game changing 9-5 that should totally kick ass but i don't think the 9-3 needs to go directly against the 3 series. if the 9-3 were more stylish and a better performer than the tsx and passat for a similar price, maybe saab would get somewhere. a 9-1 or 9-2 priced right could really clean up against all the overpriced minis and c30's and a3s and decked out GLI's.

not every single car maker has to be compared to BMW.

or be priced as stupidly. a 135i for 43 grand? nice, but good luck with that.

plus, if saab sells models that do not cross over with cadillac they nicely coexist in the showroom together.

Edited March 29, 2008 by regfootball

[regfootball]

Here's how you save them:

Build the 9-1 in the States...a full line-up of 900 inspired, Delta sized (& exported) in the spirit of the latest showcar.

Instantaneous +100k sales & a way for GM to make money making small cars in the states... I just don't see the world needing 2 more sets of EpII's at $30k+. And a Vue in drag. Just MO.

actually, i think saab would gain major mojo if they built models in Canada.