Would you still sell SAAB?

[Z-06]

WSJ - Saving Volvo and Saab

One in every five cars sold in Sweden last year was a Volvo and Saab is the exclusive supplier to King Carl XVI Gustaf. So Sweden was never likely to abandon its two famous marques entirely to the mercies of parent companies Ford and General Motors. But while Thursday's promise of a 28 billion Swedish kronor ($3.44 billion) aid package offers Sweden's car-makers a lifeline, it may not be enough to ensure their long term survival.

The Swedish car industry needs all the help it can get as the parent companies of Volvo and Saab look for a bailout. One in every five cars sold in Sweden last year was a Volvo.

With the U.S. rescue plan for GM and Ford stalling in the Senate and more than 150,000 Swedish car industry jobs on the line amid falling sales and mounting losses, the Swedish car industry needs all the help it can get. Of the total package, SEK20 billion is in credit guarantees for loans to help fund environmentally-friendly research. And SEK3 billion is for a government-run company to conduct research and strengthen competitiveness.That's good for the long-term viability of the companies, especially when added to the billions already spent by Ford and GM on new models and green technologies, such as biofuel. At the same time, the government has provided a further SEK5 billion in rescue loans to help the companies stay afloat long enough to restructure or liquidate.

But if Ford and General Motors are forced to sell, this aid package will not be enough to allow Saab and Volvo to survive as standalone businesses and may not be enough to attract bidders. All the European manufacturers have more or less ruled themselves out. The best hope is an Asian buyer, most likely an Indian or Chinese car-maker, although this too looks like a long shot.

Volvo's unique selling point used to be its safety, but as standards have risen across the industry, this advantage has eroded. The brand now falls between stools: its record 458,323 cars sold worldwide in 2007 was well below that of a true volume producer such as Volkswagen which sold 3.66 million cars in the same period, but too few to be considered a specialist player. Saab, which sold just 125,000 cars in 2007, could just about qualify as a niche player but lacks Volvo's attractive large US dealer network.

Volvo and Saab's best chance may lie in a GM and Ford firesale. As every car dealer knows, the best way to shift stock is to knock a few zeroes off the price.

[Croc]

As the article mentions: SAAB lacks a large dealership network. Why GM hasn't rectified this is a mystery to me.

[Z-06]

As the article mentions: SAAB lacks a large dealership network. Why GM hasn't rectified this is a mystery to me.

I agree. I can see SAAB as a alternative fuel niche brand. I like their ideas of bio fuel, and other concepts they introduce. Saturn and Hummer on the other hand bring nothing to the table. Dealership sucks bad for them. One in Orlando is near boon dogs, and one in Tampa is near a landfill.

Talk about the BS saturn people call about their retention being high because of their "dealership experience". The brand got hammered in the retention survey that was released yesterday.

[ZL-1]

As the article mentions: SAAB lacks a large dealership network. Why GM hasn't rectified this is a mystery to me.

Because GM never had a clue on how to manage and develop a brand like SAAB?

Edited December 12, 2008 by ZL-1

[Croc]

Because GM never had a clue on how to manage and develop a brand like SAAB?

But I don't think giving SAAB more dealerships is really "managing" or "developing"...it's more like "HELLO PEOPLE WANT TO GIVE YOU THEIR MONEY AND CANNOT EASILY!"

[ZL-1]

But I don't think giving SAAB more dealerships is really "managing" or "developing"...it's more like "HELLO PEOPLE WANT TO GIVE YOU THEIR MONEY AND CANNOT EASILY!"

It would have been if it was paired with Cadillac on a premium-luxury channel: minimum (barely incremental) investment and additional coverage. But again, GM never knew what to do with SAAB: they bought it, as little kids say, "just because".

Edited December 13, 2008 by ZL-1

[smk4565]

I'd sell Saab for $1 if I could find a buyer for it. All it does is lose money.

[enzl]

I'd sell Saab for $1 if I could find a buyer for it. All it does is lose money.

Unfortunately, GM's probably paying someone to take it...a $1 for Saab would be way too much for a buyer to pay.

[balthazar]

Fascinating theory that saab is sales-hampered due to a lack of dealerships, because the product is 'all that'.

Edited December 13, 2008 by balthazar

[daves87rs]

I'd still sell SAAB...there is money best spent elsewhere...

[regfootball]

there is no harm in saab being marketed in the cadillac channel. and it could survive with a 9-3 (hatch/sedan/wagon/CVT), 9-5 (sedan and wagon)(both of which would be getting smaller, right?) the 9-4x, and IMHO saab needs the aero-x or that other concept roadster, badly. saab took a major hit during the SUV time by not having a full size family hauler but methinks there just isn't that large market anymore for fringe players like saab.

saturn should become the 'pesky' niche brand again maybe. become creative with saturn, sell it in malls, downtowns, or added onto chevy or BPG or caddy where it makes sense to mix product. saturn should be brought to the customers. maybe a handful of full dealers and then rely a lot more on creative sales outlets. as an example, why not rent stores in malls, right next to the apple computer stores. if the saturn product was right, it could begin to draw off that crowd. or, the downtown business crowd, just get the effing product in high traffic areas!

saab though, needs to be in a dealer network and to me it needs to be caddie's rogue little cousin. they need fresh product and more sensible prices!!!!!!!!!!

and with saab staying fwd based, really, that leaves cadillac off to start with the new BLS alpha and then CTS. Caddy badly needs a fresh DTS flagship (which i would make AWD standard)

BLS rear or all wheel drive. in the US, sedan maybe only. maybe a coupe or hatch too.

CTS rear or AWD. volume line. sedan, wagon, coupe.

DTS/STS combine the line. DTS is luxury trim, STS is sport trim. large!

SRX stays i guess! even though its a tad weak to me. Escalade looks like it's moving to lambada? i think a seriously upscale 2 row crossover above the SRX would work for caddy if it had style and performance. think cayenne competition but not so ugly and fat.

I would revive the XLR on sigma or alpha and just provide a kick ass 2 seater with top level performance but not on corvette chassis unless it made more sense. the price needs to come down on that one.

i still say hummer has viability! H4 needed to come online and H3 needs an interior infusion and gas mileage infusion.

Edited December 13, 2008 by regfootball

[frogger]

Sell it.. GM doesn't have the resources to make or keep it competitive.

[ZL-1]

there is no harm in saab being marketed in the cadillac channel. and it could survive with a 9-3 (hatch/sedan/wagon/CVT), 9-5 (sedan and wagon)(both of which would be getting smaller, right?) the 9-4x, and IMHO saab needs the aero-x or that other concept roadster, badly.

I'd do a full 9-3 range on Delta II (would there be a need for a 9-4X in this context or would a X-Over at around 4.6m long do the trick?) and the 9-5 on SWB Epsilon II.. The roadster would be FWD-based: a modern day SAAB Sonnet would be very cool!

EDIT - Unfortunately, I think SAAB will die.

Edited December 13, 2008 by ZL-1

[aldw]

GM is honestly better off selling SAAB at this point, the money crunch simply exacerbates the problems of lack of brand focus.

[smk4565]

there is no harm in saab being marketed in the cadillac channel. and it could survive with a 9-3 (hatch/sedan/wagon/CVT), 9-5 (sedan and wagon)(both of which would be getting smaller, right?) the 9-4x,

saturn should become the 'pesky' niche brand again maybe.

saab though, needs to be in a dealer network and to me it needs to be caddie's rogue little cousin. they need fresh product and more sensible prices!!!!!!!!!!

and with saab staying fwd based, really, that leaves cadillac off to start with the new BLS alpha and then CTS. Caddy badly needs a fresh DTS flagship (which i would make AWD standard)

BLS rear or all wheel drive. in the US, sedan maybe only. maybe a coupe or hatch too.

CTS rear or AWD. volume line. sedan, wagon, coupe.

DTS/STS combine the line. DTS is luxury trim, STS is sport trim. large!

SRX stays i guess! even though its a tad weak to me. Escalade looks like it's moving to lambada? i think a seriously upscale 2 row crossover above the SRX would work for caddy if it had style and performance. think cayenne competition but not so ugly and fat.

I would revive the XLR on sigma or alpha and just provide a kick ass 2 seater with top level performance but not on corvette chassis unless it made more sense. the price needs to come down on that one.

i still say hummer has viability! H4 needed to come online and H3 needs an interior infusion and gas mileage infusion.

First off, Mercedes dealerships are stand alone, Cadillac should be also, Saab's image doesn't fit Cadillac's and would be a distraction in the dealership. Second, there is no money to make Saturns and Hummer, they have to file bankruptcy in 3 weeks, making new Hummers and Saturns isn't happening.

About Cadillac, this is where GM needs massive investment, the 08 Malibu cost $500 million to develop. That was just an upgrade of an existing platform, using already existing engines, etc. It costs Mercedes over $1 billion to make a new S-class, and some stuff they can recycle. Cadillac has to start from scratch, it could cost $1.5 billion easily to make an S-class competitor, another $1.5 billion or more to do the BLS. To upgrade the CTS to get it to 5/E/A6 class could take another $250+ million if done soon. The XLR's problem isn't price, it is that it sucks. So that is another $250 million or so to fix it. Plus the SRX and Escalde will need work.

Cadillac needs $4-5 billion in 2009 and 2010 just to catch up to Mercedes, which is about 35-40% of GM's entire R&D Budget. If Chevy takes 50% (they do 75-80% of sales) only 10% is left for the other 6 brands combined.

[balthazar]

>>"there is no harm in saab being marketed in the cadillac channel"<<

saab is not a premium brand in either reality or image. Helplessly mired in self-parody of their own '80s, half a line of rebadges, the rest FWD- dead weight, just about worthless from any standpoint. Sell it sell it sell it.

[FUTURE_OF_GM]

Re: SELLING SAAB & VOLVO:

No, I would not... But that's because I see the potential of the divisions and I want GM to maintain at least 6 divisions and Ford 4 or 5.

The new GM needs to mirror the old GM, except with different focus. Chevrolet = volume, Cadillac = top tier luxury, Buick/GMC = mid-lux, Pontiac= performance and either Saab or Saturn needs to = small cars and technology.

Ford needs to look like this; Ford = volume, Lincoln = top tier luxury (Yes, it will take while) Mercury = small cars and technology, Mazda = performance and Volvo = mid-lux.

I don't think it is wise for GM to downsize to 4 divisions and Ford 3... As it is, Pontiac's survival still isn't guaranteed and neither is Mercury's. Not to mention, if this happens, the media will work EXTRA diligently to kill Pontiac and Mercury.

And before anyone thinks I did a "360" about Saab... Bear in mind the context of the argument. My anti-Saab and anti-Saturn sentiment was because these divisions were being valued AT THE EXPENSE of Pontiac. But now that Pontiac is saf(er) I think we can focus on these two.

P/B is the first priority, then Saturn and Saab.

As the article mentions: SAAB lacks a large dealership network. Why GM hasn't rectified this is a mystery to me.

I think GM should adopt my plan (in the To GM section) and combine Saab and Saturn into one sales channel.

P.S. according to griffon, GM's plan said that if it sold Saab, it would only sell 50% anyway.

Edited December 14, 2008 by FUTURE_OF_GM

[buyacargetacheck]

GM has lost $$$ in nearly every year in the 18 years GM has owned/partially owned Saab Cars. The real question is: why wouldn't GM sell Saab and why hasn't it already done so?

There's a reason why Saab and Volvo both sold their car divisions: they're money losers with no future. This was just as true 10 years ago as it is today. GM and Ford gave it their best shot and failed. Had they not stepped in the Swedes would have been gone long ago.

[ZL-1]

GM has lost $$$ in nearly every year in the 18 years GM has owned/partially owned Saab Cars. The real question is: why wouldn't GM sell Saab and why hasn't it already done so?

There's a reason why Saab and Volvo both sold their car divisions: they're money losers with no future. This was just as true 10 years ago as it is today. GM and Ford gave it their best shot and failed. Had they not stepped in the Swedes would have been gone long ago.

They've lost plenty of money in NA too, so why not break the NA operations apart and sell it off in pieces?

[FUTURE_OF_GM]

They've lost plenty of money in NA too, so why not break the NA operations apart and sell it off in pieces?

Going forward, the profit potential for Saab will grow IMO.

Opel basically runs Saab now (For a LONG time, Saab ran itself -- and did a horrible job) But now that the company is finally being integrated into GM, I think the potential is there.

The question is; does GM have the time and patience to grow the division? (That's the same question facing pretty much every GM division BUT Chevrolet, IMO)

[ZL-1]

Going forward, the profit potential for Saab will grow IMO.

Opel basically runs Saab now (For a LONG time, Saab ran itself -- and did a horrible job) But now that the company is finally being integrated into GM, I think the potential is there.

I don't know if want a SAAB completely folded into GM... Using GM's engineering and production resources is great, and it helps to lower SAAB's breakeven point, but there has to remain something unique to it. It cannot be run as an old-GM brand. To me SAAB would be today's "young turks" brand, but with a focus in environmentally-friendly luxury and performance. Something Cadillac (as well as the BMW/Mercedes/Audi trio) cannot replicate.

The question is; does GM have the time and patience to grow the division? (That's the same question facing pretty much every GM division BUT Chevrolet, IMO)

And, more importantly, the money to do it? I agree that in essence only Chevrolet seems to be safe. Even Cadillac is pretty much non-existant outside of North AMerica and lacks the reach a global company like GM shoule have on the premium-luxury segment...

[Teh Ricer Civic!]

Sell it off. Focus on core brands. Build those back into powerhouses before you screw around with niche stuff.

[regfootball]

gm keeps saab or they lose any sales in 'scandinavia'.

[buyacargetacheck]

Opel has been selling cars in Sweden, Norway, Finland and Denmark (Scandinavia) for many years.

gm keeps saab or they lose any sales in 'scandinavia'.

[balthazar]

>>"My anti-Saab and anti-Saturn sentiment was because these divisions were being valued AT THE EXPENSE of Pontiac. But now that Pontiac is saf(er) I think we can focus on these two."<<

WTH ?? There's no potential. 'Loyalists' will not allow saab to progress at the 'expense' of 'saab's character/quirkiness', whatever that means. Fold saab money immediately into the other core divisions.

[FUTURE_OF_GM]

>>"My anti-Saab and anti-Saturn sentiment was because these divisions were being valued AT THE EXPENSE of Pontiac. But now that Pontiac is saf(er) I think we can focus on these two."<<

WTH ?? There's no potential. 'Loyalists' will not allow saab to progress at the 'expense' of 'saab's character/quirkiness', whatever that means. Fold saab money immediately into the other core divisions.

The potential in Saab is; 1) that it is NOT a traditional domestic division and 2) It already has a solid foundation for green technology.

GM needs to retain at least ONE division that does not carry baggage. So, either Saab or Saturn must stay IMO. Saturn has the most potential for volume, but Saab is correctly positioned to be perfectly integrated into GM. (Something Saturn, it's overlapping models with Chevrolet and now Buick and it's stand alone dealers is not capable of) Not to mention, Saab is already global and honestly, as well off or better than Cadillac in that respect.

Loyalists should be ignored.

We're all GM loyalists and we're consistently ignored. 'Loyalists' are a niche that, at this time, GM cannot afford to cater to. GM needs volume car hits and luxury division expansion in order to survive.

Edited December 15, 2008 by FUTURE_OF_GM

[balthazar]

>>"2) It already has a solid foundation for green technology"<<

Just as many have suggested -say- 'the Enclave could easily be moved to Cadillac', green tech is much EASIER to move, as it is the property of no one division.

And being a GM enthusiast, WRT the sheer number & types of vehicles, is nothing like being a saab enthusiast- which is basically 1 vehicle with the same specs as it had 20 years ago, morphed into a few others.

saab has the baggage of being an also-ran that couldn't compete on it's own at it's peak in the '80s, and has shrunk considerably in appeal since.

[vonVeezelsnider]

The potential in Saab is; 1) that it is NOT a traditional domestic division and 2) It already has a solid foundation for green technology.

GM needs to retain at least ONE division that does not carry baggage. So, either Saab or Saturn must stay IMO. Saturn has the most potential for volume, but Saab is correctly positioned to be perfectly integrated into GM. (Something Saturn, it's overlapping models with Chevrolet and now Buick and it's stand alone dealers is not capable of) Not to mention, Saab is already global and honestly, as well off or better than Cadillac in that respect.

I'm with ya FOG, if I had to pick one of the two to stay I would pick Saab without hesitation.

[ZL-1]

I'm with ya FOG, if I had to pick one of the two to stay I would pick Saab without hesitation.

Another idea for an ideal World is the idea of SAAB positioned in parallel with Buick. It could work very well: 2 brands between Chevrolet and Cadillac, one offering an American-premium "flavour", the other Scandinavian-premium "design appeal".

[FUTURE_OF_GM]

I'm very torn on the issue... All I know is that GM needs to maintain 6 divisions, if for no other reason than company morale.

I'm glad I don't have to make the decision between Saab and Saturn because it would be a hard one.

What it comes down to is GM's future business plan, IMO. Does GM want to attack the market with 2 volume divisions; Chevrolet and what they were trying to grow Saturn into with the latest products. Or, is GM content with pumping most of their volume through 3 (or 4 if you count GMC) global brands. I do believe that one of Saturn's major downfalls is it's tiny (relatively speaking) dealer network.

If GM wants 2 volume divisions, then Saturn must stay and be given the opportunity (read, more than 5-7 years and a lot of money) to grow. If GM wants to support certain niches of the market, then Saab, along with Pontiac on the other end of the spectrum, might be the better candidate given it's global status, potential for ROI and potential to expand.

Heck, Saturn could even be turned into a niche brand as well if GM had the patience... In my "GM Plan version 2.0" in the To GM section, I outlined what I would do with the two companies. I would leave Saab as is (with it's planned product and direction) turn Saturn back into a small car specialist with a line topping Astra and combine the two franchises into one dealer channel. That way, they could prop each other up and hopefully plant the seeds for expansion. Or, GM could eventually bundle the whole thing up and sell them both if things keep getting worse.

Edited December 16, 2008 by FUTURE_OF_GM

[saturnd00d]

I don't honestly see the need for Saab in N/a. Still too much overlap in terms of pricepoint with Buick, Cadillac. Everyone that I've talked to in the past regarding Saab always states the same thing. Who wants to spend that kind of money on a car with a 4 cyl turbo, as opposed to a car from another company that would come with a V6 standard? That's where I think the problem lies, is that Saab's pricing is horribly off. Here in Canada anyways, they cost a fortune, and if you can pony up the money to even buy one, you'd be starting at lower features for the money than a competing car.

I still think GM is missing the ball with their restructuring. Times are tough and not as many people out there are buying like they used to. Why focus on so many brands that have mid-tier cars with V6's and fuel economy that is average across the model line, when what really hurts them (especially in times like now) is their lineup of smaller and more fuel efficient cars. I appreciate the BAS hybrids and 2-mode technology, etc, but we need that sort of technology in good quality smaller cars as well. I'm willing to bet that premium small cars that offer hybrid technology, or diesel powertrains, or turbo-4's would have a significant place in the market. Think of all the students who drive to school, or the middle-class family members who want a small car as a secondary commuter car, or what have you.

This is where I think GM should return Saturn to. Have a lineup closely mimicking Opel such as with a Corsa, Astra (Hardtop, convertible, 3 and 5 door, and wagon), Meriva, Antara (our current Vue) and call it quits. Nothing bigger than Vue. Market it, I mean really market it, not just with cheap &#036;h&#33; yahoo online ads. If anyone wants sedans, go over to chevy, if anyone wants V6 midsized cars, see Chevy or Buick, etc.

This way, people can have premium offerings to the same boring Chevy stuff rotting (er sitting) on the lots right now. There IS still a small market for a compact wagon (Astra wagon, Focus wagon), convertibles (remember cavy and sunfire convertibles?), small MPV type cars (think Mazda 5 competitor, bit larger than HHR), and of course a smaller wheelbase CUV (like the Vue is currently). Of course, GM won't keep Saturn because without having a proper goal for Saturn, they will shoot themselves in the foot yet again.

I agreed for GM to move Saturn upscale, but not to the extent of competing with Buick cars. I just want GM to offer people a good quality small car lineup with better materials and fit 'n finish than the basic Chevy stuff that people would not otherwise buy if it weren't for the low prices of them.

But go ahead GM, focus on bigger cars and trucks, like you have been this whole time. That's going to turn things around for you for sure, just like it has been for decades. Sometimes you Americans really crack me up with your constant need for bigger, more powerful, more premium cars while at the same time always trying to find the best deal. So yes, save all the premium divisions, the ones that will continue the in-fighting, and starve your small car offerings, like you always have. Maybe when the next gas crisis hits, you might get it then.

Hard to ask?