Given that the dust is now settling on 2005, the hangovers from new-year celebrations are fading and the personal details have finally been written in to the opening pages of various executive diaries, I thought it might be a good chance to take a look at what Saab need to do in order to improve their lot in 2006.
Saab managed an improvement in sales in 2005, albeit with a reported, though unconfirmed increase in company losses. With several new models released, 2006 looks like a year with real potential for black ink in the accounts ledger and perhaps more importantly, a bit more buzz around the showrooms.
In North America there’s the 9-7x, which should be aiming to solidify a place in people’s minds as a quality alternative premium SUV. The 9-2x, for all its shortcomings, has a role to play in attracting a younger buyer that wouldn’t have considered Saab otherwise. In world markets there’s the new 9-3 SportCombi, which will hopefully win back a few customers that left Saab when the utility factor subsided with the loss of the hatchback models. There’s also the new 9-5 and the V6 range in the 9-3.
So what do you think Saab should be doing in various locations with all these models? What do you think Saab should be aiming for with new models this year? And what of Saab distribution in various markets around the world? What are legitimate targets to be reached in 2006?
Your thoughts are welcome in comments. My thoughts continue below….
Saab has a bigger range here than anywhere else. The biggest challenge for 2006, in my eyes, it getting the message out there to the people and backing the message up with excessively good customer service and after-sales attention. The Born from Jets campaign appears to be making some decent headway in this regard, with enquiry rates reportedly up around 20%.
Saab USA has a limited budget, being the minnow in GM’s range there. It’s important therefore, that they hit home runs with every dollar spent. We, as enthusiasts, know how good these cars are. Unfortunately my impression is that a reasonably large proportion of the world’s most affluent society wouldn’t know a Saab if it ran over them. And this is what has to change.
First up, there’s a groundswell toward alternative fuel technology in the US. I’ve covered it in detail several times previously. Suffice to say, as Saab already has successful E85 and diesel models in other markets, this should be extended to the US. GM are already making more noise about E85 and have a release of the 9-5 Biopower model on the cards. They should be making more noise about this. Recent legislation in the US mandating a doubling of alternative fuel manufacture has handed the big-3, who have had e85 compatible vehicles for years, a real and tangible competitive advantage. Can GM convert on this?
Then there’s the diesel. This is another drivetrain that’s already successful in other markets and should be in the plans for the near future. I cannot understand why it hasn’t been mentioned by Saab USA even once yet. When the diesel revolution hits the US starting 2007 (and it will), it will come from European manufacturers. GM has the perfect product offering in its Saab range and it’ll be an unforgivable misjudgement if they neglect bringing the Saab diesels to market. Not only does it give GM a good entry-level product offering to match those of the Germans, it also lifts Saab’s competitive profile. Surely that’s a win-win.
I’m a solemn believer that a Tallageda run in 2006, featuring all three drive trains (gasoline, diesel, e85), would go a long way toward heping the North American cause. First there’s the motoring press to impress. But more importantly, and unlike previous Talladega runs, there’s unprecedented access to the internet. A major campaign could be organised around this run. In-car cameras, driver’s impressions or diaries updated on a live blog. How about vehicle running stats (speed, economy etc) being updated live, as well as a live running tally of the records broken during the run? The potential for this is limited only by the imagination (ok, maybe the budget too).
I know less about the distribution of dealerships there, but have heard enough in comments over the last 6 months to think that things could improve (couldn’t they always?). The inability to access a dealer is a really sad reason to lose a customer.
Saab’s greatest upside potential for sales and acceptance is still in the US. But the engine room of Saab’s future success lies in Europe. This is where the rubber hits the road, people. Saab’s second and third biggest markets are in Europe and more importantly, Saab itself has its heart and its design centre in Europe.
The goal here is not so much an issue of product awareness. There’s a much higher proportion of Europeans that are aware of Saab vehicles, philosophy, history and culture. The issue in Europe, which has a trickle down effect to the US, is one of product quality. The cars have to turn heads and win hearts. To do that they have to be great performers and match the offerings from a myriad of other sophisticated manufacturers.
Saab has two opportunities every year to win hearts in the European market and 2006 should prove to be a significant watershed in the company’s efforts in this regard. The two opportunities? Geneva and Frankfurt.
Saab has a number of new model proposals on the board for the next 3-5 years and several of these will be released at the Geneva and Frankfurt Motor Salons later this year. Saab needs to leverage the enormous interest in these shows to get these model concepts out there in the biggest possible way and create some serious anticipation within the motoring crowd. There’s the possibility of 3 new Saabs appearing for the first time in 2006. The 9-4x SUV. The replacement for the 9-2x, which until further notice I’m referring to as the 9-2. And finally, there’s the very highly anticipated Sonett concept.
That is one heck of a lot of cannon fodder and it’s crucial that Saab’s design team have these models nailed down tight and kick some goals at these auto shows. They managed to do it several years ago with the 9x, before the rug was pulled out from under them by the beancounters. Here’s hoping they’re able to create that kind of momentum again with the two most important car shows of 2006.
As mentioned before, Europeans know Saabs. Many Europeans love Saabs but have defected to Audi or BMW in the last 5-10 years. The core task of Saab and GM Europe is to win these people back with products that knock their socks off. I suppose, with that goal in mind, the most important task for Saab in Europe in 2006 is to ensure that the updates currently being planned for the 9-3, which we probably won’t see until late 2007, are as neat and seamless a package as possible. This is the core of Saab’s range and I, for one, don’t think the market will take too kindly to a re-model in the same vane as the recent 9-5 update.
The centre of Saab’s improvement potential in Europe lies in Germany. Saab have increased their dealership presence there in 2005 by around 40 dealers. This is a great improvement and should be built upon in 2006 with solid marketing and, again, a strong presence at Geneva and Frankfurt.
The UK market enjoyed record-setting growth in 2005 and I’ve got no doubt that Saab will be looking to consolidate that growth in 2006. Sweden itself may be a tougher proposal, though the SportCombi should help a lot in that regard.
Saab is such a small blip on the motoring radar here and Australiasia is such a small blip on GM’s radar that it’s hard to know where to start. The recent pricing strategy changes here in Oz are a good decision. The real issue here is the dealership network and support structure, which was basically decimated after being fully transferred to GM management in the last 18 months.
Australiasia has absolutely no bearing whatsoever on what models are developed, so an improvement in marketing and dealership networking is the only way that market share can increase here. Here’s hoping that Saab Australia can get the resources it needs to do something substantive.
As for the rest of Asia – well, I’m basically clueless about that. I’ll be honest. Any readers from the region are welcome to input their thoughts in comments.
2006 should be a great year for Saab. The basics are there and the expectations for new models are high. It’ll be the first full year for Sport Combi sales and the interest in Biopower is through the roof in Sweden, though possibly at the expense of regular Saab sales.
Saab’s continued existence (regardless of ownership) depends primarily on one issue – a return to profitability. This depends on product, marketing and the ability to sell and service customers. I’m a firm believer that the cars are there to do the job this year, and that Saab has the potential to create the buzz that it needs via new releases at the car shows. It’s up to GM and Saab to pull it off. I really think the potential’s there to do so. It’ll be a very interesting year as we all watch it unfold.