Saab in 2006

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….

North America

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.

Europe

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.

Australisia

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.

Conclusions

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.

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8 Comments

  1. I think Saab should expedite some changes in the 9-7x that will make it more appealing.

    1. Finish the body of the car to full Saab standards — that will appeal to true Saab users more…and distinguish it further from the crowd.

    2. Introduce a Turbo 6 cylinder that optimizes fuel efficiency with power, emphasize torque at low RPM range.

    3. Implement true Saab seats and further Saab interior elements that are still missing.

  2. Bring on that TiD with 150bhp and 236 ft/lb of torque as a new base model for the 9-3SS it would sell like crazy. I would definitely buy one!!! Its the model responsible for the huge sales increases in the UK, along with the 9-5 Aero funnily enough. I dont expect stellar sales of the 9-5 anymore – its butt ugly, IMHO. Where did the classiness go, looks like a Chevy Impala!?

    What Saab really needs to do to increase sales is sell cars that are just that little bit different. A 9-4X crossover vehicle would be a great place to start. Put in the new Fiat TD engine that produces a whopping 180bhp into the 9-3 (dare I say 9-5 as well?). Put BioPower engine in the 9-3. Introduce a Saab 2 seater a la Pontiac Solstice. But most importantly get the quality right and stop any further intrusion into the Saab range of that god-awful 9-5 front end. It looks WAY DOWN MARKET! If Saab put that butt ugly front end on the 9-3 my 23 year love affair with Saab is definitely over!!!

    Why do Saab always come up with these inoovative ideas eg SVC, Bipower with 300bhp and then not bother to do anything with them. Wouldnt it be better to use that money to improve quality to build a 9-3 with A4 quality?

  3. For this year, Saab’s marketing should focus E85 and 9-3 SportCombi.
    Also marketing should be aimed towards Europe as exchange rate is killing USA sales profit.

    For products I dont say anything as we already know quite well what there is coming and it aint coming this year so pointless to talk about it.

    As marketing tricks I would do Tallageda.
    But what I’m also missing for is running Saab Hirsch in Nordschleife 20km track. Make a good laptime, make a good quality video. It would spread like ebola.

    And it would make marketing impact where most needed as some *PIIP* think that FWD car is unable to go fast in corners….

    Think how much that tiny video of Saab performance team doing few tricks spread? And then think some 8min video with good editing, it would be killer and very cost effective.

  4. I can provide some feedback on some aspects of Asia (I live in Hong Kong). Saabs are more or less non-existent here. Most folk view them as something that Ex-Pats drive – and quirky ex-pats at that. I’m not even sure its considered a luxury marque – most people I know either haven’t heard of it, or consider it more along the VW/Skoda level. Basically, they’d never take a Saab over a Benz or a BMW. This, compounded with (or perhaps leads to) the brutal resale value of Saabs – I’ve seen year old 9-5’s sell for less then 5 or 6 year old 5 Series.

    Basically, I think Saab would be insane to focus on the Asian market, they have no penetration, and they’re not in any position to make a big push. Focus on the European/American markets.

  5. I`m beginning to sound like a broken record but here goes again…

    whatever shortcomings may be perceived in the 92x s bloodlines, it has none as a car. It may well be the best WRX money can buy – but what is wrong with that?

    less time postulating – more time driving and you may see the light.

    PS – Hong Kong is all about BLING. CASH. SWING….call want you want but MB + BMW own the turf because they represent status. No sane person needs a car in HK anyway.
    BTW – was there two weeks ago and had a look at the new 93s/combi in the Saab showroom. it is a pretty sweet little thing.

    Mahalo

  6. Pete, we’re always going to fall on opposite sides of the fence with that one. Fine car – yes. Good idea for Saab – possibly. Well executed – hell no.

    Crikey, now I’m sounding like a broken record!!! Just hope it’s not one of those Parton/Rogers country things.

  7. just as long as we both remember when to hold`em, when to fold `em and when to walk away.

    on tour at the moment mate – two weeks snowboarding in the land of the rising sun. heading up to hokkaido tomorrow. Off the air as a result – and not missing it a bit!

    BTW – did you get GMs latest financial reports on the news down there? Fifth quarter loss in a row. Not happy Jan.

    cheers,

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