Last week or thereabouts I had a bit of a crack at Saab USA saying that they were going to have to “extract the digit” (i.e. pull their finger out) if Saab were going meet the global sales expectations that a lot of people have, given the pace being set in Europe. OK, maybe it’s not a lot of people, maybe it’s just me.
Saab Europe are on fire at the moment, up 24% year-to-date. Sales in Sweden are up around 30% over last year. The UK is still experiencing double digit growth as well. In contrast, sales in the US are now on par with last year after a promising January that saw a rise of 34% on January 2005.
What’s more, the US is now coming up to the 12 month anniversary of the Employee Pricing for Everyone sales event, which saw huge Saab sales in June and July. I don’t have the figures handy, but Saab sold upwards of 6,000 vehicles in both June and July of 2005. For reference, June 2004 saw around 4,000 sales.
There’s no major sales event this year like the employee pricing scheme so we can expect some large percentage falls in June and July. I received this email from Saab USA during the week, which goes some way to explaining this whole scenario and their expectations for 2006….
Saw your point about Saab USA sales, which is a good one. We’re the first to admit that May did not entirely pan out for us as we had hoped for. But the reality is that we live in a continuum, a month is just a month. It is a positive that we are now getting better availability of the refreshed 9-5, which has been very well received here just as in other big markets like Sweden and the UK. We just tend to be a little bit later in the pipeline…
Another big difference with Europe is that we have quite a different field of over competitors here, including a number of up-and-coming Asian luxury brands that haven’t become a real force in the Olde Worlde (yet). And while we love the fact that we now have a phenomenal vehicle like the 9-3 SportCombi in our stable, there’s only a limited appetite for that type of car here in the US – as exemplified by the fact that Mercedes recently withdrew their C-class wagon from the American market.
Meanwhile, don’t expect us to participate in aggressive sales incentives like last year’s ‘Employee Pricing for Everyone’. It may have given us some record months like June and July ’05, both over 6,000 vehicles – only to be followed by a very low September and October, largely due to depleted inventories. Our main learning was that those kinds of peaks and valleys are far from ideal in our quest to build a stable long term business.
Bottom line: expect Saab USA sales over the summer to look negative – at least when compared to the same period one year ago. A closer look, however, will show that we are now much more even-paced from month to month. This will come to our advantage in the fall, which leads us to predict that despite all the competitive pressures, we should finish this year at last year’s overall sales level – maybe even slightly higher.
So, keep the faith and bear with us…
There you have it, from the proverbial horse’s mouth.