From the GM press release on 2nd Quarter results for the company….
GM Europe posted adjusted earnings, excluding special items, of $124 million for the quarter , an improvement of $94 million compared with earnings of $30 million in the second quarter of 2005. The improved earnings reflect favorable material costs and improvements in pricing.
“Our European operations continue to gain momentum, posting a second consecutive profitable quarter, excluding special items ,” Wagoner said. “We are pleased with Saab’s global market performance, posting a sales increase of 24 percent for the first half of the year, and the continued growth of the Chevrolet brand in Europe. We are also encouraged by the response to the new Opel/Vauxhall Corsa, unveiled at the recent London Motor Show and scheduled to arrive in showrooms this fall.”
Saab are producing cars that make sense.
Cars that are bigger than they look. Cars that drink less fuel than their performance would indicate. Cars that perform one hell of a lot better than you think when you read “4 cylinder” on the sales sheet. Cars that protect their occupants like few others. Cars that can swallow an elephant on one trip and be as nimble as a cat on another. Cars that will look as good in 10 or 20 years as they do now. Cars that function in a way that’s intuitive (once you unlearn all that dumb-car stuff from your previous brand).
Saab’s home market in Sweden has always understood it. Saab buyers in the UK are getting it more and more with each passing year. But potential Saab buyers in the biggest market of all – the USA – are yet to be tapped.
As I address this I’m very mindful of the fact that I’m writing from a desk on the other side of the world, addressing the issue from a basis anchored to perceived market conditions. With that proviso, here goes….
Saab are in a difficult position in the US. As mentioned above they produce cars that make a hell of a lot of sense and are fantastic to drive in all conditions. The Saab problem in the US is rooted in the fact they’re a ‘small’ car company in a market that generally speaking doesn’t attach much value to ‘small’ cars.
As I take a look at the US market, there’s hardly a manufacturer still around that hasn’t forged a reputation based on either a) a big family sedan, minivan or utility vehicle, or b) an exceptional sports car. There may be a few recent exceptions such as Subaru and possibly Hyundai, but I don’t think it’s an unfair assessment.
Until just a few years ago Saab had no AWD vehicle in the US. They plugged that hole with a substandard transformation of the WRX Impreza. Until just over 12 months ago they had no entrant in the SUV category. The 9-7x has addressed that, and has done it better than a lot of people expected.
There’s never been a big Saab sedan, or minivan (thank God), or a pure sports car that captured the sporting enthusiast’s imagination. Saab have been steadfast in their dedication to FWD, turbocharged, midsized-at-most vehicles in the belief that it’s a formula that best suits the broad cross section of everyday driving for most people. And they’ve not necessarily erred in doing so. Sometimes 10,000 monkeys can be wrong.
The land of the free is suddenly feeling the pinch of higher fuel prices. The cheap gas that drove their friend-laden boat-towing keg-lugging behemoths is disappearing faster than last week’s pay cheque and in this sort of climate, Saab should be in the perfect position to capitalise.
They’ve capitalised in the UK and Europe with diesel, e85 and high performing gasoline vehicles of decent proportions that suit the conditions and the roads. The model mix in these markets is small, but very effective.
What Saab in the US need to do now is seriously pump up the efficiency, safety and performance attributes of their core model range. ‘Born from jets’ has been effective in fostering some interest and the aviation theme contains suitable imagery for the future. But it can’t stop there. Saab’s ongoing efforts in the US need to put some meat on those bones. Pretty pictures and catchy music music will only get you so far. Substance will carry you home.
The 9-3, 9-5 and 9-7x ranges have a hell of a lot to offer. More than your average John Q would know. If Saab USA could fast track the Biopower versions and find a way to get the diesel to market then the range of cars on offer suddenly expands at least two-fold.
Fortune favours the brave. Saab have been held back in the US by beancounters and market conditions for long enough. If GM want Saab to succeed in this key marketplace – and the upside potential there is huge – then they’re going to have to equip Saab appropriately.
That means engines. That means interiors. That means performance options. And it means marketing.
My concern with the whole future-of-GM thing is based solely on Saab’s continued existence. If I saw a Hummer on fire I wouldn’t even stop to pee on it. The one thing Saab needs (apart from killer cars in the future) is growth in it’s US market share.
Saab is GM’s premium global brand. GM needs to treat it that way and Saab USA needs to live up to that tag with some leadership, innovation and success.
Rick Wagoner’s got good reason to be pleased with Saab globally, but I’m sure that he and Jay Spenchian are more than aware that there’s no reason to get settled.