USA vs Sweden

Which car is going to be the most important new release for Saab in the next 2-3 years – The next-generation 9-5 or the 9-4x SUV?

I haven’t written anything about the 9-4x for some time, and for various reasons. Firstly, there’s been very little in terms of news about the vehicle. The last we heard of it was a brief sketch at the Saab Owner’s Convention, which I covered back in September. Second, it’s not on my mind to write about too often as it’s a segment of the market that I don’t think about too much in the normal course of things. Once we see the vehicle in the metal I’m sure that’ll change.

I’m prompted to think about it this morning though, after reading an article about Volvo published in The Car Connection. It’s a really interesting read about how strong the Volvo brand image is and yet how under-fed it is in terms of advertising – Something that’s considered to be a contributor to Volvo’s declining sales in the US, in the order of around 6% this year.

Despite the lack of 2006 growth, TCC describe Volvo as the stronghold of Ford’s Premier Auto Group and a brand with a very resolute image. Words such as ‘trust’ and ‘safety’ are close associates to ‘Volvo’. The only problem being that ‘safety’ isn’t as high on the list of discrete qualities sought by your average-Joe buyer. It may be something you want if you’re asked about it specifically (i.e. “Do you want your car to be safe?”) but it’s not necessarily going to be on your top 5 list of distinct attributes (i.e. “What qualities do you want in your next car?”).

Another thing that Volvo has received some bouquets for in the US is it’s big-butt SUV – the XC90, which is reported as being well received by the US automotive press. And this is where my thoughts about the 9-4x kick in.

Saab started life as a Swedish company that made aeroplanes and decided to go into cars when the war finished. Their first cars were well designed for Swedish families and combined aerodynamic design, strength, safety and winter practicality all in the one vehicle. As their versatility was proven over a number of years, both in the sales yard and on the track, they were embraced by other markets, too. As the years went on, Saab innovated further and became known for turbocharging, safety, practicality and somewhat eccentric design.

By its sheer size and economic power, the US became Saab’s highest volume market and at one point in the 1980’s they enjoyed 60 straight months of sales growth there. Still, despite being the dominant market, we’re still talking of numbers in the realm of around 30,000 at best because in spite of all Saab’s acclaim for making turbochargers and convertibles more practical and enjoyable – they were still a minnow in the automotive world.

I’m not quite sure what drew GM to Saab in 1990 and even more, what led them to pull the trigger on a full buyout 10 years later. Whatever the appeal was though, Saab are now owned by an American company, as well as being subject to a fair bit of influence from the American market.

And therein lies the rub.

Previously, Saab were a Swedish company that sold Swedish designed and built cars to Americans who discovered they felt a connection with them. They were economical, would perform surprisingly well when asked, were great in winter or summer conditions.

Now Saab are an American-owned company and still coming to grips with their place in the world. Their corporate philosophy is increasingly subject to the influence of the star executives and the beancounters in Detroit and the company’s now living in a time where the advertising is scrutinised almost as much as the product itself. Saab grew up in a time where it’s home market just needed a car. It’s now maturing at a time where it’s main market speaks with a funny accent, is cashed up and very demanding about the type of new vehicle it wants.

Witness: the 9-4x.

In automotive utopia, Saab wouldn’t necessarily need a 9-4x (or the 9-7x that’s filled the gap in the meantime). They might have addressed this section of the market if they were still a Swedish company, however one can’t help but feel they would have explored the smaller crossover segment with vehicles more like the 9x or 9-3x concepts. In an automotive utopia, Saab would design the best Saab cars they could, not the ones they were restricted to by the beancounters.

Saab don’t live in an automotive utopia however. They need to make some money and to do that they need to feed the richest market the vehicle that it wants – a rather biggish SUV.

That XC90 that Volvo’s used to gain some more cred in the US market sells like out-of-date milk in Sweden. In November 2006 the Swedish market took 2,654 more-size-friendly V70s and only 167 XC90s. This just seems to highlight the difference between the two markets, their tastes and needs. The problem is that one has the capacity to dictate terms to the other. Like Denis Leary said – “We got the bombs, OK?”. Substitute ‘bombs’ for ‘cash’ and you get what I mean.

I really hope that the next Saab 9-5 and the upcoming 9-4x are both designed with all four wheels well and truly planted in the Saab ethos. Somehow I get the feeling though, that the 9-5 will be the car that the Saab-nuts will want to have, whereas the 9-4x will be the SUV that Saab USA wants to sell.

If it achieves the ultimate aim of assuring Saab’s future and capacity to design real Saab cars, then go for it, GM. Knock yourselves out. Just remember that all these people that love the badge grew up with Swedish cars. They connected with a philosophy more than a name and there’s not enough marketers or CGI artists in all the world to overcome the problems caused by a product that fails to meet it’s market.

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22 Comments

  1. Another well crafted observation piece, Swade. I have read in the past (don’t know if it is accurate) that GM was originally after ovloV but Ford got their first. GM went for sloppy seconds and got Saab.

    It seems that their reasons for acquiring Saab was because their competitor has acquired the other Swedish marque …and that was about it.

    They said at the time that Saab was their premium brand …but now they are trying to foist Cadillacs as their ‘premium’ car on unsuspecting Europeans, even building them in Saab’s factory 🙁

    Compare the XC90 with the 9-7X and you have one completely new completely designed vehicle and then you have a rebadged Chevy Trailblazer.

    The demise of the 9-2X and 9-7X shows that it takes a little more than grafting on a new nose and shifting the ignition to the centre console to make a Saab.

    Way to go GM?
    Where to go, GM??

  2. “They connected with a philosophy more than a name”

    Well said. I too hope that the next 9-5 is true to Saab’s history. Here’s hopin’…

    ~Peter

  3. Excellent post. However, it is not just the USA that is demanding SUVs. This is a segment that has exploded across Europe. Even the French are making SUVs now, who would have thunk it! SAAB, even they were independent would have had to make SUVs just to survive.

  4. Great article!

    In terms of an american’s perspective on SUV’s and their size – I’m hoping that SAAB makes the 9-4x a smaller, more managable crossover-esque vehicle. I think most Americans feel like we’ve gone too big with the full size SUVs’ – they’ve been crashing in the marketplace. In other words, hopefully they’ll be more palatable to other markets than just the US.

  5. Hey! Who are you accusing of having an accent? 🙂

    On a more serious note, I have no doubt that the 9-4x will be somewhat smaller than the 9-7x.

    Swade, you’ve written an excellent article, but you go a bit far in asserting an inherent contradiction between Saab’s Swedish-ness and its American ownership. Making a cross-over SUV is hardly a money-induced DNA transplant. There’s a great deal of positive synergy between American market demands and Swedish cars — Saab has been making more reliable, quieter vehicles to meet consumer expectations in the U.S. market. As far as I know, Swedes have not been rejecting these new Saabs as being too reliable or quiet.

    IKEA is making a lot of money in the U.S., too.

  6. Seems to me that a big problem with SAAB, going back to before GM owned them is the price. There is not much bang for the buck. They’re excellent cars, but what are you getting for that US$40K or so you are paying for in a 9-5? Maybe this is partially what is accounting for the dismal sales of 9-5s in the U.S.

    For example, for that same $40K you can get a BMW 335i which has a 3.0-liter twin-turbo 6-cylinder engine versus the 2.3-liter single-turbo 4-cylinder engine in the 9-5. Plus you get the cache of the BMW marque (and their racing heritage SAAB doesn’t have). Who in the general public even knows SAAB used to participate and dominate rally racing all those years ago?

    GM needs to help SAAB find a way to give customers more for their money or reduce the cost of the cars. Positioning SAAB as a competitor to BMW and AUDI has been ridiculous, IMHO, and I hope the Cadillac BLS isn’t a sign GM is giving up on SAAB in this market.

  7. Greg, I agree that GM’s ownership has brought some positives, the NVH issue being one possibility, though the folks at JD Power would argue with you about reliability. Bottom line: no-one’s going to complain about a car that runs quieter or more reliably, but they might baulk at a brand that loses too much of it’s character.

    I definitely think there’s an Americanisation happening at Saab. Slowly, but happening nonetheless. Jay Spenchian said outright at the owner’s convention that as the biggest stakeholder, the US gets a reasonable input into what’s developed at Saab. Combine that with Detroit holding the purse-strings and I think it’s inevitable.

    It’s not all bad, but it’s not all good either.

  8. I look at it this way, if the 9-2X and 9-7X werent around we’d be looking at even less Saabs sold in the US this year and last. Saab’s image has not been damaged by these cars one bit, why? Because, and I hate to say this, Saab doesnt have any image to damage these days. Saab had a very positive image in the 1980s – hell they were even better than BMWs back then! What happened? Saab stood still and let BMW eat their lunch. The classic 900 held on far too long and should have been replaced no later than 1990. Investor AB were really the ones to blame for Saab’s decline due to a lack of investment and Saab sales have not gone up in 20 years.

    Someone at GM needs to take a good look at what a Saab is! Quirky does not sell so forget a 900 revival!! I think what the world needs is a smart, great handling turbocharged sedan of very high quality with Saab styling features that do not offend. The 9-3SS is a fantastic platform, it looks fantastic but the quality is lacking if we read the motoring press. The pre-06 9-5 was a great car but it clearly needs replacing with a car that is the size of Audi’s A6 – with quality to match!

    I recall GM telling us Saab would sell 200000 cars in 2006 back in 2001-2002. What happened, GM? I fear for the Saab brand and if things dont improve by 2010 I honestly think our favorite car company will be relegated to the history books!

  9. It’s frustrating to watch Saab sit on its hands for 10 years as the SUV craze blossoms and burgeons, and then, only as it begins to fade, come out with a body-on-frame truck brute that the market may have gone wild over in 1999, but has since decided it hates. Even so, had the 9-4X come out two years ago INSTEAD of the 9-7X, it would have beaten the new smaller SUVs like the Acura RDX, the BMW X3, and the upcoming Volvo XC50/40(?) to the market. Even worse, the 9-4X would have fit in perfectly with Saab’s heritage — a little small for the segment, turbocharged, more economical than its competitors, and above all, smartly designed. Instead, we got everything we didn’t need, exactly when we didn’t need it. Sigh.

  10. The whole SUV-thing is mostly a trick of the marketing, a temporary fashion of the automotive market.
    Do the people really need SUV in Europe?

    No, I quite sure they don’t.
    What are the advantages of SUVs?
    Big – comfortable for more persons,
    Feels more safe (I don’t think is so much safer, but it feels),
    Shows more power
    Has better road grip with 4WD on slippery roads and offroad,
    Gives better view because it’s higher than regular cars,
    More comfortable to drive on bad road surfaces

    But actually, most of the SUV owners use they cars in such kind of enviroment (mostly inner city) where the majority of the mentioned advantages turn to disadvantages.
    Big – more difficult to find parking place, generates more fuel consumption and pollution because of the higher weight and bigger engines and 4WD.
    Comfortable for more persons – frankly, most of the SUVs carry only 1 or 2 people inside cities, so it’s not an argument.
    Feels more safe – in city traffic I hardly believe it’s safer than any Saabs. Actually, as far as I know, the myth of SUV safety based on mostly the facts that they are higher and heavier than other cars, so in case of crash their impulse is higher, and they may destroy more the other car while their deformation may be smaller?
    4WD – when do you need 4WD in city traffic? Only in extreme weather conditions when the roads are not cleaned. This is not happened frequently in Europe…
    Most of SUVs have never driven offroad and they even seldom used outside cities.
    More power – yes, for those people who want to express their superiority, or to be the “king of the road” it could be important…
    Better view – ok, this could be a real advantage – but in the other hand the higher body increases fuel consumption and needs more complicated and more expensive suspensions supported by expensive electronic safety accessories to keep it safe and comfortable to drive.

    Actually, a good 4WD Combi/Estate car (like I wish to see in a future 9-3X and a 9-5X Sport Estate/Sport Combi) will be much more adequate for the mentioned functions.

    But the marketing will generate the demand for SUVs more… and people will buy them, because they think they trendy.

  11. Swade, you made mention of the US market dominating Saab because we have the money. Now while the US is one of the higher ranking countries when it comes to per capita income it is by no means the highest. If income alone was the culprit for the American penchant for large, powerful vehicles then Norway, wealthier per capita than the US should be covered in them. But it is not.

    This leads people to contemplate just what is it that wrong with Americans that makes them want big gas guzzlers.

    I submit to you there is nothing different about Americans. First, the parking lots in Canada look just like the ones in the US so if there is something wrong with us, as some people believe, then whatever it is has infected Canada as well.

    Secondly, I have spent a good amount of time in Europe and have seen plenty of gas wasting monsters. Range Rovers, AMG Galedenwagons, V12 BMWs and Mercedes, etc. Europe is far from a land of nothing but Smart cars. Large powerful cars are a outward sign a wealth and success the world over, the difference between North America (can’t leave the Canadians out of this one) and other wealthy countries is that here, you don’t need to be born to aristocratic splendor to be able to afford a 350hp rocket ship.

    North America is, in the narrow confines of the automotive world, a much more egalitarian society than other parts of the planet and the reason is not runway income but is rather, in my view, due solely to lower taxes.

    Let’s look at the cost of a base 9-3 Aero w/2.8 V6, around the world. (From lowest to highest, converted in USD)

    United States: 33,370
    Canada: 36,841
    Japan: 44,375
    Sweden: 48,517
    South Africa: 49,113
    Germany: 49,392
    United Kingdom: 49,441
    Australia: 54,923
    Poland: 59,825
    Norway: 99,776
    Denmark: 106,540

    This is for the same car, with the same equipment, made by the same people and at the same factory.

    Right or wrong, good or bad, high tax government or low tax are arguments for other days on different blogs. I’m just saying that I believe that it’s taxes, and nothing else, that explains the significantly higher ratio of large, powerful cars and trucks on the roads of North America.

  12. Oh and I forgot about European Delivery. If I go to Sewden to get my 9-3 Aero it will only cost me $29,530, and GM will give me $2,000 in cash to help cover the costs of my trip.

    And if that’s not enough if I pick the car up in Trollhättan (I can’t imagine picking it up anywhere else) and drop it off at either Gothenburg or Bremerhaven then the costs of shipping the car back to the US is free.

  13. Dinger,
    I think, your explanations is not correct.
    The reason of low prices in US is not only the taxes and the government policy.(By the way, don’t forget the fact, that for many Europeans it seems the US wants to rule the whole world all the way – just because they can force the rest of the world with their power.)
    The US market simply can do almost anything because of this market has the highest effect to the sales, practically everything is cheaper there. Many products are even cheaper there WITH tax than in Europe WITHOUT tax, so it’s not about the taxes.
    Other markets (just like the most of our small European countries) are not so important, their has smaller effect to the sales, especially for a US brand, like GM – so there is no reason to sell here for the same cheaper price.
    The tax and government policy also not a reason why Saab USA sell cars with 5 year warranty and why it is only 3 years in my home.
    About European countries: yes, of course, you can see many big cars with very powerful engines. But this is just a small portion of the total number of cars. If you compare the AVERAGE or the mostly used cars in Europe and in North America, you should found the real difference: the weight, the engine and the fuel consumption of the AVERAGE or BESTSELLER cars in Europe are significantly smaller than in North America. And it’s not only because the poor European people can’t buy a car with V8 and 300-400 HP. It’s because there are more people here who don’t believe that they need theme.
    In the other hand, the fuel prices were also much-much more cheaper in US, so people used to don’t care about the costs of fuel consumption.

  14. Ivan,
    I never said or implied that Europeans were “poor”. In fact I pointed out that Norway has a higher GDP per capita than the US.

    Now while I don’t disagree with you that more Europeans are inclined to want a smaller car, I would however say it’s not because Europeans are “different”, but rather as a result of many years of high taxation on automotive items, from licensing, registration, fuel and most importantly to the cars themselves. Trust me, if the US had the same taxes on cars as many European countries do people here would be screaming at GM to bring the Corsa over and if Europeans could put low tax gas into a 252hp Vectra that only cost € 14,000 they’d sell plenty.

    My anecdotal evidence for this is that for the last 3 years my wife worked for a company in Columbus, Ohio that hires large numbers of Europeans. Europeans that found themselves with a need to purchase a car, as Columbus lacks public transportation. Now even though the US market lacks the wide variety of small car choices as Europe, if what you say is true then many of them should have bought a Mini or maybe a nice hybrid. But what kind of cars did they get? 276hp MazdaSpeed6… 300hp Mustang GT… 350hp Pontiac GTO… 400hp BMW M3… and then there are the ones that bought big SUVs. One guy I met in August had been in the US only 2 weeks and had already bought a 11 mile per gallon 1978 Jeep Grand Wagoneer.

    So still, I believe we aren’t all that different but the taxes are. (or perhaps they were brain-washed by George Bush upon arrival in the US as part of Americas evil plot to take over the world by force, no doubt at the direction of the Zionist regime in Israel as they attempt to steal the world’s oil, eat all the babies and kick every last puppy in site)

  15. Dinger,
    I don’t want to react here to your last paragraph because Swade’s blog is not the place for a political flame, but I declare that I have never talked and thought so extreme, even I have many disapproval regarding US policy.
    Your “evidence” (what car some Europeans bought in US) is statistically not relevant.
    Those Europeans who like to live in US are certainly much more biased to accept and try the american style of living what we can see in the movies.
    The taxes are quite different in European countries. I live in Europe 40 years ago and have worked more than 22 countries of the world, I have friends in many different countries, based on our discussions I still feel that Europeans (I mean the average people, the mass) don’t think they need those big, thirsty cars.

  16. Ivan,
    You are correct that this blog is not the place for political comment. If you look at the end of my initial post you will see that I myself stated debate over the policies behind the taxation was for a “different day on a different blog”.

    However you still felt the need in your response to my initial post to put in a parenthetical comment about the US trying to take over the world by force, which would seem to me to be a rather strong and biased political comment.

    My parenthetical in my second post was meant to mock your earlier parenthetical, and was not intended for any overt offense, or implication of your beliefs.

    As for the issue at hand you stated that Europeans don’t think the “need” such cars. I guess you think that Americans do? I don’t believe you can point out any study that shows that to be correct. I know people who “want” say, a 303hp Chevy Impala SS but I can’t even imagine someone trying to defend a “need” for such a car.

    I would be willing to make a wager that you yourself have items around your house, such as a television, iPod or other such superfluous luxury that you bought out of want, and not need. Again, we aren’t different, just living under different tax structures.

    All that aside we can at least agree that the C900 was a great car. Right?

  17. Dinger,
    I haven’t said the US trying to take over the world. Maybe my english is not good enough to distinguish, I would like to say that they trying to push their will and imagination about what is good and wrong.
    Back to cars: I can’t believe that you simple ignore the fact that how was the carmaking in US in the last 50 years. If you compare the weight, power, fuel consumption of average or best selling cars in US with average cars built in Europe in the same period of time, I’m sure that the difference will be clear, and it could not be just because of the taxes.
    It’s an attitude. US people were always more “motorized” than European and for long time they didn’t need to take care about how much fuel they need for the cars…
    It can very easily drive the attitude home.

    ABout me: yes, sometimes I buy things what I maybe don’t need. I buy them to try. And if I realized that I don’t need, I sell theme, or sometimes I give them to people who really need them (of course, not a car).
    I will never buy a V8, even if I can afford, because I don’t have any reasons to proof I need it.
    Most people I know think very similar.
    At last, yes, I agree, C900 was a great car (I used an 1986 MY coupé as my first Saab for 7 years.)

  18. I blame Christopher Columbus myself. If he’d discovered the US 1,000 years earlier then it’d be full of roads just big enough for horses and chariots and small tight spaces. It’d also be way more populated by now.

    I think the truth is somewhere in between the tax vs culture arguments (as is often the case). There’s no doubt that the tax regime makes vehicles more competitive in the US but the big vehicles there wouldn’t have sold in such astronomical numbers if people didn’t have an appetite for them.

    Big country, wide roads, appetite for the outdoors, big families, cheap fuel. It’s a recipe for the SUV. I saw in a forum once, a guy saying that as he and his wife were now expecting their second child it was time to get an SUV. Here in Oz that would be a slightly laughable argument. It’s time to get a family sedan or wagon, but necessary to get an SUV? Hardly.

    All I’m saying is that it’s a much more natural progression to think SUV in the US and I could well imagine that it’s less natural to think of one in Europe where you’ve got a higher cost of fuel and smaller roads. That doesn’t make the big vehicle less desireable, as you point out, but much less practical.

    And whilst Norway might be wealthier per capita, it has a far smaller population than the US. Even a small number of reasonably-well-heeled people (in US terms) choosing a Saab is enough to be Saab’s largest market.

    Like I said, the truth is somewhere in the middle. Lower taxes play a big part, sure, but it’s only part of the picture. A huge population with a fair bit of money to throw around is more of a contributing factor in my eyes.

    And yes, the C900 is truly a classic.

  19. Saaboy: no. Sorry to say that the price point of the 9-5 has kept me from even getting near one. Add to that the fact that I do consider aesthetics somewhat when I buy a car and the 9-5 doesn’t do anything for me personally. I suspect that’s the same for many car buyers.

    I understand that people who actually DRIVE the 9-5 fall in love with it, but the problem is it’s so unappealing aesthetically that many car buyers don’t even consider it. That’s just my opinion of course, so I don’t want to read a bunch of comments trying to convince me how beautiful the 9-5 is in its own way…

  20. Swade,

    Wide roads? Excellent point. I so totally overlooked that and I shouldn’t have.

    But! In a complete aside… I just moved from Ohio to New York City so unfortunately no pictures of the Detroit show from me this year.

    Subtracting the 20 mile trek to get a Christmas tree I have put about 4 miles on my ’86 900T over the last week, while the ’89 900T and stayed tucked away in the garage. But you know what? It just makes getting behind the wheel that much more special each time.

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