Competition and Opportunity

One important point that’s been raised from Gripen’s coverage of the San Diego 60th Anniversary event is the following:

SAAB USA is trying to get the word out that for the price of a well-equipped Toyota Camry or Honda Accord you can drive a SAAB. SAABs start at USD$27,000. They want everyone to know SAAB is the “closest thing to driving a jet” and SAAB is “the jet you can afford”.

This went through a bit of a mild transformation in subsequent discussions whereby it was noted that these models were seen as the competition for the Saab 9-3. It’s a natural transition to make, but there’s a subtle difference to keep in mind.

I say it’s an important point because Saab USA penned a brief note to me this morning about it. They wanted to clear things up a little:

……Saab’s competition is not Honda Accord or Toyota Camry. Those owners/consumers, in particular, are good targets as “move-up” buyers.

The email also mentioned that they’ve enjoyed the coverage immensely *cue applause for Mike, please 😉 * – but I digress.

It’s a fine line with regards to this competition/opportunity issue, but I think I can see which side of it Saab are walking.

You have your traditional Camry owner who’s now a little older and can afford to consider a vertical move with their next new car. Do they go for a better version of what they’re familiar with or do they make a choice to go for something else? In that situation, are they likely to consider a Saab as an option, or are they likely to write it off considering that it’s European, the perception being that it’s going to be much more expensive?

These owners represent an opportunity for Saab to compete as they move up, either to a top-spec Camry or Accord et al, or to an entry level premium European model. Their default option will likely be something they’re already familiar with (ToMoCo, Honda) or something they’ve heard a lot about (BMW, Audi). If they’re not yet familiar with the value that Saab represents in this segment then they’re not even going to have Saab on their radar, and that’s a situation that Saab want to change.

That’s how I’m reading it, at least.

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Of course, the one question that begs to be asked in reply to SaabUSA’s clarification above is: Who exactly are Saab’s competition?

So I wrote back and asked.

Hopefully there’ll be an answer forthcoming soon, and as soon as I know, you’ll know it too.

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9 Comments

  1. Saab’s competiton: Acura, Audi, BMW, Infiniti, Lexus, Mercedes-Benz, Volvo.

    You can get a base BMW 3-series for close to that, too, or an Audi A4.

    The thing with cars is, it’s not merely the price tag, it’s the brand perception among buyers that’s a lot more important. Saab has an image for high repair costs and tricky maintenance – thereof, if you drive a Saab, you better be prepared to pay hefty for repairs.

    A myth or not, it doesn’t really matter because that’s what 90% of the people tell me: “You drive a Saab, pricey repairs!”

  2. Fresh from the Chicago Auto Show and GMwise it was all Saturn and Pontiac…so how does the General snag sales from the aforementioned competition with those brands and so much apathy and neglect of Saab?

  3. fred: to be fair to SAAB USA, they did have a heck of a presence at the L.A. and Detroit International Auto Shows. SAAB’s booth was right on the end on the main aisle and was the first of GM’s brands you would encounter when entering the GM area of the L.A. Auto Show. The Aero-X appeared at both shows and the Million-Mile SAAB featured prominently at Detroit. GM has also selected SAAB to be their “showcase” brand at the upcoming Geneva auto show despite their other Euro divisions (like Opel) having new product offerings. I’m sorry Chicago was such a let-down but I think the major show in the U.S. is really Detroit.

    Kroum: I have had the same thing happen to me FOR YEARS of owning SAABs (all the way back to when I owned a 1981 900T in the early 90’s). I don’t know how SAAB got a reputation for being so much more expensive to maintain (and the rumor that parts are so much more expensive). I wonder what SAAB can do to try and dispel this myth once and for all.

    If I had to pick one brand that SAAB competes most with in the U.S. market I’d have to guess AUDI. You’d naturally think Volvo, but I think people are pretty polarized regarding the two Swedish manufacturers. Either you’re a SAAB person or you’re a Volvo person typically. There’s a mutual respect, and there are SOME people who buy both, but it’s like a Ford vs. Chevy pickup truck thing. A potential buyer isn’t going to be on the fence deciding between the two.

    As for Mercedes-Benz, I think they’re priced so much higher than SAAB that there really isn’t much competition there. And I can’t see SAAB taking many sales from the Japanese luxury manufacturers (Infiniti, Lexus, Acura). Lastly, though many people think that SAAB competes with the “low end” BMWs I kind of doubt that too. I don’t think too many potential BMW buyers “shop” SAAB before making a purchase. They know in advance they want a Bimmer. They’re not “smart shoppers” who do their research for the most part, I don’t think.

  4. Oh, you’re absolutely right about BMW buyers not shopping around. But if I have to be perfectly frank, I don’t shop around too much either – I like Saabs, and I pick Saabs. Sure, I’ll give Audis and Bims and Benzos a spin, but when test-driving a German boy I always tend to pick out the negatives and tell myself: “See, you gotta buy yourself a nice Saab, buddy!”

    So yeah, it’s all about perception and marketing. Brand identiy does wonders. When out on the market with X amount of K I have at my disposal, I first and foremost look at the brand – what am I going to be associated with if I bought an Audi? Or – hell, even worse – a Bimmer? It is against my nature to show off, therefore Saab is my natural choice.

    However, the large majority of premium brand customers would absolutely need for their car to scream status! And this is where Saab fails – in actuality, neither of the Swedish marques is about status – Saab (as well as Ovlov) are more about the lifestyle, and – particularly in Saab’s case – the nerdiness.

    So, to put it shortly – people perceive Saab as a nerdy, yet fast high-maintenance automobile. You guessed it – the problem lies in the latter perception!

    (Btw. I am in agreement with you as to Saab’s chief competitor in North America is Audi indeed.)

  5. Yep, the competition in the U.S. is Audi, all right.

    Here in Minnesota, home of the achievement-oriented, yet modest, white-collar worker, Audi, Saab, and Volvo compete for the buyer who wants European sophistication, but doesn’t want to be too flashy.

    Audi’s are really common here in the Twin Cities – I see more of them than BMW, for example.

  6. Acura, Audi, VW, Subaru, Volvo.

    NOT BMW, MB, Lexus, Infiniti, or Caddy.

    I’m also curious about how all your Saabs are not expensive to repair. Where do you take it, dealer or local shop? My Saab costs twice as much to repair as my Toyota.

  7. Camry’s (and most other Toyota’s) are cars for people who don’t like cars. Sure, that’s a huge market, but it’s not one that I would like to see Saab getting into.

    My favourite Toyota line, spoken by my mechanic to a woman who had a particularly unreliable Cavalier: “Just buy a Corolla and you’ll forget you even own a car.”

  8. I don’t know, I would say that MB can be considered SAAB competition. My brother bought a car last year. After checking out the 9-3 aero’s (due to my influence) he ended up settling with a benz C230 sport sedan, and I think it was the right choice. The benz was cheaper and it’s quality (at least in appearance) was ten times better. Okay, it isn’t the same kind of car in many respects, but they both are entry level sporty cars with four doors. The 3series bimmers, by the way, were much too expensive to even be considered. The base 3 cost more than the benz with all options.

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