BIG UPDATE BELOW
Edmunds are asking whether or not Saab can survive.
I’ve tried about three or four times to write a response full of all sorts of righteous indignation, but I can’t. I’ve wasted about 800 words so far and I refuse to waste anymore. So here’s a few quick thoughts inspired by the article, from the hip.
1) The US is overstated in importance IMHO.
The US is Saab’s biggest single market, but is it the most important market? As keepers of Saab’s biggest single market, SaabUSA get a fair bit of say on what comes into Saab’s future models. But at what cost to Saab’s uniqueness as a brand?
A secondary thought that reinforces this: right now SaabUSA contribute a reasonable amount of margin to Saab’s bottom line due to 9-7x sales. But in 18 months or so when that’s replaced with the 9-4x, with a bunch of investment costs to recoup that the 9-7x doesn’t have, how big will their contribution be?
ctm has made a great point in comments to this post while I’ve been writing this. Continental Europe has an inbuilt acceptance for Saab, and has plenty of room for growth in key markets. His numbers from comments:
UK total market: 2,700,000 – Saab: 27,000 (0.99%)
Germany: 3,800,000 – Saab: 5,400 (0.14%)
Italy: 2,600,000 – Saab: 4,300 (0.17%)
France: 2,500,000 – Saab: 3,000 (0.12%)
Spain: 1,950,000 – Saab: 5,100 (0.26%)
What if Saab could reach *just* 0.5% of the market in *just* those 4 countries? That alone would *add* 36,000 vehicles to Saab’s European sales figures. Imagine playing that number game all over Europe…
Imagine if Saab could reach just 1% market share in all those countries like they do in the UK. In my coverage of sales data I’ve been saying for a long, long time now that Saab’s sales in Germany are way under what they could be. I don’t know if they’re way under what they were (in market share terms) in the past, but it wouldn’t surprise me.
I’d go so far as to suggest that a focus on satisfying US customers is bordering on detrimental to the Saab brand.
2) Steve Shannon isn’t making much of an impression.
Sorry, but I’ll call a spade a spade here. At a time when Saab’s been under the pump in multiple stories like this one there’s been precious little of Shannon in the media. I don’t need hype or huge presence, but some sort of indication that there’s a heartbeat there would be a good start.
Shannon is quoted in this story from Edmunds, but I didn’t read any enthusiasm there at all. I haven’t heard anything about him really embracing the brand. I’d have thought as he learned the ropes that there’d be something said about what he’s learned. Just something. Hang your ya-ya’s out there and make a stand.
The absence of failure doesn’t indicate success.
3) GM most likely hasn’t given Steve Shannon much of a chance to make an impression.
This article from Edmunds is built upon a response to Bob Lutz’s Fastlane blog entry from last week. I posted a response to that one too. One of the things that Bob said in his blog was that GM see Saab as a jewel in GM’s crown and that they were determined to see it succeed.
As Edmunds note, they’re nice flowery words in public, but they’re not being backed up by a marketing budget that can give Saab any genuine chance at success in the US market.
Since learning that Saab’s US marketing budget would be no greater in 2007 than it was in 2006, I put it down to the fact that the 08 model was coming and funds would be pushed back to launch that in a big way. The rubber’s about to hit the road on that one.
With most of the future products already well progressed through the pipeline, Steve Shannon doesn’t have a lot to do other than market Saab in the US. If GM don’t fund that project with a proper budget that gives him a chance to actually do the job in a meaningful way then he’s basically a lame-duck manager and GM are really shooting Saab in the foot.
Watch this space.
4) That old Cadillac thing again
You’re probably all quite sick of hearing me rattle on about it, but that market share in Europe thing would really, and I mean REALLY be given a better chance at breathing if investment in Cadillac was diverted to Saab in Europe.
Who’s got a better chance of selling an extra 25,000 to 30,000 cars in Europe? Saab or Cadillac?
Cadillac is supposed to be the ultimate interpretation of American luxury – so what the %@$# is the BLS? It’s a waste of bloody resources and nothing more. The only good thing that’s come of it is some extra production for Trollhattan and some trickle-down enhancements to the 9-3 that could have been achieved within Saab anyway.
5) Saab should have a great place in the future
If the future is about doing things smarter, more efficiently and with great safety, aesthetics and design then I can’t think of another brand within GM’s portfolio that epitomises those qualities more than Saab.
Their historical philosophies on cars should give GM plenty of ammo for building a great portfolio of vehicles. GM know this, too, which is why Saab punch well above their weight when it comes to innovation and technology within GM.
Will GM look at selling Saab in the future? I’m sure they will if Saab can’t sell more cars than what they’re currently doing.
With a fuller product range coming in the next 2-4 years, though, I’ll be very surprised if Saab don’t return to profitability. If they don’t, GM will only have itself to blame as the Saab philosophy on car building should be a perfect fit for the modern automobile.
ctm has gathered some numbers to have a look at that scenario he covered above.
That is, what if Saab were to get the support they needed to boost their market share in Europe. He’s covered almost the whole of Europe here, but the key markets are likely to be those in Western Europe.
Click on this to enlarge and see what Saab could do if they were to lift market share to a) 0.5% and b) 1%.
The bottom line:
This chart shows that there’s a number of countries in Western Europe where Saab isn’t reaching anywhere near just one half of one percent of market share. If Saab were to attain that 0.5% market share in those countries then Saab would be looking at an increase of over 38,000 vehicles for a year when compared to total sales for 2006.
And that aiming for just 0.5% in Western Europe only.
What incredible amount of money would need to be poured into Cadillac for it to reach those numbers? They’re hoping to move just 10,000 Caddys by 2010 and they’ll probably struggle to do that!
Saab needs a gesture of faith beyond mere life support, especially now that a fuller model range is coming. As I said, GM will only have themselves to blame if Saab fails.
Thanks to Saabken for forwarding this story.