Saab geopricecomparo time

Prompted by some comments in the Turbo X value posting from a yesterday, I thought I’d take a look at Saab prices in the US and compare them to a few other markets around the world.

In the US, you can buy your 9-3 with two engine variations – a 2.0T or a 2.8 litre V6, which is of course the Aero model. So my task was to look up the 2.0T ‘equivalent’, as well as the Aero equivalent, get the price in local currency and then convert it to US dollars.

Here’s the spreadsheet. My comparison countries for the exercise were US, Sweden, the UK, Germany, Australia and (just for Danni) South Africa.

Please ignore the cellmarker, which I should have moved before the screenshot. Click to enlarge.

Saab prices

As you can see, there’s a fairly big discrepancy. The US market is incredibly competitive as it is and then you’ve got the additional incentives that are pretty much expected nowadays.

Note that the Australian equivalent of the 2.0T, the 9-3 Vector, costs more here in Oz (in US dollars) than what the Turbo X will most likely cost in the US. I’m assuming it’ll come in at around US$40,000 or thereabouts.

The question’s got to be asked – how could they possibly make money on these in the US? If there’s an auto industry accountant reading this, can you please chime in via comments or email me privately. I just can’t see how they’d be making a buck on these, especially with the incentive discounting they have to use now.

For those of you who like pictures instead of numbers, I made up some graphs as well….

What you see here is the country along the bottom, and the price in US dollars up the left axis. This would have been better in a bar graph, but anyways….

This first one is for the Sport Sedan:

Saab prices

This next one is for the SportCombi:

Saab prices

And finally, the Irresistivertible:

Saab prices

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31 Comments

  1. If I am not mistaken, don’t the UK (and most all of the others in this comparison) include VAT or other taxes within the prices quoted here? For the US, our prices are MSRP (manufactures suggested retail price), tax title and license are extra. If this is true, would it be pertinent or even possible to take taxes out of the prices to see if SAAB and its distributors pricing are more similar country to country?

  2. Swade espoused: “The US market is incredibly competitive as it is “

    That may be true, but then we have to pay so bloody much for fuel here in the US! 🙂

  3. Here’s a question. Here in the US I would have to say you usually don’t pay the MSRP because as Swade mentioned all the incentives. Is that also true in the other countries?

  4. US prices don’t include sales tax which is about 5 – 8% depending on the state. There are many taxes on cars in Europe that are usually included in the price. For example, The Netherlands has a special tax on cars plus the additional sales tax. Total tax amount is about 40 – 50% or so…!

  5. “That may be true, but then we have to pay so bloody much for fuel here in the US!” Hmmm…I hope your fuel prices reach what we pay here in Europe soon… 😉

  6. What surprises me is the fact that the European Delivery option saves US buyers even more than any “dealer incentives” would! I have friends in Norway, so I’m very tempted to save over $3000 US on the price of a Saab 9-3, go pick it up at the factory in Sweden and drive it around Norway, stay a couple of weeks with friends for free, and then fly back home and have the car delivered to a local dealer. How can they do this? What’s the catch?

  7. Consider this. Maybe this is a situation where the tail is wagging the dog…

    It is so easy to think that the US is LOOSING money on thier cars by “giving them away” so “cheap” but that may not be the case.

    Maybe SAAB USA is selling at prices just at (or just below) break-even price, and all of the other markets are making a killing in profit.

    I think to get a better look, we need to see what other cars that are available in all markets are going for abroad. And, for that matter, regular products.

    Swade, a 20 oz bottle of Coke is about $1 in most vending machines and grocery stores here in the U.S. What is its cost in AD and USD Down Under?

    In a country that is laden with $12k Kia’s, $15k Honda’s, $17k Pontiac’s, and even $17k VW’s, it takes A LOT for a car shopper look at Saab’s. Yes, I know Saab is not in the same market as those brands. But like I said, we are up to our eye balls with cheap and disposable cars (in 3-5 years its dead). It is to the point where luxury cars have to FIGHT to sell anything over $30k to be competitive.

  8. …and to continue my point…

    What car maker in their right mind would sell a car for less than it’s cost? So, logic says if you can sell a car that costs $25k to make for $27k in the US and much more elsewhere, then by gosh, make it at a cost of $25k and exploit it’s price elsewhere!

    Savvy? (Sorry for the Capt. Jack Sparrow reference.)

  9. Here in Spain, we have a VAT tax, its the 16%, and also a tax that we say “register tax” in diesel engines under 2liters is 7% and over 2 liters is 12%(this is why many brands uses 1,9-2liters diesel engines with high output) and in petrol engines is 12% over 1,6 liters and 7% for under 1,6liters.

    For example in Italy, for the high taxes based on the displacement, Saab sometimes offered version of its 2.0T engine with over 170-180 bhp.

    the register tax it begins to disappear in many EU countries, but in Spain we mantain it, because we are quite stupid, well the government, the income they receive from the Automotive industry in many ways, included the traffic tickets is incredibly big.

    UK is one of the most expensive countries to buy a car in Europe. Its quite common that many UK citizens buy cars through Spanish dealers. Also its quite common here in Spain to buy second hand cars coming from germany(but this is another history).

    Here in Spain, we have the problem with the price post taxes, because before taxes the prices are lower than average, but after taxes that increases quite. In Germany the price before taxes is higher than many other countries, but after taxes it becomes one of the lower than many other countries.

    this is a EU study, the prices are without taxes.

    http://ec.europa.eu/comm/competition/sectors/motor_vehicles/prices/report.html

    about petrol prices, everytime I listen a complaint about USA petrol prices…….. come to europe and you will see.

    Another thing, is that USA market is based in big stocks. The dealers buy a lot of cars from the factory, thanks to credits(in few years this will be a big problem for USA automotive)industry). They buy big volumes, to have stock and to serve to the customer as quick as possible. Here in EU the customers are more willing to wait longer periods for its car, instead in USA, the customer they don’t want to wait a long period of time, and for this reason the dealers need to have a big stock to comply some specifications of the customers about delivery times. The distributor and the dealers for the volume can obtain a lower price per unit.

    Here in Spain its quite common to wait more than 1-2 months for a car. I wait for my My2003 9-3ss 2.0t vector about 2-3 months. My father wait for his ML350 about 4-5months. For example some cars, like a ML320cdi or some executives models with Diesel engines, that are quite popular here, BMW, MB, Audi and so you need to wait sometimes over 6 months or 12 months.

  10. Economics 101: It does not take into account the fact that exchange rate does not reflect the natural difference in prices. 3 years ago, the results would have been the opposite. Try answering Nevitz’s answer to the $1 coke bottle. Or, go to economist.com and look at the Big Mac index…I think factors such as a more competitive market, a more efficient supply chain, etc. are secondary. No comment to the conspiracy theorists 😉

  11. Taxes have a lot to do with it but there may be two other factors.

    First, the dollar is weak at the moment. Not 3rd world banana republic weak but weak, relatively, when compared to what it was from the end of WWII to a few years back. This causes an inflation of the price difference that would not have been there a few years back. For example at the conversion rate of the dollar to the pound when I first traveled to the UK in March of 1999 the UK 9-3 2.0T would cost $42,891 USD and not the $52,902 of today. That’s a difference of over 10 grand due to nothing other than currency fluctuation.

    Secondly I wonder if there isn’t a cultural component to this. That is to say that the car buying culture in Europe and other parts of the world simply expect to pay more for cars that the US does. This may sound inflammatory but give me a moment… In the first part (1890-1930) of the automotive industry in Europe the car was primarily a toy for the aristocracy and wealthy merchants, lawyers, etc and the European market place was awash with luxury car makers. Whereas in the US starting with 1899 Olds Curved Dash and reaching its perfection with the 1908 Ford Model T most car makers where trying to make a cheap car for the average family and Ford’s run away sales success with the Model T lead to multiple copy cats. Heck, in the first parts of the automotive ear there with really only 4 true luxury markers in the US, Pierce, Pace Arrow, Packard and later on Duisenberg while in Europe you couldn’t round a hedgerow without tripping over one.

    Later on Europe would get it’s run of cheap working man’s cars like the Beetle, 2CV and others but by that time the die, as my theory goes, was already cast. Nice cars cost money the European buyer thinks. No way I’m paying that much thinks the US buyer.

    Now you take my theory of cultural differences in price expectations, add to it confiscatory hidden taxes and the fluctuation of the US dollar and Ta Da! You get absurd price differences.

    PS: Feel free to think my theory is nothing but nonsense but don’t think for a second the cars are sold at a loss. The price differences on Saab can also be found on Mercedes and BMW, both of whom recently built factories in the US and I won’t even entertain the idea that they would build factories here if they were selling cars for a loss.

  12. Just look at the “BigMac pricing index” —> you’ll see how cheap you pay for a BigMac in the US, while we, in Switzerland, have one of the most expensive in the world… for the exact same sh*t… 😉 and hey: Scott, I guess you pay a lot less for fuel than we do, here in europe… (in Switzerland: about 1.5 US$/litre)

  13. Good point DRM.

    I was thinking along those lines. Sure they cost more in England, where the Pound is about twice the US dollar, but I think people need to factor in what people make and look at that ratio.

    They make cost twice as much, but if people make twice that amount, it’s an even wash.

    Sure,

  14. The sales taxes or VAT are very much on point and just part of the picture. I understand that at least in the UK and Germany cars in the SAABs’ price range are almost all company cars. The company, of course, gets some discount and there is some additional impact on the company’s and employee’s taxes. The UK price might be more of a marketing statement than something that very many people actually pay. Here in the US, some companies have a negotiated discount (less than 10%), but company cars are very rare unless you are at the level where they also come with a driver. Most of the company cars are owned by companies with less than 3 employees. Those companies have no bargaining power and little room for big overhead expenses. Most folks in the US actually pay within 10% of the MSRP and it is usually closer to within 5%.

  15. In Turkey, we pay, including all taxes, 65.000 € / 88.000 US$ for an 9-3 aero. And also we have to pay more than 2 US$/lt for gasoline. All these high prices are because of high VAT and sales taxes, not because of weak dollar.

  16. Not to add make things worse, but this doesn’t even factor in the traditional “discount” off MSRP the US consumer typically enjoys on top of any incentives. Our 60th Anniversay Edition was reduced USD$1500 from MSRP even before you tack on the USD$4000 we received cash back. I’m not sure how car sales traditionally work in Europe, Australia or Africa but in the US it is very, very rare for a consumer to pay full MSRP — and its usually on sought-after models. The current Camry Hhybrid, for example, enjoys such a reputation I believe.

    Which just goes to show the demand for quality, fuel-efficient vehicles in the states (despite our relatively cheap gasoline).

  17. I made a quick check. Here in Finland you´d have to pay 71000US$ for 9-3 SportCombi V6 Aero (includin tax) and that´s without any extra added. And here we do need at least engine heater installed and probably additional cabin heater, which is usual. I´d say, we pay a lot!

    Last year I paid about 55000US$ for 93 SC Vector 1.8t… 🙁

  18. thanks, Swade, for running the comparison.
    and thanks to all of you for your insights.
    I’d always understood that U.S. car pricing was lower than in other countries, but I never had any idea the difference was that great.
    wow

  19. Aww come off it Scott, fuel in the USA is dirt cheap compared to Canada and all of Europe. It amazes me how much we North Americans go on about the price of gasoline!

  20. I can’t believe we’re having this discussion again (gas prices). It’s always pointed-out by Europeans about how bad they have it with the high gas prices and how Americans need to stop whining about high gas prices (which I agree that we do have it pretty good in that a gallon of gas costs less than a gallon of milk, for example).

    I’d also like to have many of the social programs you enjoy in Europe that the taxes on that gas help fund. We have a terribly broken health care system, a dying program to fund the elderly (Social Security), and most of us get only 2 weeks vacation a year as opposed to the 5 weeks many European countries demand employers offer their employees. We also work 40 hour workweeks, which is amongst the most in the western world.

    So you need to realize this is an extremely complex issue and you can’t compare apples to oranges.

  21. for that kind of money, I should buy a bunch of cars on European Delivery and sell them off in sweden before they can ship them back. lol

  22. Chris,

    Those would be US Spec cars Saab you would be buying through the European Delivery Program, remember, not Swedish or European spec, so you wouldn’t really be able to sell them. I’m sure you could try selling them, but I wonder if you’d have a problem registering them in Sweden with the Vägverket.

  23. You have to export an EDP car within a certain period (I believe it is 6 or 12 months). If it is not exported, the Swedish government will come after Saab and/or the owner and you’ll have to pay the Swedish taxes.

  24. A factor to keep in mind is the export credits in developing countries who have manufacturing plants or assembly lines. Insofar as economies of scale is concerned and looking at the incentives for the motor vehicle development programme in developing countries, the import taxes usually makes luxury cars on the expensive side. So, if, say GM Southern Africa were manufacturing a certain brand locallly (right hand drive that is, i.e. H3), and export same, (to right hand drive markets such as Singapore, UK, Australia – which is what is what VAG Golf V, BMW 3-series, Mercedes Benz C-class are doing) and a host of other OEM parts bin, then the manufacturer obtains exports credits for the returning foreign payment which can then be used to offset the high import duties. As an example, when I bought my first MY01 9-5 Aero, the purchase price was ZAR397,000. Today, you can have the face-lifted auto 9-5 Aero for ZAR356,000 which buys you an MY07 9-3 sport sedan Aero as well! There are other factors to take into account – around this part of the world we have Common Markets and Customs Unions which complicates any calculations you may want to make. In other words, say I live in Namibia and want to purchase a car in South Africa [which initially was imported from say Europe] (we only have dealers here and no corporate representation from the auto makers): since Namibia and South Africa belongs to the same customs and a monetary union, the rate of customs duty is 32% and is the same bar the local taxes (15% VAT in Namibia and 14% in South Africa). So, if I were to import say the 9-3 Sport Sedan Aero today from South Africa, I would pay the dealer in SA the invoice price less the VAT @ 14% and then cough up the Namibian 15% (which is actually 16.5% for imports). What is included in the sticker pricing is the 32% customs duty on the FOB price, the advalorem duty of 7% based on the value and of course the rest of the associated gamut of costs (shipping etc).

    Apart from that, the fuel pump price (95 RON) is town dependent and is between ZAR6.91 – 7.23 per liter. 1 USD = 7.29 ZAR and for this part of the world, this is excessive.

    Finally, I understand that the facelifted 9-3 sport sedan will hit our shores sometime in Q1 2008. No word as yet on the Turbo X yet.

  25. Gripen – man, sometimes I think we were twins separated from birth – I couldn’t agree with you more…once again.

    btw – all my relatives in Europe get AT LEAST 6 weeks, not 5.

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