Saab does not so well in JD Power Retention Rankings – but still beats Volvo!!

Sometimes when life gives you lemons you’ve got to go make lemonade.

Saab sales

I’m not sure how well Saab has done in this survey in the past, but I’d venture a guess and say they could, and should do better in future years.

There’s got to be a fairly big mix of factors here. Assuming the cars being traded are around 3 years old, you’ve then got some of the Saab quality issues from the early 9-3 years coming into play.

You’ve also got a bunch of people, sadly, who believe that an automotive purchase – one of the bigger purchases you make – should be mostly about providing simple and adequate transportation. The biggest beneficiaries of this, of course, are Toyota, Honda and Lexus.

With improved quality ratings, which will come, Saab should hopefully improve on scales like this in coming years.

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18 Comments

  1. Why would lexus be a benifactor of simple and adiquate transportation? Toyota and Honda definatley, but I think the ones that are really showing that in their numbers are Chevy and GM.

  2. I think that people that drive Saabs are also much more likely to keep the car longer than about 3 years which is a factor when comparing to Lexus, BMW, etc. since those cars are ALL leased for short terms here in the US.

    Chevrolet also falls into the ‘car as plain transportation’ category AND Chevy and Ford also benefit from the HUGE customer loyalty in the pickups and SUVs. As a long-time GM owner, I would have a very tough time buying a Ford truck, let me tell you, and I actually THINK about this stuff!

  3. I can tell you in the USA the people who are leasing are looking for the “Flavor of the month”. They are buying payments not product. Also Saab teased people with the 9-3 Linear at a price point and now it is gone. people who streched to get into that car are not going to pony up for a car up to $3k more.

  4. @3: let’s not make stuff up šŸ™‚

    GM’s current lease penetration rate is in the range of 17 to 20 percent,

    Leasing was 15 to 17 percent of new vehicles retailed” several years ago, (Nissan Motor Acceptance Corp). Now it’s 22 to 23 percent.

    The luxury brands are much higher, but still only in the mid 40% range. That’s a long way from “ALL”. (I think I read that on a J.D. Power report.)

    Regardless, even if folks keep their Saabs longer, there are still Saab buyers looking for new cars every year. That logic might apply if Saab started selling cars 3 years ago and Saab owners kept their cars for 5 years. Also, why would you keep a car long you don’t like? If you keep it longer, I would think you’re more likely to buy another one…

    We have 2 Saabs and I get a new car every 3 years (yep, I lease). My wife keeps her’s for about 6 years.

  5. Steven:

    I’ll step aside since you seem to know better, however, when we shopped for my wife’s now-gone Avalon, the salesman at the Lexus dealer here estimated their lease rate to be “all but a handful” of customers. The Infiniti dealer said similar things, but wasn’t as certain. I extrapolated on their comments.

    Also, realize that many vehicles are leased to customers by companies other than the captive finance arms which would NOT fall into the ‘lease’ purchase statistics. That would be a cash transaction to the dealer.

  6. A major contributing factor to the low ranking surely is the poor model line-up. If you leased a 9-3 Sport Sedan in 2003, and your lease was up in 2006 or 2007, what else would you get but the same car with very insignifican mods? It looks the same. On the other hand, a 2003 Audi or BMW leasee could get a face-lifted car in the same category or cross-shop for an SUV, a bigger sedan, a CUV, what have you.

    Moreover, if I take a quick look at my friends and colleagues I could also say that a lot of people do not buy the same class car after a few years. Some want to go bigger and are looking at an SUV or a CUV – we have several people on this very site alone, who are “under pressure” from their significant others. Others may want to downgrade to something more efficient and lower their payment by a couple of hundred quid. I could personally recall of a few people who went out and bought Audi A3s after their A4 leases were over.

    So in short, we could once again conclude that Saab desparately needs more models to cover the market, and once those new models are released a fresh face-lift must be brought out every 3-4 years, to keep the cars relevant. The good news is that Saab and GM seem to be getting the message at long last.

  7. Got to agree with Kroum. A wider range of models would lead to better retention numbers.

    Look at Mini at 21.1%, Scion at 30.8% and Land Rover at 31.1%. All have very limited model line-up and and poor retention numbers as a result.

    From JD Power Web Site:
    “The study finds that one of the most influential reasons that customers do
    not purchase another model in the nameplate’s lineup is that the brand
    doesn’t offer the type of vehicle they were looking for. A large number of
    customers who defect to another brand do so because they believe their
    previous manufacturer does not make the type of vehicle they want when they
    re-enter the new-vehicle market.”

    SAAB Results (industry average)
    2007 33.5% (48.8%)
    2006 33.4% (47.9%)
    2005 29.6% (49.6%)

    At least they’re headed in the right direction with their limited line-up. And don’t forget, Saab is sure to lose all the 9-2 buyers when they get a new car, further dragging down numbers for the next few years.

  8. Speaking for the US only, I think several things would impact Saabs lower retention rate:

    1. Lack of AWD/4WD — Saabs are strong in the Northeast and other areas with bad winter weather. Traditionally Saabs were known for their great winter handling with front wheel drive, but other manufacturers (especially Volvo & Audi) have offered AWD for years on regular sedans and wagons and Saab has steadily had customers defect to other brands to get AWD.
    2. Saab’s are priced and positioned as an entry level premium brand. Many owners step up to a Saab from mainstream brands. Over time, as their careers & paychecks grow, they step up to even more premium/expensive vehicles. While they may love Saab, they may love BMW, Mercedes, etc. even more.
    3. Product lineup hasn’t changed much from 2003 to 2007 — as mentioned the 9-3 & 9-5 series haven’t changed much, so a person who loves their Saab has little reason to trade-in and re-buy if they love their car and thus the real Saab lovers aren’t re-buying and raising the retention statistic.
    4. Quality issues – if someone got a poor ’02-’03 (which was the first year of the sedan style?) 9-3, and they had problems, they probably didn’t re-buy or re-lease.
    5. The 92X debacle – someone who got a 92X and their 2 or 3 year lease ended might not stay with Saab. First there isn’t a model offered at as low a price now, and they may have been turned off by the quality of their car. Also, with a 92X, they didn’t get the real Saab experience, so they might not be engaged enough with the brand to bother looking for another Saab. Lastly, many 92X buyers only bought it because either they got a blowout deal, or they knew they were getting a Subaru with a better warranty and free maintenance. These last types of buyers didn’t really care about Saab and have no reason to come back, unless Saab is going have a blowout deal on some other model.

    So that’s my thinking behind where Saab is.

    I think it’s interesting that Chevy and Ford are so high. As mentioned earlier, pickup truck buyers are extremely loyal to their makes and that probably has a big effect. But, also, I think if a buyer isn’t looking to move up market to a more premium vehicle, then you are going to keep buying from the same domestic manufacturers you’ve always bought from.

  9. Also, when Saab brought out the 97X, I remember Saab’s press release said something about their own research showed the over 30% of Saab owners to didn’t buy another Saab left Saab because they bought an SUV from a different manufacturer since Saab didn’t offer an SUV. I think there was probably an even higher percentage who left Saab because they didn’t offer AWD (whether in an SUV or car).

  10. Hey, Chevy beat Ford, that makes me pretty happy.

    I won’t really pay attention to these numbers until at least 2009 as far as Saab is concerned.

  11. This is way off this particular topic and may have been discussed in the past. I spoke with a 9-5 owner recently who stated that SAAB production was being moved to Germany. What’s the real scoop and where do I read more if it’s true. This individual stated the move was to reduce production costs. Mexico would be cheaper or perhaps China.

  12. The 9-2x numbers will be a moot point, simply because there were not that many 9-2xs built/sold.
    The 9-7X will be the real test. I think most people moving into a 9-7X haven’t owned a Saab before, and a fair number of them (from our experience in the Northeast) have added a 9-3 to their family.
    The retention numbers should go up. Don’t forget, in addition to the regular 9-7x buyers you have the new 9-3, the 9-7x aero, the 9-3 Black turbo, and 9-3 AWD around the corner.

  13. volkswagen. 8 models; yet, a lower retention rate than saab.

    hummer. 2 models; yet, a higher retention rate than saab.

    it seems like having a lot of models only goes so far in the retention game.

    also, it could be that the high-retention-rate brands have either:

    a) cultivated a niche (e.g., hummer); or

    b) managed to figure out what it takes to make a repeat buyer. in some cases, it’s offering other models; in others, the aura of the badge. (or, a combination of both.)

    currently, saab doesn’t have the luxury of offering lots of models. therefore, it has to rely on a niche quality (unlikely because there is no hatch–ahem–and there are lots of brands offering sedans, suv’s, and stationwagons). or, it has to rely on the aura of its badge. i think it’s the latter, but it won’t go far enough, especially if new models are not more iconic.

    one of the justifications for the mis-executed 9-7 was that 1/3 of saab owners replaced their saabs with suv’s. well, that may have stemmed some of the blood letting, but saab is still well below the industry average in repeat brand buyers.

    offering more models will help saab, but until it figures out how to make buyers come back for more, it will still be chasing the retention average.

    there doesn’t appear to be a “one-size-fits-all” solution, but certain things shouldn’t be ignored. for example, xwd drive will help, but it’s a luxury (like “onstar”) that won’t translate into being a “must-have” item, unlike basic awd. and pricing like some sort of a 3-series, c-class mobile, without the requisite performance, quality, and/or cachet shouldn’t be taken lightly.

    the “loyalty” discount must still help, though.

  14. Where Saab is concerned this might have something to do with a lack of new product. Say you leased a Saab three years ago and it’s time to turn it in. You have the same choices of vehicles now as you did three years ago. Maybe you really liked your Saab, but enough to sign up to get the exact same car (with some minor improvements) for another three years?

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