For the record, I think the answer to the question is ‘Yes’. But it’s worth exploring nonetheless.
There are plenty of cars that don’t get sold in the United States. Alfa Romeo, Peugeot, most Fiats, Renault, Skoda, just to name a few. Even Volvo have been re-thinking what they offer in the US and plenty of other car companies offer a restricted range, keeping some of their hotter models away from the US.
First and foremost, the margins are so small in the US market. You really need to have the economies of scale that Saab won’t have (for some time, if at all) to drive the cost down. Local manufacturing helps, too, as it avoids most of the freight costs that overseas manufacturers have to deal with.
The reason why margins are so small, of course, is that the US is such a cutthroat market. I’ve covered it many, many times over the years, but new car prices in the US are very, very low compared to nearly every other market.
Some of you might remember my Turbo X comparative price chart from a few years ago…. (click)
That pretty much sums it up. That was back in 2008 and nothing’s changed from then to now.
US customers are very vocal, very aggressive, demanding the most features and at the absolute lowest price. The majority will unashamedly abandon you if you don’t meet those demands. Unless a product is overwhelmingly compelling, it’s likely that it will win the attention of only the most rusted on Saab fans.
Let’s assume a best case scenario and say that a re-born Saab may be able to manufacture the 9-3 in the near term after takeover, perhaps after modifying some bits and pieces. It’s not going to be a new car by any means and whether or not it would be beneficial to the brand to sell that vehicle in the US would make for an interesting discussion. The 9-3 is still an excellent car, but the automotive press in the US won’t be gentle when it comes to pointing out its ageing platform. Unless any pre-sale modifications are substantial, it’s arguable that an ageing 9-3 being the debut vehicle from a re-born Saab might actually be damaging to what should be a brand aspiring to move upmarket (for reasons discussed earlier in the week).
Another point to consider is the advertising investment required in order to make a dent in the US. It’s one of the world’s noisiest markets, requiring BIG dollars to make an impression. You could easily make a case for a new corporate owner keeping their powder dry for when they’ve got a new car to debut there.
Of course, the reason Saab should go back into the US market is because it’s still a place with huge potential. The brand is known there, it has a following there and it will have customers there. Those brands that don’t sell in the US are doing OK, but the US is still widely regarded as one of those essential markets for a successful company.
Over all, I think it will be important for a re-born Saab to return to the US. Any debate on the subject might relate to the timing. Perhaps they should wait for a genuine new vehicle to be ready prior to a re-entry there. They can work on established European markets first and build them as a beachhead prior to marketing in the US. There were plenty of European markets that should have done better for Saab in the last few years and concentrating on those, with their higher margins and cultural similarities might prove to be a better initial strategy.