An interesting front-page story in Automotive News Europe (ANE), a pan-European fortnightly paper aimed at those working in the automotive trade, arrived on my desk today, November 19. (ANE is one of the most highly regarded automotive trade titles in Europe and part of the renown Crain Communications publishing group headquartered in Detroit).

I work as a PR consultant to a Norwegian-Swedish shipping company, Wallenius Wilhelmsen that ships Saabs globally and an autologistics company, Richard Lawson Autologistics, which handles apart from inland deliveries, vehicle preparation and management and remarketing of premium cars in UK and Germany. I drive a 2000 model year Saab 9-5 Aero estate automatic.

In summary the font page story says that General Motors is putting together an emergency turnaround plan to deal with the rapidly deteriorating financial situation at Saab.

A weak dollar combined with heavy new model development costs and the slower, difficult launch of the new 9-3 have hit a time when sales are collapsing.

Internal forecasts show operating losses (in Saab) of 500 million euros this year, or 4,000 euros per car(!). Saab reported an after-tax loss of 35.4 million euros in 2001, using Swedish accounting principles.

Saab will fall well short of this year’s goal of 140,000 sales. The company now expects to finish the year at around 125,000 units. Saab’s own forecast of 250,000 sales by 2005 has been cut to 200,000 units.

The company’s sales in Western Europe were down 19.1% in October to 5,000 units.

GM Europe executives say the situation is severe.

To help the turnaround General Motors has moved two US executives to Sweden. The turnaround plan is called, Viggen (now where have I seen that name before?). Both the cost and revenue side of Saab’s business are under pressure. Along with the extra investment needed to bring out the 9-3, an upgrade of the company’s lone plant in Trollhattan, Sweden, has been more costly than expected.

Meanwhile Saab has been hurt by declining transaction prices (caused by a weak US dollar) and increased incentives. Sales have fallen this year in all the company’s major markets, including the USA, UK, Germany and Sweden. (The USA accounts for more than 30% of global sales).

One key measure to stop the bleeding is the immediate halt of the posh “Saab Unlimited brand centre showrooms in airports, and expensive shopping locations in cities such as Berlin, Munich, Hamburg and London.

The turnaround team is investigating whether to combine Opel and Saab showrooms in key markets.

Saab also faces other problems. Quality problems have arisen during endurance testing of the 3.0 litre V-6 common-rail diesel sourced from Isuzu. Delivery and production of the engine have stopped and aren’t likely to begin again before March 2003, leaving Saab with a big gap in its diesel line-up. The new diesel was launched earlier this year on the 9-5 and was also planned for the 9-3.

So are we seeing the beginning of the end of a distinctive brand?

What a depressing report.


*.....and the slower, difficult launch of the new 9-3 have hit a time when sales are collapsing.[/b]It's seems true because I've just not seen any 93 SS here or abroad.

The trouble is one of the main reasons consumers buy a particular car is an emotional connection with the brand - and one way (or perhaps the most significant way) of creating that connection is "how the car looks" ie the design.

A car may be one of the best handling cars around but that's not enough.

True I was pleasantly surprised by the appearance of the SS in the flesh - 100% better than any photograph - it is still quite conservative and "me too".

The trouble is BMW 3 series, Audi A4 and Mercedes C class all have very distinctive, dynamic design qualities and brand values - especially when it comes to "touchy feely" bits (just compare their quality of cabin materials with the 93 SS).

I very much hope the 93 SS is a success - in the UK March 1st 2003 will be a watershed - I just hope it doesn't become as common as a 3 series

I quite like the new 93ss too, and hope it sells well.

I've not yet driven one but have sat in one (broke a few switches, knocked that funny plastic thing off next to the handbrake etc.

Apart from the Interior trim (cheap) and the silver stuff round the dials (tacky), it looks and feels ok.

Will I buy one? No, unfortunatly not, and neither will any of my many saab driving friends, they ALL want hatchbacks and are all in different stages of trying to find '98 9000 CSE's or similar (there isn't anything newer)

Andrew

they ALL want hatchbacks *[/b]NOW who says I'm the only one?

It'll be really sad if GM don't let the 9-3SS get off the ground, as its advance sales do seem pretty good.

I think we can kiss the 9-3x goodbye, whatever

However, Car magazine reported that the GM head honchos have given two projects the go ahead in the bigger scheme of the turnaround plan:

1) The US get their coveted Caddy-based 9-7 SUV after all (barf)

2) Mainly for Europe, the 9-2 sporty premium hatch will become reality in 2007, and, wait for it, it will probably be based on the next-gen Scooby Impreza platform!! Ooooh yes, indeedy...

But why can't GM allow their subsid companies to build original cars. All they seem to do is bastardize existing models.
Boring .

If 'bastardizing' means they make GM cars look pretty reasonable, have excellent ergonomics and safety, go like stink, handle and stay in one piece - like they did with the 9-3 Sports Saloon, well, that's quite an achievement.

Different is only good when it means better. With the classic models, everything that was different to their contemporaries was because of a good reason. Mostly, the rest of the industry has followed suit.

I expect a Saab to be a prime example of ruthlessly logical engineering and therefore superior in its core functions of driveability, ergonomics and practicality. In the earlier years, that meant that they were borderline eccentric becuse the rest of the automotive world was concentrating on either churning out as many cheaply engineered basic transportation devices spiced up with a bit of styling to make them appeal to the public taste, or on passing fads and fashion statements. Now engineering standards have caught up everywhere in the automotive industry and that means that sometimes, you can't do things really better than current established practice, so unless you accept your product to be worse in that respect, you'll have to conform. Boring, eh? But would you want Saab to make a stupid fashion statement a la the New Beetle, for difference's sake? I for sure wouldn't.
Mind you, a 99 Turbo was three times as expensive as a Cortina back then. If you don't mind paying three times as much for a 9-3 as for a Mondeo, I am sure the Trolls could differentiate their cars further from the pack, again, in aforementioned areas.

If it were me, I would make Saab leaner and more specialist. Kind of what Porsche is in the 2-seater sports car category: large enough to keep station with MB, BMW, Audi techology, small enough to be focused and appeal to the low volume/ bespoke sports car market too. In my view, Saab should offer the operator (driver)-centered, high on functional superiority, low on fads approach (complete with the whole jet fighter pilot connotiation thing at an emotional level) in every segment it competes in, add a degree of bespokeness, and command a premium price for it just like it did in the days of the original Turbo. Which would mean less, but more expensive cars.

But then again, I don't have to take responsability for x-thousand Swedish and Finnish factory workers, tell a large part of them they will not be needed anymore, negotiate with all the parties involved, restructure operations, sell the plan to the GM bosses who are historically weak in niche/premium marketing, and while we're at it, middle/long term strategy (they don't need to - by the time the flipside of their decisions shows itself it'll be the problem of the next GM board to solve) and convince the market that Saab is a credible low/middle volume maker of cars that are expensive but not loaded with all kinds of mass-market goodies - a popsition it did have from the late Seventies up uintil the lateish Eighties, but not many people will remember that.

It's a shame to hear that Saab's not doing as well as we'd all like - after all, it's cash-rich car firms that come up with the concepts and niche models that make life interesting.

Good to hear that GM appear at least vaguely serious about turning the marque around, though, I just hope they keep the badge-engineering to a minimum http://www.saabscene.com/forum/images/smilies/rolleyes.gif

James (who wants a hatch too!) http://www.saabscene.com/forum/images/smilies/fawlty.gif