By on June 13, 2011

OK, so it’s a somewhat facetious headline: as an auto manufacturer, Saab either builds and sells cars or it disappears. But in the aftermath of Saab CEO Victor Muller’s pledge that “We will definitely ensure that this [production stoppage] will not happen again,” Saab’s most recent shutdown sent shockwaves of concern through the Saab community. After all, Saab’s official line is that “we knew this would happen,” a position that’s more than a little at odds with Muller’s now-broken promise. And though the just-signed Youngman deal could mean more cash with which to get production at Trolhättan back up and running, there’s a bigger question that remains unanswered: why restart production at all?

The question occurred to me yesterday, when I drove past the area’s only Saab dealer and saw a stack of untouched, brand-new 9-5 sedans sitting, forlornly on the lot. Everyone knows that Saab’s sales have been crashing for some time, but right now things are so grim, Saab’s US dealers don’t need a lick of inventory. With 3,115 units sold in the US year-to-date, the latest Automotive News [sub] inventory data shows  that Saab dealers have no fewer than 4,000 units on their lots. That means that, as of June 1, Saab had 248 days of supply, as the brand’s US sales network is averaging a mere 2 sales per dealer per month (Saab shares the latter stat with Aston-Martin, Maserati sells twice as many cars per dealer). Sure, the Saab faithful are impatient for their custom-ordered models to roll out of the Trolhättan plant, but Saab’s dealers probably couldn’t care less when production restarts again. After all, if it ain’t selling, why build it?

Well, that was supposed to be a rhetorical question, but it turns out there’s an answer after all: Saab has to restart production because it has a new US sales boss promising to double volume and hit 10k units this year. Former Subaru sales man, Tim Colbeck promises Wards Auto that Saab will double its volume this year (it sold 5,455 last year), meaning it will sell over 10k units. That means Saab is going to have to sell every item in its inventory plus 900 pre-ordered 9-4X CUVs, and another 2,000 vehicles, presumably the new 9-4X. But how precisely Colbeck expects to make that happen is still something of a mystery. Monthly sales dropped from over 1,000 units in December to 385 units last month. If Saab does hit 10k units this year it will be because of the 9-4X… which means there’s still no real reason (as far as the US market is concerned) to restart Trolhättan.

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52 Comments on “Why Saab Doesn’t Actually Need To Restart Production...”


  • avatar
    gslippy

    Here’s a possible stretch answer to the question: “To retain its skilled workforce”.

    I want whatever Mr. Colbeck is smoking.

  • avatar
    mjz

    Why doesn’t Renault buy Saab? I recently read that Renault is looking to expand into the luxury market in Europe. This would be a perfect pairing as both are rather quirky brands. It would give Renault an instant entry into the higher end market, and provide Saab with a much needed shot of confidence. Carlos, are you listening?

    • 0 avatar
      gslippy

      Because Renault doesn’t want to lose money. It’s the same reason Pontiac, Hummer, and Saturn became orphans.

    • 0 avatar
      mhadi

      Also because SAAB is not a luxury brand. It will do nothing for Renault.

      Renault once wanted to takeover Volvo, but Volvo’s board refused because Renault was seen as a weaker partner and techologically inferior. 30 years later, Renault did not even bother bidding for Volvo when Ford wanted to sell it. They would hardly go for a brand that has nothing to offer – even the 9-5 is said to be non competitive with comparable cars on the market.

      • 0 avatar
        Oscar11

        Saab has traditionally been regarded as an entry level premium brand. Unfortunately the GM era for a long time made them use inferior parts and outdated models, not to mention the terrible rebranding of Chevrolet cars and what not. This changed with Saab 9-5 which was the first new model for a long time and with over 80% of the parts developed in-house. It has received praise in reviews. Deemed by many to be better than class equivalent Volvo S80, and by some testers Audi and BMW as well. The problem now seems to be short-term financing. They have plenty of orders but aren’t building anything. Future is uncertain. Much depending on the Chinese investors.

        Renault wanted to take over Volvo not 30 years ago but during the 1990′s, or some kind of merger (I don’t remember). It was mostly based on some fauly belief that fuel cells would dominate automobile markets in a few years time and the Volvo managment thought huge amounts of funds had to be put into that research.

        During the global financial crisis a couple of years ago investors and institutions were focusing on bonds and gold, buying car companies were last on their lists. Obama even nationalized GM, the second largest car manufacturer in the world, the other option would have been bankruptcy.

        Ford was desperate to not get into the same situation as GM. They only had one brand left that had a reasonable chance of selling on the international market situation and that was Volvo. A strong brand and previous cash-cow.

        As for Renault/VAZ/Samsung etc. they are a partially state-owned company that make cheap cars. Upside is that they have a decent market share in several big markets. During the global financial crisis Renault had a hard time. Sarkozy made a comment on how no French car manufacturer would go under on his watch.

        Volvo Cars is back in it’s old tracks with estimated record sales and record profits in 2011. So far this year they have been the brand that has increased it’s global sales the most. In technology and research they are ranked high in most areas. Volvo Group is also doing great, with among other things Volvo Trucks remaining the second largest manufacturer in the world.

    • 0 avatar
      Bryce

      SAAB aint a luxury car never was its always been a bitza and Renault is stuck with Nissan

    • 0 avatar
      Paul W

      Because Renault/Nissan just brought Infiniti to Europe.

  • avatar
    KitaIkki

    @mjz

    Saab? A luxury brand? Maybe it’s priced like a luxury brand, but the sales numbers indicate customers are not voting that way with their wallets.

    • 0 avatar
      krhodes1

      That’s the problem. Saab is not and never has been a luxury brand. That was GMs bright idea. Saab has always stood for practicality above all else, really, they should be in the same market niche as Subaru. But the problem is they are an extremely high-cost producer, so the only way they can possibly make money is to try to get the prices thier MSRPs suggest. But nobody is willing to pay BMW money for a Saab. The cars are just not THAT good.

      • 0 avatar
        tonyola

        Don’t blame GM for that one – going upmarket was Saab’s own doing. What do you think the 900 and 9000 were about? The 900 was an attempt to push the 99 into a higher price bracket. It worked pretty well in the early 1980s. But then Saab tried to break into the BMW/Audi market with the 9000. It failed, at least in the all-important US market. And that’s why Saab was near death by the time of the GM takeover.

    • 0 avatar
      SVX pearlie

      It’s a Euro-Buick.

      • 0 avatar
        Sigivald

        Why can’t you people understand that having the ignition in the transmission hump means it’s a luxury car?

        Damn you!

      • 0 avatar
        SecretAznMan

        You say that like it’s a bad thing. Or did you mean it as a good thing? 1. The Regal is basically a Euro car. 2. GM has managed to actually add some upper crust aura to this once lackluster brand.

        Saabs are not bad cars. They’re just priced as better cars. I wouldn’t group them with Subaru though.

      • 0 avatar
        CJinSD

        Subaru has moved upmarket since the days of the DL, the GL, and the BRAT. The entire US car market has moved upmarket since the days of the BRAT. Still, I think it is fair to say that Saab’s demographics have been eaten up by the Mini Cooper in terms of customers looking for something unique, by Subarus in areas where Saab once stood out for snow traction, and by the Prius in granola circles. Survival would be an accomplishment.

      • 0 avatar
        SVX pearlie

        Dollar for dollar, Subaru kicks the crap out of Saab, doing everything that Saab used to do, but better.

      • 0 avatar
        SVX pearlie

        @Sigvald – I always thought the ignition on the center console was to protect the driver’s knee in a crash – safety from the only Swedish carmaker safer than Volvo…

      • 0 avatar
        Bryce

        Its a Swwedish Vauxhall with none of the sporting heritage

      • 0 avatar
        Signal11

        Subaru’s been making better Saabs than Saab has for at least a decade now.

      • 0 avatar
        Japanese Buick

        @svx_perlie, re: keys in the transmission hump: that actually makes sense. When I’m driving my Miata and the keys dangling from the ignition are digging into my knees, the thought that if I have a head-on with the keys like that I might very well lose my right leg below the knee, does occur to me.

        I really need to get a keyring that allows me to detach the Miata key and put the others away.

      • 0 avatar
        CJinSD

        Didn’t the key in the console also allow the manual shifter to be locked in gear for anti-theft purposes? This was more important when more cars had manual transmissions, as locking an automatic’s shifter is easily accomplished with the ignition key in the conventional position now.

  • avatar
    Tstag

    SAAB should merge with Lincoln. It could pull out of the US and Lincoln could rebadge some decent cars. SAAB could be Lincoln’s global partner giving both brands volume…

  • avatar
    CJinSD

    I was looking at a 4 year old Automobile magazine and something struck me. The Volvo C30 is the Saab many enthusiasts think Saab needs. In size and price, it is about what a new take on the 99 Turbo would be. The reviewers even said the standard turbo engine suited it perfectly. Most people who’ve seen one have had a pretty favorable reaction to the styling. Volvo has a relatively large dealer network, and they were at least on customers’ radar a few years ago. Stil, the C30 sold like…, like a Saab actually. There just isn’t a market for Saabs anymore.

  • avatar
    JMII

    As a C30 owner I agree. In fact the other car my wife considered before we grabbed a used C30 was… wait for it: a Saab! We wanted something different + turbo + hatchback + touch of luxury/upmarket + euro-ness. There is not much to choose from here in the US and GM messed up Saab too much. My wife hated the interior, especially compared to Volvo who builds simple, clean interiors. Plus nobody makes more comfortable seats then Volvo.

    I blame the lack of C30 sales on two main factors: 1) No marketing – people have no idea the car even exists and 2) Cost – new the darn thing is priced in low $30K range for what is basically a 2 door MazdaSpeed3 hatch. However the C30′s lack of popularity is actually what sold us on the car. Sure we could have grabbed an Infinity G35 Coupe like everyone else but the C30 was just too cool to pass up.

    • 0 avatar
      John Horner

      The funny thing is that the C30 suffers from the same problems the Volvo 1800ES of 1972/3 did. Too much money for what it is, and an US market not exactly thrilled about hatchbacks.

      Don’t get me wrong, I like the 1800ES so much that I have a very nice one and enjoy it as a weekend car, but I’m very clear that it was a sales flop in its day.

      • 0 avatar
        CJinSD

        The C30 has a base price of $24,700 + $875 destination charge. The national Volvo lease deal is currently $279 a month. I will concede that I’ve chosen to spend a similar amount on other cars a few times since the C30 has been on the market, but that doesn’t seem like such a ridiculous amount for a european coupe when the dollar is in the toilet and I know someone who paid far more for a terrible GTI. For someone who lacks my aversion to turbocharged cars, it sounds pretty reasonable to me.

  • avatar
    snabster

    Well, for starters you’re starting production to produce the Chinese vehicles that we prepaid.

    SAAB sales in Sweden were stabilizing, and UK sales also had some rebound.

    I don’t have the figures right now, but Feb-March this year global sales were actually perking up. The US projections sound about right after you throw in the 9-4x sales. I also think the 9-5 wagon will have some fans.

    The problem for SAAB isn’t on the production side. Money can solve that. But such a low volume of sales make it hard to keep a dealership network alive in the US. Smaller markets such as the UK and Sweden might be easier.

  • avatar
    65corvair

    If Saab has three models, they sell 100,000 each world wide, for 300,000 a year, they still won’t show a profit and have enough money to invest in future products. They are no where near 300,000 sales a year.

    There is no point to the brand anymore. Sad to say, but now is to wind down operations and have found memories of the real Saabs of 70′s and 80′s or when ever they had great cars.

  • avatar
    SecretAznMan

    Saab better ratchet up those incentives as soon as production starts up to clear out the cars on the lot as Ed mentions. I think Saab is gonna have to accept that to survive, they need to get product out the door and off the lots with a profit hit. In this case, meeting the sales targets should be doable.

    If they don’t, then Ed’s right about not needing to start up production. I think Ed should write all the Saab related articles. While he may have an axe to grind with Saab, he’s not on an all out witch hunt like Bertel. There’s at least a semblance of reason and objectivity.

    • 0 avatar

      Secret: I’ve been losing patience with “bias police” comments recently, so don’t be surprised if comments like this disappear in the future. I really appreciate your ongoing participation in our discussions here for nearly two years now, and I’m sorry that our Saab coverage has rubbed you the wrong way… but believe me, neither Bertel nor I want Saab to disappear. We’re just two guys trying to explain the world of cars in our own unique ways. Neither of us mind healthy debate or honest disagreement with our work… but there’s a longstanding policy at this blog of not discussing “editorial policies” in the comments section. Please keep comments and critiques on the substance of the topic.

      • 0 avatar
        Adub

        That was a completely fair question to ask: if it isn’t selling, why build it?

        I am perplexed that some readers dislike the candor of the situation. Say what you will, this website is generally honest. Brutally honest. RF was spot on with his GM Death Watch, and everyone who disagreed ended up eating crow. You can’t fake reality.

    • 0 avatar
      CJinSD

      Saab dealers were advertising ten grand discounts on both their least expensive and their newest offerings in recent months. Considering that even discounts as high as 30% didn’t empty the lots, I’m not sure what they should do. Their existing customers are already stuck with residuals that must be the worst around. I think their moment is past. As attractive as a Saab 9-3 for $23K out the door might seem, even at that price consumers are faced with the very real possibility that there won’t be a dealer operating when it breaks, and history says it will break.

      • 0 avatar
        krhodes1

        Actually, as long as you bought the car deeply discounted, the resale is pretty good. I lost ~$6K selling my ’08 9-3SC after 26 months of ownership. I don’t think you can complain about that all things considered – how much would you lose on a $24K Ford Fusion doing the same?

        I paid ~$24K, sold it privately for $18K. You will, of course, get utterly screwed if you try to trade one in. But given that Saab was not leasing during Autogeddon, there are very, very few 2-3yo still under warranty Saabs to be had relative to years past, so nice ones go for decent money to those in the market.

      • 0 avatar
        CJinSD

        I’ll concede that I didn’t see any Sport Combis advertised as being in dealer inventories, but I knew someone who spent many months trying to unload her low mileage 9-3 convertible that she advertised with 50% depreciation after 36K miles and 3.5 years. I don’t know what she finally got for it, because I tried to keep my distance.

      • 0 avatar
        krhodes1

        Well, if she paid anywhere near retail 4-5 years ago she got screwed. I feel bad for folks who bought a year or so before I did, they paid a lot more for thier cars than I did for mine.

        For the $24K I paid for my 9-3 it was a screaming bargain, but at the $36K MSRP I would pay a little more and get a BMW. Which is exactly what I did this time around. 328iT.

        I really like Saab, but I think they are ultimately doomed. Which is too bad, the world needs interesting cars, and even the relatively bland current product is pretty interesting compared to the sheer boredom being peddled by most makers these days.

      • 0 avatar
        snabster

        And that is exactly their problem.

        dealers ordered too many of the base 9-3 with automatics, while the convertibles and wagons all sold.

        Hell, I wouldn’t buy a 9-3 Sedan with an automatic for 23K.

      • 0 avatar
        CJinSD

        So Cal area Saab dealers had plenty of 9-3 convertibles sitting on their lots throughout the implosion of the brand with discounts comparable to the 9-3 sedans and 9-5s. I didn’t see ads for the Sport Combi, as I mentioned above, but the convertibles were as dead in the market as any other Saabs.

  • avatar
    GS650G

    I was trying to figure out if we needed SAAB in the marketplace when I realized consumers already answered that question.

    The SAAB faithful and indeed the management are convinced the NEED to make these cars or the world will suffer for it.

    I’m sure people thought the same way about Studebaker, Olds, Rambler, Nash, and a long list of other cars that actually differentiated themselves in the marketplace (Ok maybe NOT Olds) but we seem to be moving along nicely without many brands.

    Somebody tell me 3 things SAAB has or offers that is so unique and special, so desirable and practical, that the automotive world will regret the exit of this brand from the market.

    Yeah, that’s what I thought. Crickets.

    • 0 avatar
      krhodes1

      A few things Saab brought to the table:

      1. A unique blend of performance, efficiency and practicality with the Combis – they are the true Saabs, not the boring sedans. My Combi would do 0-60 in under 7, 146mph, 33mpg on long trips, attack a winding road like a sports car and swallow a 55″ TV in the back. Or a washing machine.

      2. A strong real-world safety emphasis. Not just scoring well on the artificial tests but doing things like engineering the cars so the passengers survive hitting a moose.

      3. Absolutely world class engine-management and turbocharging technology. The Ecotec turbo engine may say GM on it, but that is a nearly pure Saab piece of engineering, and absolutely world-class in its power and efficiency. BMW can’t seem to make a reliable turbo motor to save thier life, but Saab has been doing it for decades.

      But more than anything Saab brought a different and interesting driving experience. If that doesn’t appeal, fine, be a lemming and drive a Camry. The automotive world will be that much less interesting when they are gone.

      • 0 avatar
        bill h.

        My impression is unlike your comments, very few others here reveal actual experience with the cars and how they drive, just stuff like “Subaru kicks the crap out of Saab,” etc. And yet Saabers get accused of being fanbois. Armchair Commentariat, indeed.

      • 0 avatar
        John R

        Hm, sounds like you just described a 9-2…er…WRX.

      • 0 avatar
        SVX pearlie

        I’ve driven a Saab 9000 Turbo, have a Subaru so I can speak a bit toward both.

        1. A USDM Legacy wagon might not be as fast as your “Combi”, but the Impreza WRX/STi hatch easily crushes a Saab 900 / 93. My SVX easily beats the 9000 Turbo.

        2. It’s good for Saab that they relegated Volvo to being the second safest Swedish carmaker. But the thing is, everybody makes a fundamentally safe car from a passive standpoint. From an active safety standpoint, Saab isn’t bad for a car saddled & hamstrung with a fundamentally flawed FF drivetrain, but Subie’s better-balanced S-AWD outhandles a Saab in any weather.

        3. As with safety, turbos have gone mainstream. It’s no longer 1990, when Saab is the only maker of a great turbo 4. The Japanese make much better turbo cars than Saab does, and they extract world-class power from them. GM & Ford are catching up. BMW focused on the linearity of NA engines, so has similar catch-up issues. And those turbos, while great from a specific power / displacement standpoint, never went into a great chassis, which is why Saab is synonymous with the words “torque steer”.

        So when you look at Saab v Subaru, Subaru makes an equally functional, more reliable car, with better active safety dynamics while still retaining world-class power. And Subie does it at a far lower price point, due to far greater volumes and far lower production & development costs.

    • 0 avatar
      SecretAznMan

      As others have questioned, have you ever driven one? I know I never did when I also bashed Saab in the past. Anyway to answer your question, it’s not just three unique things, it’s three things at once that make Saab unique. Turbo, manual, wagon. Add to that +200 HP and +30 MPG hwy. And to the person that mentioned the 9-2 er WRX – do either of those exist anymore? Keep in mind the current WRX isn’t a wagon and gets no where near 30 MPG hwy.

      • 0 avatar
        SVX pearlie

        A WRX is AWD, so has higher mechanical losses and weight, ergo lower mileage.

        That said, the current CVT Impreza is rated 36 mpg highway.

        And my AWD SVX was good for 30+ mpg highway, running 60-80 mph.

  • avatar

    I’m one of the Saab faithful who is literally waiting for my custom-ordered car to be built and shipped to my dealer… but I also follow the industry just enough to know that the outlook for my favorite brand is grim.

    I’ve seen the inventory of the same Saab dealer Ed drove by; they’re advertising their cars across the Northwest on Craigslist. Unfortunately, with Saab’s dead-brand-walking reputation, as well as very little marketing for their products, Saab just isn’t on buyers’ radar in the US. I agree with what Ed says- production is pointless if cars aren’t selling.

    • 0 avatar
      bill h.

      I continue to think that the cars (especially the 9-5) are simply overpriced for what the expectations are in that price range. They really need to make the prices at least $10k less across the board, which reflects the actual transaction prices in the real world. The cars make no money sitting on the lots. But if they are sold even at fire sale prices, they at least get off the lots and into the hands of people who might be pleased with them. That kind of satisfaction can be a better tool than a non-existent marketing scheme and cars perpetually sitting there. And showing up in online searches in a lower MSRP price point has to be a better situation than the current one.

  • avatar
    revjasper

    As an owner of two Saabs, I do love the brand and will miss it when it’s gone. Indeed there is a huge amount of inventory at our (Ed, Kevin and I) area’s remaining dealership. But for me, the dealership itself is to blame. I’m not looking at their inventory new or used due to past behavior of sales, parts and service. The independent shop I’m dealing with for service is requesting that their customers purchase at the next closest dealership, about a 140 mile drive away.

    But TTAC did convince me to also purchase a Panther to park next to the Saabs, so I’m enjoying the sweet ride of an MGM in a different but meaningful way. Goodbye Saab, we hardly knew the new you…

  • avatar
    George B

    I agree regarding Saab and the US market. We’ve hit a natural stopping point where demand is too low to keep the lights on at dealerships. Independent of the US market, I have some doubt that restyled Opel cars built at Trolhättan can earn the profits necessary to fund the next generation of car development. Maybe existing Saab designs and tooling would give a Chinese manufacturer a short cut towards exporting cars. OTOH, buying a short cut didn’t work out so well for the Miami Heat vs. the Dallas Mavericks.

    I have zero interest in buying a Saab at luxury car prices, but a Saab would be more desirable than a Buick or Chevrolet. Might be interested at going out of business prices. What percentage of the replaceable parts on a 9-3 are shared with GM Epsilon cars like the Chevrolet Malibu? How much overlap is there between a Saab 9-5 and a Epsilon II Buick Regal?

  • avatar
    jpolicke

    Unfortunately SAAB is in a death spiral. Any somewhat informed shopper – anyone who does the least bit of research beforehand – will avoid the brand because they don’t want to be stuck with an orphan. Which only increases the likelihood of collapse.
    Also, although I don’t know what the employment situation is in that (or any other) part of Sweden, but if I were working there I would be looking to find other work now and avoid the rush. There have to be some workers there jumping ship, how many can SAAB lose and still be able to run assembly lines?

  • avatar

    Thanx for the chart Ed. Gotta say that pink line (93) and blue (92) REALLY P me off. 2003 was the first year for the NEW 93. I brought the only turbodiesel that resides in NA. This car has been beyond excellent and most of the gas ones have been as well. Look what happened in 04. ALL the ad money was spent trying to sell the NEW? Saburu (92) and the then brand new 93 never recovered. Just another of GMs “Marks of Excellence” I guess.

  • avatar
    glass pool fencing sydney

    The chart offered an interesting result which I think they should work harder to gain much sales in the future. Saab offer a good brand for the people who are on to cars. glass pool fencing sydney

  • avatar
    akkerman

    really great post i really like this post thanks


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