By on July 28, 2008

Built to last?The WTF factor out of GM simply knows no bounds. The AP reports Saab's decision to reduce warranties for 2009 and later model year vehicles. Saab already is in a sales tailspin and is losing GMAC lease support. It seems to me that if a vehicle is designed, built and maintained properly there should be very few powertrain failures between the four year, 50,000 mile "new" Saab warranty and the five year, 100,000 mile warranty in effect for 2008 model year vehicles. True enough, most of Saab's competitors offer warranties similar to the new Saab plan… but Saab is very much the underdog is this market and needs some kind of persuasive selling point. Why exactly does ANYONE buy a Saab instead of a Lexus, Infiniti, Acura, Audi, BMW, Mercedes or even Volvo? GM spokesperson Joanne Krell "said lower costs and a more competitive edge over other importers were factors in the decision." Apparently Saab expects a lot of powertrain failures between years four and five, otherwise there wouldn't be much cost savings to be had. As to the "competitive edge", WTF indeed.

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28 Comments on “GM Reduces Length of 2009 Saab Warranty. Huh?...”


  • avatar
    Runfromcheney

    Your good friends at Autoblog reported on this earlier, and I agree with them that this is a sign that GM is gearing up to dump Saab. I mean, why else would they do something like this?

    Oh wait, this is GM….

  • avatar

    It’s also a sign the situation is beyond dire. They must cut costs in everything they can, even if it hurts.

    Then again, I’m not sure if they make any (considerable) money off Saab, so really, does anyone in GM care if sales go to “0”?

  • avatar
    gamper

    Yeah, a plan to spin off Saab near term would seem to fit with this decision making process.

    Other than that, it doesnt make any sense unless this is simply a an admission by GM that Saabs tend to rack up significant problems after the newly defined warranty period.

  • avatar
    dan8001rpm

    Truedelta got any facts to back up reliability on these “shape appears ass backwards”?. I can’t remember anyone reducing their warranty on cars!
    Hey lets make the wheels sizes smaller for next year as well.That will save a few bucks. Is GM going through ENDAKA like the Japanese did in the mid ninties and decontenting everything? WTF indeed.

  • avatar
    snabster

    This is very depressing news. Saab owner for 12+ years.

    1. This may be an attempt by GM to blow out 2008 inventory with the better warranty. I suspect Saab has has trouble moving product. With no leasing they don’t have a chance otherwise, and by giving owners a chance to get an extra year it may make up for some sales.

    2. The warranty probably helped boost the resale value, and with no leases on the table they don’t care about keeping that . up. The 9-7 has been dead for a long time and with SUV sales trending down that is also not going to move no matter what the warranty.

    3. Selling Saab makes no sense; European sales have also tanked. Almost no Chinese/Middle-Eastern sales. US sales are trending down down down, and with the Krona/Euro exchange rate it makes NO sense to bring cars over here. There are not many dealers, and I would suggest killing the brand at this point rather than a sale.

  • avatar
    yankinwaoz

    That is totally the opposite of what I’d expect a desperate GM to do. I don’t think that they would have any problem taking on a future liability in order to save or earn a dollar today. God knows they did this with job, pension, and health benefit promises.

    If handing out long warranties move metal TODAY, then do it. After all, they have nothing to loose any more.

    On the other hand, I think the warranties offered by Mercedes and BMW suck (only 4 yr/50k). They expect you to pay top dollar for their cars, but their warranties are a joke. So Saab is just getting in line with the other luxury Euro auto makers.

  • avatar
    RobertSD

    This was the biggest “huh” of the day for me. More competitive? She had to have been laughing when she said that. Despite my general defense of GM and Ford on this board, I can still recognize a really stupid move when I see one.

  • avatar
    ZCline

    I really like that new Turbo X. Its about the only Saab I’d even consider. I think they should drop all the others and just sell that. Its a limited edition!

  • avatar
    Ingvar

    She said it all wrong. What she meant to say was: “said lower costs and lower the competitive edge over other importers were factors in the decision.” And what could be wrong with that?

  • avatar
    seoultrain

    So the people who buy Saabs now fit into one of two categories:

    1. They won’t keep the car long, but they can’t lease. So they finance the whole price of the car and get hit hard by depreciation when they go to sell it in 3 years. Many find themselves upside-down and are forced to keep the car longer because the residual is so bad.

    2. They plan to keep the car a long time, but after the warranty runs out, things start to go wrong. There’s nothing as infuriating as paying for repairs on a car you bought new that you’re still paying for. And things apparently go wrong, or else what would be the point of pulling the warranty back?

    Saab is dying a quick death, it seems. I thought only Hummer was on the chopping block, but it may have company.

  • avatar
    Gardiner Westbound

    Why would anyone buy a Saab now when GM has clearly lost confidence in its quality, reliability and durability?

  • avatar
    66Nova

    I had exactly the same reaction when I read this. If GM can cut warranty costs by reducing the length of the warranty, then there must be a high cost of satisfying claims between 50K-100K miles. Wouldn’t the better course of action be to figure out why warranty claims are so high and FIX THE ISSUES????

    Extending warranties makes more sense when you are trying to convince customers that your product is of high quality. I bet someone thought they could make more money selling extended warranties (and don’t we all love it when you get that pitch at Sears??)

  • avatar
    jaje

    How did the Saabaru fare in reliability over the standard Saabs (not looking the Trailblazer rebadge)? Hyundai moved to a 10 year warranty and their sales have grown consistently. You don’t often see MGFRs reducing warranties as it is basically an implied admittance by the MFGR that the cars they are selling are not reliable anymore.

  • avatar
    mel23

    If handing out long warranties move metal TODAY, then do it.

    Especially considering GM won’t be around in 4 years anyway. Lutz and Wagoner must have made this decision themselves.

  • avatar
    cwallace

    Having owned a couple of GM-era Saabs, I can attest to the powertrain failures that happen at 51,000 miles. Oh, and the motor mounts. Transmission mounts. Fuel pump…

  • avatar
    Pch101

    The warranty typically offered on cars in this class is 4 years/ 50,000 miles. Audi, BMW, Mercedes, Volvo, Acura and Lexus all offer warranties of that length; Infiniti’s includes a bit more mileage, at 4 years/ 60,000 miles. So Saab is adjusting to what is typical among the cars that it is trying (unsuccessfully) to compete with.

    Saab sales suck and the warranty isn’t helping to sell them, so there isn’t much point for GM to continue offering a longer one. Saab doesn’t theoretically compete with Hyundai, so there’s no need for the warranty in order to match the competition.

    GM may very well be planning to sell Saab. They could certainly use the cash, although I’m not sure who would give it to them. I’ll start the bidding at $5.

  • avatar
    BuckD

    There’s that trademark GM genius. What better way to tell potential customers that you have no faith in the quality and reliability of your product?

    I picked up a used 2004 9-5 for a song and have been very pleased with it, but the sad fact is that in the “premium” car market, a new Saab–and a 9-5 in particular–just doesn’t rate. GM has somehow managed to utterly annihilate yet another famous nameplate. They took some brilliant but unconventional cars, tarted them up then marketed them to the wrong crowd. How do they manage to screw things up so badly? It’s almost surreal.

  • avatar
    Blunozer

    Wow.

    Just… Wow.

    GM has managed to turn Saab into the Anti-Lexus.

    Saabs don’t exactly have a stellar reliabilty and resale record as is, so what does GM do? Shorten the warrantee!

    I guess their next step is to poke potential customers with sharp sticks when they enter the Saab dealership.

    As was stated, Hyundai fixed their quality reputation by putting their money where their mouth was; longer warrantee.

  • avatar
    JTParts

    First of all with all the wrongheaded decisions GM is making, why would anyone assume that they got this right from their perspective? It’s natural to assume they think this will be a big saver but given the track record, ummm…

    Second, why buy a Saab? well what other car can you cooly reach down between the seats to start? DUH!

  • avatar
    ZCline

    The warranty typically offered on cars in this class is 4 years/ 50,000 miles. Audi, BMW, Mercedes, Volvo, Acura and Lexus all offer warranties of that length; Infiniti’s includes a bit more mileage, at 4 years/ 60,000 miles. So Saab is adjusting to what is typical among the cars that it is trying (unsuccessfully) to compete with

    Thats like saying “the typical VW only gets 27mpg, so we are reducing the efficiency of our engines to match”.

  • avatar
    Pch101

    Thats like saying “the typical VW only gets 27mpg, so we are reducing the efficiency of our engines to match”.

    Not really the same thing at all. Obviously, what you’ve described would involve reverse engineering. Here, GM is cutting out a promotional tool that isn’t successful in promoting anything.

    For GM, this reduces their future liabilities. In terms of competitiveness, it doesn’t change anything, because the cars weren’t competitive to begin with.

    This won’t impact Saab sales much at all, as there aren’t that many sales to begin with. It’s much ado about nothing, because Saab is a big fat Swedish ball and chain that has never earned GM a dime. (That’s GM’s fault, of course.)

  • avatar
    ZCline

    Not really the same thing at all. Obviously, what you’ve described would involve reverse engineering. Here, GM is cutting out a promotional tool that isn’t successful in promoting anything.

    GM promoted this? Was I too distracted by the fighter planes in the “born from jets” ads?

  • avatar

    TrueDelta has no conclusive data on whether the cars experience a relatively high risk of powertrain failures in year five or between 50,000 and 100,000 miles. I have data on only one true Saab, the 9-3, and it was redesigned for 2003. So while the 2003 and 2004 do have higher repair rates than the 2006 and 2007, how much of this is because they’re older, and how much because they were produced early in the model’s run?

    The prevalence of turbos in Saab’s powertrains might lead to higher powertrain warranty costs.

    But, overall, I think GM is desperate to improve Saab’s financials. They’ve publicly stated that they’re losing bucketes of money on Saabs sold in the U.S. because the dollar tanked.

    In a further bid to kill Saab sales, they’ve eliminated the front drive Aero sedan and wagon for 2009. Prices of those cars are now crazy high for a Saab.

    Like someone else in this thread, I like the 2008 TurboX wagon. But the price is far too high.

  • avatar
    John Horner

    One really strange effect of this decision is that a Chevrolet Trailblazer built alongside a Saab 9-7X will carry a longer powertrain warranty than the Saab even though both vehicles in fact have the exact same powertrain!

  • avatar
    Domestic Hearse

    If my 06 9-3 is any sort of barometer for the brand (and I’ll accept one example is purely anectotal), then chopping off that fifth year of warranty coverage is indeed a money-saver.

    So far, after 26k and 25 months of ownership, our car has had just shy of $7k worth of warranty work performed by the dealership. Everything from faulty stability control sensors to the steering system. And there’s an electrical gremlin the dealer can’t replicate in the service stall, and still hasn’t been fixed.

    That’s an annual warranty cost of $3.5k per year so far. Something tells me that the next two years will be even costlier than the first two. So that fifth year of coverage may be quite punishing to GM.

    Understand, all manufacturers have a very good idea when their cars will begin to suffer from major failures. The warranty costs for each model are studied with the same degree of precision as insurance tables…incredibly precise and prescient.

    Yes, yes. I know. Saab only sells eight new cars a year. Understandably.

    Given that nothing good could come from this announcement in the press, that fifth year of Saab coverage must be catastrophically bad.

    I for one wouldn’t want to be on the hook for repair costs year-five on my car. And I won’t be.

  • avatar
    Geotpf

    Saab’s total sales in June 2008 in the US was a mere 1,872 units. 162 9-7xs, 1,442 9-3s, 266 9-5s, and two left over model year 2006 9-2xs. That’s it. It looks like GM is Isuzuing Saab, IMHO. That is, deprive it of anything good until sales get so low that most of the dealers give up voluntarily so GM doesn’t have to bribe them to shut down the brand.

  • avatar
    capeplates

    I have had four SAABs, each racking up over 140000 miles with very few problems. The modern day car, with regular servicing, will give years of trouble free motoring, SAAB is no different.

  • avatar
    bill h.

    capeplates:

    Similar experiences here, including a 9-3 at 140k miles still on the original clutch/turbo and a 2004 9-5 doing fine with 75k miles, even with the original warranty expired.

    Of course, our experiences count for little to others if they’re convinced the brand is totally screwed.

    And yes, the warranty reduction is a stupid move on the GM beancounters’ part.

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