Why Saab Doesn't Actually Need To Restart Production

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.