Saab: 'Bright Future' and Breakeven by 2012
July 27, 2010
By Bill Visnic
At a press event Tuesday in New York, executives for Saab Automobile AB said they have realistic expectations for the rejuvenated company now owned by the Netherlands' Spyker Cars NV and are confident the company can reach breakeven sales volumes by 2012 when its crucial replacement for the Saab 9-3 sedan hits the market.
Jan Ake Jonsson, president and CEO, Saab Automobile AB, said that Saab assumed full responsibility for global sales and marketing from former Saab owner General Motors Co. on July 1. Now the company's primary job is to "rebuild confidence in the marketplace" for the Saab brand. He said the best way for Saab to do that is to deliver on its business plan, one that includes ramping up production and sales to a global level of 120,000 to 125,000 annually.
Jonsson said, however, that Saab's breakeven point is around 85,000 sales. The company expects to hit that mark when the all-new 9-3 launches in 2012 and presumably sales will accelerate from there towards Saab's global target. He added that the new company expects the U.S. to remain Saab's largest single market, accounting for 20 to 25 percent of global sales.
New-Product Timeline Set, But Compact Saab Isn't - Yet
Knowing it needs to fill its showrooms to demonstrate its revitalization, Saab has a definitive new-product rollout that is critical to support life-sustaining production volumes. Most of the new-product details have been discussed before, but Jonsson did add new illumination on the matter of developing a compact Saab, a car positioned below the current entry-level 9-3 meant to be a new-age successor to the lauded Saab 92.
Calling a future 9-2 model "the missing link in our product portfolio," Victor Muller, CEO Spyker Cars NV and chairman of Saab Automobile AB admitted a 9-2 "currently is not in our business plan."
Jonsson said, however, Saab is looking for partners to develop the car and seemed to give all indication the company considers its development vital to its future competitiveness in the premium market, which he said is expected to account for 8 million sales by 2020.
Apart from the still up-in-the-air 9-2, Saab's new-product near-term future looks like this:
-- The GM-developed and -built 9-4X crossover (cousin to the Cadillac SRX) goes on sale next April.
-- A wagon variant of the new 9-5 comes in July next year.
-- 2012 marks the launch of the all-new 9-3.
-- Saab also is going to produce a 100-car test fleet of all-electric vehicles based on the current 9-3 with Boston Power as a partner.
-- All Saabs will feature turbocharged engines, Jonsson asserted, saying turbocharged engines are a Saab hallmark as well as a key technology to assure the fuel efficiency and emissions reductions the future demands.
Production Rolling, So Is Funding
Saab's assembly lines in Trollhatten, Sweden, are humming again after a four-month-long shutdown while Saab was in receivership and waiting for a buyer. The company has taken three draws of about $190 million each from the funding provided by the European Investment Bank and now is under full production at Trollhatten, which Jonsson said will be the production site for all Saabs going forward. That's with the exception of the 9-4X, which is built in Mexico under contract with GM.
The Trollhattan plant currently is making about 250 cars per day as Saab refills its pipelines and the new 9-5 is on its way to U.S. showrooms and should be available in just a few weeks.
Saab has a deal for retail financing with Ally Financial (formerly GMAC) and is looking to current and former Saab owners as the prime candidates to begin buying Saabs - particularly the new 9-5 - again. Jonsson said Saab is counting on its extremely loyal and well-educated former owners to step up - but just to be sure, there is a "loyalty bonus" for new buyers, although Saab's executives did not provide details of the spiff.
Photo by Saab
Saab President and CEO Jan Ake Jonsson gave signs of things to come for the automaker under new ownership.
Bill Visnic is senior editor of Edmunds' AutoObserver.com
Posted by Michelle Krebs at 7:44 AM under Companies | Comments (3) | digg this | Seed Newsvine
Tne new owners of SAAB understand their brand and are making good moves toward re-building it. By keeping volume expectations in check, they create the opportunity for a profitable niche brand.
http://wp.me/pGyRI-gq
Cameron McNaughton
McNaughton Automotive Perspectives
http://autoperspectives.com
Posted by: mcnaughton | July 27, 2010 at 10:03 AM
SAAB will fail because they price new models too high. Same car as Buick Regal (Opel Insignia) costs almost twice. Common, rich people are not interested in SAAB and intelelegensia do not have money to afford SAAB. How about nice Subaru instead for much less (or Ford Mondeo for that matter with ecoboost). SAAB will not survive also because of overproduction problem in Europe.
Posted by: savetheland | July 27, 2010 at 1:57 PM
Annual US sales projections work out to a low of around 20,000 units to a high about 31,000 (plus 20 or so Spykers). Put another way, roughly 100-125 units a selling day sold nationally. For the first half of this decade at least, Saabs are still going to be "GM-ish"; whether that hurts or helps remains to be seen.
But for this Saab "entusiasten" i'll keep my '00 Focus until the 9-2 rolls out, ya hey.
Posted by: fulcrumb | July 27, 2010 at 6:57 PM