Saab’s New Plan for Profitability

The company plans to do more with less.

By Brendan Moore

06.29.2007

Saab says it has figured out a way to be profitable by 2010, and oddly enough, the linchpin of the plan is to sell fewer vehicles than their previous sales goals.

Saab sold 133,167 vehicles worldwide last year, an all-time record for the Swedish automaker. But it wasn’t enough to make a profit, and the results in the U.S. market were very disappointing once again, as they have been for many years. Saab held its 60th anniversary on June 10, but the last decade has seen the Swedish company endure considerable losses in the American market, one of their largest and most important.

Back in 2000, Saab set a goal of 250,000 units within the decade, and said that was the number they needed to be at from a financial and strategic perspective. Now Saab is saying that, upon reflection (and the departure of Peter Augustsson, the CEO that set the goal), their ideal sales number is actually somewhere between 160,000 and 170,000, which is, of course, a considerable drop from the original goal. Saab officials are confident that the combination of lower production costs, more sharing across the General Motors lineup, and a good pipeline of future product (both new and revamps of existing models) will do the trick.

Carl-Peter Forster, current president of GM Europe and chairman of Saab, stated that, “You can stretch your ambitions for a premium brand too far. There is a natural limit where you can earn. Therefore, we have much reduced our volume ambitions, to 160,000 to 170,000.” From this statement, you have to assume that Saab has determined that their niche in the global market is exactly that big, and no bigger, and so therefore they intend to wring as much profit as they can out of that many sales, since huge increases in volume are not a reasonable expectation.

From a product perspective, Saab’s schedule looks like this:

Saab 9-1: new, entry-level model (wagon) launches 2010
Saab 9-2: restyled Subaru Impreza, gone for now
Saab 9-3: new generation launches 2011
Saab 9-4X: new, mid-size AWD crossover launches 2009
Saab 9-5: new generation launches 2009
Saab 9-7X: restyled GMC Envoy, gone in 2009

Additionally, company officials state that the future excellent “X” all-wheel-drive system supplied by Haldex, a Swedish company, will be offered as an option on every Saab model introduced going forward.

COPYRIGHT Autosavant.net – All Rights Reserved

Author: Brendan Moore

Brendan Moore is a Principal Consultant with Cedar Point Consulting , a management consulting practice based in the Washington, DC area. He also manages Autosavant Consulting, a separate practice within Cedar Point Consulting. where he advises businesses connected to the auto industry. Cedar Point Consulting can be found at http://www.cedarpointconsulting.com.

Share This Post On

3 Comments

  1. I hope Saab makes a comeback in the U.S. I’ve always liked Saabs, going way back. They’ve always been so different in their approach.

  2. Man, I would LOVE to have even the current 9-3 or 9-5 in AWD! I’d buy one tomorrow.

  3. All wheel drive is the way to go with Saab. They would get a lot of buyers back that have left the fold if they offered their cars in all wheel drive.

Submit a Comment

Your email address will not be published.