Saab Aims to Move 50,000 9-5 Models Annually
By Kevin Miller
In Frankfurt this week, Saab’s Managing Director Jan Åke Jonsson said the global sales target for the sedan and station wagon versions of the company’s new 9-5 is 40,000 to 50,000 per year, according to Automotive News. While the car looks great and should be very competitive in the market, the Swedish automaker may have a difficult time moving quite that many units.
As we reported last month, Saab’s new owner is inheriting a fractured dealer network in many parts of the world. GM has announced that the Saab dealer network in Canada is being shut down at the end of this year. Dealer numbers in the US and in several European markets have decreased in the last 18 months. With fewer retailers, thereby located farther from some potential customers, it may be difficult to grow sales of the large 9-5 to the point of being able to sell 50,000 annually. Saab’s Jonsson did state that the company plans to develop a new sales network in the US after the separation from GM is complete, which means that initiative will begin sometime in 2010.
Fortunately, the potential for growth into new markets does exist. Following last week’s announcement that China’s Beijing Automotive Industry Holdings Co. (BIAC) has invested in Koenigsegg Group’s purchase of Saab from GM, it is possible that BIAC could serve as an importer or set up a retail network for the Swedish cars in China. GM introduced Saab to the Chinese market five years ago; fewer than 900 Saab vehicles were sold there in 2008.
Koenigsegg Group has stated that they expect Saab to return to profitability in 2012, with a sales volume around 100,000 vehicles. They will need to sell 40-50,000 9-5 models annually to reach that overall sales goal, but in today’s marketplace that number seems more than a bit out of reach. In 2008, Saab sold fewer than 67,000 9-3 and 9-5 vehicles globally.
With the new 9-3x and 9-5, and the upcoming 9-4x, there will finally be new models in Saab’s showrooms. The 9-5 sedan will be on sale in Europe early in 2010, and in the US midyear. It will be followed next Autumn by the 9-4x, with the 9-5 wagon showing up in early 2011. With that being the case, the 50,000 9-5/year target wouldn’t come before the 2011 launch of the wagon, which gives Saab just a year of sales to ramp up to the mythical 100,000 unit break-even point. The calculus of Saab’s return to profitability seems a bit optimistic if it is really relying on such strong annual sales- though the company would already be shuttered if they weren’t optimistic about their future. Time will tell if they are able to achieve those sales numbers and return to profitability.
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