Saab May Be GM's Best Hope for the Future

Bloomberg (“GM Said to Study Shedding Saturn, Saab, Pontiac to Win U.S. Aid”) is reporting that Pontiac’s sales peaked in 1978 and are down 21% this year compared to an industry wide 15% decline. Saturn’s sales peaked in 1994 and are down 19% this year, while Saab sales peaked in 2003 at roughly 48K units and declined 31% this year. Pontiac offers little differentiation from other General Motors (GM) models, with the exception of some unsuccessful rebadged older (GM Australia) models. Likewise, Saturn offers a “plastic coated” version of the Chevy Malibu and a rebadged Vauxhall (GM Germany). No value added for either Pontiac or Saturn. For that matter Buick could be a China only product with nothing lost here in the States.

That leaves Saab. The accountants might conclude that it is a dying brand by its eroding sales and only 105 dealers. But Saab spells the automotive future, high quality small and midsized cars. Saab cars are nicely sculpted, or at least uniquely shaped. They have smaller engines with good handling and performance. Even though they share GM platforms, they retained differentiation. Saab is the perfect complement to Cadillac and should be built up rather than destroyed. And by the way, kill that ridiculous Saab SUV. Saab could be believable as a European sports sedan, Buick will never be.

Lexus became successful by being a better luxo-barge than Buick and Cadillac. Cadillac revived itself by becoming German-like. Yet it retained its bouncy DTS for its loyal herd of seniors. Saab is not dragged down by legacy seniors. Now Buick is being redirected to compete back at Lexus. Trouble is Lexus is so yesterday.

GM did show passion in recent years with the Cadillac CTS line. Now it’s time to show the same passion with Saab. Copying Lexus will get them nowhere.

No disclosures.

Comments

[sr9web:]

GM is going to sell SAAB. That pie is to small to cut any slices out of it. there's nothing there to feed on. No sales, no profit, no growth.

2008 Nov 27 06:33 PM

[brianoh:]

Very interesting that GM et al had no business plan for recovery. Trouble is, we live in changing times – “which way is the consumer heading?”. They run the risk of ditching the old model based on “yank tanks”, only to see it revived again. The structural problems are so great that it almost looks worthwhile to go chapter 7 and disappear. The old business model is unworkable in the present market – hourly rates, pensions, healthcare, products. On the other hand, the politicians will not want to see these status symbols of capitalism prove to be a failed concept. How these problems came to be is difficult to comprehend. However, the US (Treasury, Congress, Fed Reserve) appear to have abandoned conservative economic management and simply rely on the fact that the USD is the reserve currency. Productivity has been replaced by asset-inflation. Now that that has proven to have failed, they now pursue it again to attempt to prop up prices. This begs the question of: “who benefits from these policies?”

2008 Nov 27 07:28 PM

[Eddie Brown:]

I think all three car companies should merge.. to one company.
Build a truck and a car. Maybe a van for multipasengers.
Keep it low cost and dependable. Also get great gas mileage.
Just a thought.
Eddie in Silverlake, CA

2008 Nov 27 09:43 PM

[Eddie Brown:]

Oh yes... and stop changing the models every year.
Keep the same model for 5 years to recoup the cost of developement and production.
Eddie In Silverlake, CA

2008 Nov 27 09:45 PM

[raising4dau...:]

GM needs to cut brands and dealerships, big-time. Do Americans really need 2-4 different versions of every GM vehicle? Do Americans really need 10 GM dealers within a 10-mile radius?

2008 Nov 27 09:46 PM

[SKR, MBA:]

As a SAAB owner for 30 years, and an American living in Europe for 17 years, I wish GM would peel off the company. I own the last pre-GM model of SAAB, and since GM took over, the SAAB as a truly unique car has become a moribund American hack, like all of the other American hack automobiles.

Anybody want to know why the sales of SAAB have slipped? Just look at what GM has done to the once graceful lines and high performance. They've turned it into just another hideously-styled American box on wheels, with slushy under-performance and low quality finish. They've taken an industry benchmark and turned it into an also-ran.

I feel that the bailout for the big three should be abandoned. For decades, Detroit has churned out slop that no one wants to buy. Why should they be rewarded for their arrogance in believing that with big bucks thrown at marketing, they can sell sh*t to those who don't know the difference between that and Shinola?

Give us back our SAAB!

2008 Nov 28 07:50 AM

[Paul Killinger:]

If I had to bet, I would say the unions still have enough clout within the Democratic party to get them to do something for Detroit. So they will get some version of their so-called bridge loan.

The question is what happens then? Fresh cash is most likely only going to delay their day of reckoning. Those same unions (and management) make it virtually impossible for Detroit to innovate its way out of its present financial stupor.

It took more than 30 years of global competition, government mandates and over-regulation to get the domestic auto industry to where they now find themselves. There are no redos in the cards and no reversing the clock.

Only the freedom that comes with invoking bankruptcy can possibly save them. And that's the last thing any of their sponsors want. As one of the commentators on CNBC recently opined, Washington is populated by two groups, wolves and fools. Neither can save them now.

2008 Nov 28 09:27 AM

[john s. gordon:]

pontiac peaked (interest-wise) in 1978 before john delorean left. having imagination he was a misfit @ GM.
> jack

2008 Nov 28 09:28 AM

[leh:]

The title of this absurd piece says it all re the kind of position GM has put itself in. Wagoner and co should be hung by their toes and dangled over fire and brimstone. There's nothing left to save here folks. Auction off the remains to healthier companies and let's move on. See Bob Crandall's op-ed piece in today's WSJ for details.

2008 Nov 28 10:11 AM

[DR.G:]

I would say bankruptcy is the only way to go for GM, then get rid of
Pontiac, Hummer and Saturn and GMC trucks, and start making a world platform. Rebage it for Opel,Vauxhall & Holden.

Send Wagner and his crew walking with there coats and nothing else, they should not get one dime for being asked to leave.

The union guys will then learn what it is like for the rest of American workers to pay for retirement, healthcare 401k, oh and layoffs with 30 days notices. it sickens me to see them get full pay when a plant is closed down or their stupid work / job rules.

You have done what US Steel workers did !! your dug your own graves now its time to lie in it.

2008 Nov 28 04:17 PM

[UH2L:]

I am a long-time Saab fan, but unfortunately, most people never caught on to how far ahead of the curve Saabs have been. People didn't want, (and still don't) want a FWD 4 cylinder turbo entry luxury car that gets 30 mpg with 60-70 cubic ft of cargo volume, (my 9-3 wagon has more cargo volume than a Ford Edge and a Mazda CX-7. I also average 28+ mpg with half city miles. Saabs have always been the true AntiSUV. They are light, safe, efficient, and sharp looking. It's always funny how people criticized them before for being quirky. That was supposedly why they never sold in higher volumes, then when GM tried to make them more mainstream, then many of those same people criticized them for being too generic.

As for the whole GM and Detroit 3 loan issue, I summarized all my thoughts on an article I wrote on my blog here...

uh2l.blogs.com/things_...

2008 Nov 28 11:42 PM

[33Nick:]

One of my pet peeves. I feel the auto industry consistently shoots itself in the foot. By the time you get used to the way a car looks, they come around next year and "improve" it. The results are that you really never get used to it, and finally you lose a loyal brand recognition. Look at Alfa Romeo's spider that was build for over 30 years. How iconic is it? It only received a mild face life every ten years.

Maybe that's why so many of us buy and restore old cars...


On Nov 27 09:45 PM Eddie Brown wrote:

> Oh yes... and stop changing the models every year.
> Keep the same model for 5 years to recoup the cost of developement
> and production.
> Eddie In Silverlake, CA

2008 Nov 29 02:08 PM

[john s. gordon:]

the best saab was the 9000 with 3-litre v6 engine. co-development with lancia & alfa romeo made this engine possible. unfortunately they couldn't sell enough of them ....
> jack

2008 Nov 29 05:00 PM

[dzzkfn56:]

To SKR, MBA....we'll be happy give you back SAAB before GM bought it...a bankrupt, downward spiraling, poor quality manufacturer...go ahead look at the historical quality figures on SAAB,,,GM saved the company..it didn't destroy it.

2008 Nov 30 07:51 AM

[popski:]

I think GM should ditch hummer, pontiac, saturn and keep buick for china. Its main brand should be chevy which would compete with toyota, honda etc. and its upscale brand should be cadillac. (aimed at BMW, benz, lexus). I agree that saab could be successful for GM but something needs to be changed to make that brand profitable. the 9-5 has been around since 2000 and desperately needs an update. Instead of rebadging trail blazers into saab suvs they should be investing in their core products that actually stand out from other GM products.

2008 Nov 30 11:56 AM

[Fastlane12:]

I have the limited edition 9-3 TurboX SportCombi - 280 HP turbo V6 with AWD, lowered & on high performance Pirelli skins... no slush here. Made in Sweden. My wife has a 9-3 2.0T sedan, no slush there, either. Both outstanding quality of fit and finish. Nary a problem. Not sure but maybe you've not been to a SAAB dealer in a while. Speak not of what ye know not of.


On Nov 28 07:50 AM SKR, MBA wrote:

> As a SAAB owner for 30 years, and an American living in Europe for
> 17 years, I wish GM would peel off the company. I own the last pre-GM
> model of SAAB, and since GM took over, the SAAB as a truly unique
> car has become a moribund American hack, like all of the other American
> hack automobiles.
>
> Anybody want to know why the sales of SAAB have slipped? Just look
> at what GM has done to the once graceful lines and high performance.
> They've turned it into just another hideously-styled American box
> on wheels, with slushy under-performance and low quality finish.
> They've taken an industry benchmark and turned it into an also-ran.
>
>
> I feel that the bailout for the big three should be abandoned. For
> decades, Detroit has churned out slop that no one wants to buy. Why
> should they be rewarded for their arrogance in believing that with
> big bucks thrown at marketing, they can sell sh*t to those who don't
> know the difference between that and Shinola?
>
> Give us back our SAAB!

2008 Nov 30 08:33 PM

[Fastlane12:]

Mr. Steinberg,

Please do your research better. The Pontiac G8 is indeed from Australia but it is not "a rebadged older Australian model" - instead it is a version of GM's new Global RWD platform, designed from the beginning to be a world vehicle. It is the basis for the new Chevy Camaro, too. All the magazines have praised the G8, have you ever been in one?

Next, you refer to the Saturn Aura as "a plastic coated Malibu." Wrong again. Body of the Aura is all metal. Ever been in an Aura? Didn't think so...

Finally, your reference to the Saturn Astra as "rebadged Vauxhall" further underscores your inability to research detail. The German division of GM is, of course, Opel. The Opel Astra is widely acclaimed as a top performer in all its European markets and true enough, it is sold in the UK under the home market brand of Vauxhall. By this time I am pretty sure you haven't been in one of those, in any country, either.

Critique without fact is unprofessional and wrong. Shame on you.

2008 Nov 30 08:51 PM

[sumosama:]

in the words of Jim Rome...War Saab! One of the few "American" vehicles I have owned in recent years. Loved my turbo convertible 9-3 with 30 mpg. Looking forward to either the 9-3 sport combi or the 9-5 sedan for my next car.

Sadly, you can still go to dealerships and buy a 3 year old brand new car. Sad commentary on the advertising. Still a loyal following.

2008 Dec 01 03:54 PM

[saabluver:]

I could not agree more with this post! We have owned Saabs since we married 26 years ago. There is a big difference in quality since the involvement with GM. Saabs have always been unique if not a bit quirky. They are a wonderful "northern tier" car, great in winter conditions and have always had great performance and features included. GM has done it's best to Americanize Saab. Previously included features are now options. Base prices, though corrected recently, are still high for this mid sized sedan. The quality has diminished as well as the service at the GM dealers. Saab dealers always knew their product inside and out. Now I cringe whenever I have to take our Saab in for service as I know the mechanics are not as good as they once were. I'd be elated if GM sold it's interest in Saab. I could care less if all three American car companies folded for good. They make nothing but garbage and their time is over.


On Nov 28 07:50 AM SKR, MBA wrote:

> As a SAAB owner for 30 years, and an American living in Europe for
> 17 years, I wish GM would peel off the company. I own the last pre-GM
> model of SAAB, and since GM took over, the SAAB as a truly unique
> car has become a moribund American hack, like all of the other American
> hack automobiles.
>
> Anybody want to know why the sales of SAAB have slipped? Just look
> at what GM has done to the once graceful lines and high performance.
> They've turned it into just another hideously-styled American box
> on wheels, with slushy under-performance and low quality finish.
> They've taken an industry benchmark and turned it into an also-ran.
>
>
> I feel that the bailout for the big three should be abandoned. For
> decades, Detroit has churned out slop that no one wants to buy. Why
> should they be rewarded for their arrogance in believing that with
> big bucks thrown at marketing, they can sell sh*t to those who don't
> know the difference between that and Shinola?
>
> Give us back our SAAB!

Feb 16 11:58 AM