How GM Can, and Should, Save Saab

I recently penned a post discussing General Motors' (GM) failed strategy of trying to sell eight versions of the same car, instead of focusing on building ONE great car and producing maybe two variants at most. I attributed the problem to one of brand mismanagement, and promised to discuss the marketing and branding issue in more detail at a later date. Here is the first in a series of articles on the subject, a discussion around what is arguably GM’s greatest crime of “brand murder”: the destruction of Saab.

When I was a kid there was a great Saab commercial showing a Saab owner driving at illegal speeds along twisty back roads, while a Rolls Royce owner is being driven serenely along the same roads whilst reading the paper and drinking tea. The images cut back and forth and eventually the Saab owner (stuck behind and annoyed with the slow moving Rolls Royce) passes the Rolls Royce and leaves him in the dust. The commercial ends with the tagline: “People who buy a Rolls Royce pay other people to drive for them; people who drive Saabs let no one do the driving but themselves!”

If I remember correctly (I was barely ten at the time) this commercial came out around 1985/1986, back when the Saab brand was stronger and the company was considered a producer of premium, safe, quirky and sporty cars. They were never in the same league as Mercedes or BMW, but they were still premium automobiles that were well respected and had a strong following.

Fast forward to 2008 and Saab only holds a glimmer of its former glory. You could even argue that the use of Opel platforms and the GM parts bin makes them some sort of bastardized version of a true Saab. Perhaps the most glaring example is the Saab SUV: a rebadged GM Envoy with a Saab nameplate and the trademark ignition on the floor console.

Aside from the automotive-Frankenstein quasi Saabs GM is pushing on the marketplace, the real problem with Saab is that the cars simply don’t stand up to the competition. Why would you pay $36k for a Saab 9-3 when you can get a car with similar appointments and performance capabilities (if not greater) from Honda (HMC) or Nissan (NSANY) for much less, or get higher performing, more luxurious cars from Audi, BMW or Lexus for about the same price? Unless you’re in love with Saab’s styling, the floor ignition or the nighttime driving lights, it makes little sense to choose Saab over the competition.

So what’s the solution for Saab?

Put the cars from other Luxury Sport Sedan manufacturers firmly in their sights, and actually build a car that a potential BMW, Audi or Infiniti buyer practically has to try before making a final decision. Some potential ideas:

1. Actually build a bloody Saab. Stop rebadging subpar cars from other GM divisions. American car buyers don’t want to pay $35k for a rebadged Opel/Generic GM Sedan with a few Saab touches.
2. If you want to be a legitimate competitor in the luxury sports sedan arena, your cars have to be either all wheel drive or rear wheel drive. Until rear wheel drive and/or all wheel drive variants of the Saab 9-3 are produced, it’s not going to be a viable competitor against the heavyweights in that market segment.
3. More power: Lexus and Infiniti were able to shake-up the Sports Sedan world by starting a horsepower race, Saab should join the club and push the power output of the Aero version of the 9-3 to at least 300 HP. They should also create a “motorsport/tuner” version of the 9-3 (i.e. bring back the Viggen) with a power output in excess of 400 HP, as a ultra-high performance 9-3 could be a cachet model that could help breathe life back into the Saab brand. Furthermore if a super-powered Viggen is brought back in rear wheel or all wheel drive form, it won’t have the torque steer that plagued the last version and dampened its high-performance credentials.

Can Saab be saved? Sure, if Audi can come back from being nearly dead to being a viable competitor for BMW and Mercedes. With the A4 outselling the Mercedes C-Series, Saab can be revived too. However the key to reviving Saab (as it was with Audi) is a great product. A company that claims their cars are “descended from Jets” should build performance automobiles that keep that promise, as opposed to seeming more like they’re descended from rebadged pedestrian Opels.

GM has demonstrated the engineering prowess to breathe life back into Saab products in the form of the new Corvette and the Cadillac’s “V-Series” variants. The issue is whether or not they’ll use those resources to build a proper Saab. The real problem isn’t so much engineering, as how the Saab brand is being murdered… err mismanaged. GM needs to get in touch with the mindset of the luxury sports sedan customer and build a product the market actually wants.

The demise of Saab is one of the most glaring examples of brand mismanagement in recent business history, as it doesn’t take a genius to figure out what Saab needs to do in order to thrive again. All GM has to do is look at what is making Audi, BMW and Lexus successful and replicate it. That’s the really sad part: this isn’t a case of a company having a difficult and unique business problem to solve. It’s a case of a company simply ignoring a winning formula that is already being used by its competitors.

The kid who used to see that Saab commercial really wanted to buy one when he grew up. Now he can afford one and spends his money on Saab’s Bavarian competitors instead. Based on the videos posted on YouTube of old Saab commercials, and the fan sites, etc, I’m not the only one who wants the old Saab back and is driving a competitor’s product in the meantime. It’s a sad state of affairs when a quick YouTube search reveals several fold more posted commercials for a brand’s old products, than their new ones. It’s a decent proxy for where consumer interest lies.

For more on Saab, here is a link to a Motor Trend article discussing the history of the automaker over the years.

Disclosure: At the time of publishing the author didn’t own a position in any of the car manufacturers mentioned in this article. He would however be first in line to purchase an all wheel drive 400 HP Saab 9-3 Viggen if GM were to follow his advice. C’mon GM just do it; how many times does a management consultant (of all people) provide you with free business advice and offer to give YOU money?!

Comments

[Jeff B.]

I agree completely. Gm's attempt to foist that Gawd-awful re-badged Envoy shows just how stupid they think their customers really are.

[Buz Sawyer,LtCol]

Me thinks the GM exec's are too busy counting their bonus money to worry about making a better product. As long as the company makes enough money to fund their outlandish bonus each year they need not concern themselves with shareholder needs. The bonus boys controll the vote.

[Greg S.]

I'm not exactly in love with the direction Saab has gone in recent years under the stewardship of GM, but to convert all future Saabs to rear wheel drive just so they can be more like "BMW, Lexus, etc" would be sacrilege to Saab purists. Saabs have always been front wheel drive - and it was one of their strong points in the harsh Swedish climate compared to Volvos, which were rear-wheel-drive. Fast forward, and now Volvos are FWD or AWD! Funny how things change. I agree what GM needs to do is bring back the "individualness&q... of Saabs - give them something to differentiate them from the myriad of boring sedans that you can hardly tell apart. At least Ford has given Volvos some unique styling features and classy interiors, and maintained the safety image. In the Ford/Volvo case, shared platforms has not been detrimental to the brand. It can be done!

[Markham]

Understood, but an AWD Saab would have an even more capable platform for the harsh Swedish winters. Furthermore, I think cars have to change with the times: Lexus began producing RWD cars to compete with the Germans and BMW was forced (by Audi IMO) to product AWD cars and abandon their "Good drivers only need RWD to drive in bad weather" sales pitch.

Saab has to change in order to survive and remain relevant.

I see your point as a purist, but isn't a RWD car that is a Saab in every other way, better than turning Saab into the Swedish version of Vauxhall?

-M