We're on the cusp...... so here's a little official and non-official info to start the week.
The deal
The word out of Sweden is that Koenigsegg Group and Saab are all ready to go. Everything is prepared for immediate startup once they get the nod. What we're waiting for now is approval from Europe with regards to the ruling on state aid, and then the final EIB loan guarantees from the Swedish government. Every indication so far is that the government will give their support, so it's just the EU we're waiting for now.
A whisper has come through from elsewhere in Europe hinting at December 1 or 2 as a possible date for the EU approval. I have nothing to substantiate this, but Saab Cars North America using November 30 as a deadline for cancelled dealerships indicates that maybe my source has heard the same things they have.
Beijing Automotive
Part of that deal coming off is Beijing being included and one of the obstacles to that is GM being OK with their inclusion. Sure, GM may be dealing with Koenigsegg and not Beijing directly, but you can bet your bottom dollar they'd find a way to shimmy out of things if they felt too much tech was flowing somewhere they didn't want it to go.
Indications from Sweden are that that side of the deal is all stitched up, too, with clear limitations as to what can be used by BAIC in the future.
The plans to remanufacture previous Saab models look like going ahead, with the outgoing Saab 9-5 and the pre-2006 Saab 9-3 (no, that's not a typo) both being candidates for manufacture there. The level of modification or re-design that would take place is not known.
The dealerships
This has been the big issue of the last week in the US and will possibly continue to be prominent in the next week or two. Losing one third of your major market dealer population is no easy proposition and whilst a handful of those dealers will shrug it off, there are a number of very sad dealers and customers in various parts of the US right now.
It's my understanding that appeals will be considered early this week, so we may hear some good news by the weekend.
It's also come through to me that the total number of remaining outlets - given at 137 at this point - could comprise both dealerships as well as service-only outlets.
There was news in the Canadian market last week, too, which is encouraging. I'm expecting some news about the Australian situation in the next week or two. It'll be very interesting to see what happens here in Oz, as the impression I get is that many Holden dealers that received Saab took it on because they were told to, not necessarily because they wanted to. It's not the case everywhere, but let's just say It'll be interesting to see where Saabs are sold here in my little home city in six months from now. That goes for a few others, too.
The cars - 9-5
The date I keep hearing about in terms of widespread availability is April 2010. I've heard dribblings of information about earlier dates for some European markets, but April is the one that keeps popping up in relation to the US. We here in the antipodes will probably have a month or so longer than that to wait.
The cars - 9-3
Production will likely gear up as soon as the deal is done so that they can start pumping out 2010 models and get them to markets around the world. Dealers need these like they need air to breathe.
Several people have indicated that Saab are going to cease the incentive offers which might be likely for 2010 models onwards, but I have a hard time seeing them clear 2009 model 9-3s without big deals.
(btw......I think the whole no-incentives thing is good, but it makes me wonder about combined GM dealerships, which will likely be offering incentives on their Caddys, etc, on a rolling basis)
There's even been unconfirmed indications that prices will go up, which I hope means that they're going to jack up the equipment levels in the 9-3, in line with the premium segment they're aspiring to. Hirsch leather interior as standard, anyone? I wish.
The cars - 9-4x
Whispers have come through on the wires that Saab's diesel problems will likely mean a US-only launch of the 9-4x at first. The European market needs a diesel and whilst Saab are probably chasing one down as we speak, there's no quick fix when it comes down to matching it with a pre-existing vehicle.
Will it premiere at a US auto show in the coming season? That's the other big question.
The cars - a new Saab 9-3
Spies whisper that work is coming along nicely on the car, which has now progressed so far that it's earned its own internal nickname. I won't spill the beans on what it is, but interestingly, there's a similarly named project that involves windfarms, which should make Maud happy.
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You are now up to date.
My guess is that we will start to see limited supplies as early as med January if the deal is closed within the next 14 days.
N. AMERICA: GM's official support of SAAB rescinds as of Dec. 31 2009, so I'm certain there'll be several "plugs" pulled a range of current resources made available to dealers. Although standard mechanical servicing and parts pipelines are supposed to remain for many years to come.
I still plan to test drive a Volvo when the 9-4x is released in Oz, because I'm pretty sure it won't be. Just my gut instinct.
BTW if you want some T-shirts in Oz, try:
http://shop.cafepress.com.au/saab
Service will be an issue for me. It will be hard to be premium anything if the service is lousy.
concerning the diesel engines, why cant they keep using the Fiat Powertrain as they currently do also for the 9-4?
In any case, are they looking at VM Motori? They make top diesels.
(btw......I think the whole no-incentives thing is good, but it makes me wonder about combined GM dealerships, which will likely be offering incentives on their Caddys, etc, on a rolling basis)
There's even been unconfirmed indications that prices will go up, which I hope means that they're going to jack up the equipment levels in the 9-3, in line with the premium segment they're aspiring to"
Jacking up prices and no incentives in a time where Saab is already hurting and is a name barely mentioned among some "premium" buyers.... IMHO is a disaster.
Saab has a long hill to climb to establish thier rightful place with BMW, Lexus, Mercedes, Audi Volvo... I am not saying they can't do it or that thier cars are not as good, but the perception in the US for quality / performance is lacking.
We who know a little bit about Saab ( Thanks to swades work) look at things differently... I just feel for a few years, until Saab is really back in its feet that some discounts will need to be offered to get the product on the market to SEEN and KNOWN, and once again, trusted.
Hell, I am sure most of the basic run-of-the-mill car buying people who only hear snippet of the news think Saab is already done for and would be shocked to see a commercial for the 2010 9-5.
I know I may sound like a downer to all of this Koenigsegg deal.... I just do not like what i am seeing so far with the talk of dealers closing, jacking up prices... just not a good way to get product on the road, where it needs to be seen.
On the subject of the pre-2006 9-3 in China, it's all about Chinese eyes when it comes to styling and in my opinion that generation of 9-3 has the most "universal" styling of the choices. Additionally, perhaps Saab wasn't willing to allow the newer generation cars to be made in China just yet.
It'll be interesting to see what equipment they will include for the Chinese market.
Selling at loss is a disaster, there's no daddy-GM anymore to fund that concept. If that means limited USA sales then thats the way it is.
I am not saying incentives used as a total loss... but you need something to bring customers to the lots until things get strong again.
Is this
http://www.vmmotori.it/en/01/00/01/dettaglio.jsp?id=9
the engine that was supposed to into the 9-5 and 9-4X?
If so, isn´t there a possibility for the new SAAB-KG to purchase this egine from VM Motori directly?
I guess that most of the engineering already has been done.
Please put SID where it belongs as it was always in the drivers field of view. Thankfully the only issue I have had is a few peeling buttons which was covered by a Service Bulletin but my dealer doesnt want to know. Having said that I can buy the buttons online and save $$$.
Back on topic, I am getting a little giddy at the prospect of this whole deal going thru but one thing sticks in my head thats been there since K-G started this whole process. Where are the billions of dollars coming from to invest in new product? Have I missed something?
Raising prices will not work, mark them down to start at $25K and you can bet more people will come into the flock. Saab needs to stop chasing BMW et al and concentrate on 'finding its own road' competing with VW whose products are about as exciting as Honda's.
I expect them to use a cast iron engine instead of the all aluminum I-4 found in the 9-3. Furthermore I expect them to use other dampers than Sachs, other wheel hubs than SKF/FAG etc. It will be a good test to see how the quality of the Chinese parts hold up compared to the European parts.
I have no problem raising the sales price $10,000 per car. The problem will be resale value. I can't pay $50,000 and drive 100 miles, then have the value of the car be $15,000.
There are no SUVs in Lubbock, Texas that I give an inch of space. I drive big. And, when the BMWs see my 2008 laser red 9-3 coming, they know they are not special. No one else in town has the same car. Can't say that for their BMWs. I do however get a lot of attention from the Texas Highway Patrol. Must be the fact that they know my red Saab can go 130 mph when they aren't looking. My Saab is just fine the way it is for me. I don't want those other cars.
Call it attitude, Swade.
Incentives will sell a few more cars in the short term but it will hurt both the manufacturer and the customer in the long run. The manufacturer and the dealer will earn less per car and the customer will see the second hand value of the car decrease. The cost of a car for a customer is not determined by the price tag but mainly the price difference between the price of the new car and it's second hand value. If the second hand value is low a car can be very expensive to own even if it's cheap to buy.
Extra equipment is generally cheap for the manufacturer, so if it's difficult for the customers to justify the price, offer better and higher quality equipment for the base price. As a customer it's generally better to spend money on a car with a higher base price rather than extra equipment as the extra equipment usually suffer from a far worse second hand value than the car itself.
Another possibility is to offer free service the first years. That way all new cars will also be serviced at an authorized dealer/service station.
Competing with VW is not possible due to their volume advantage.
... or so says a couple Swedish-to-English translators I found with Bing ...
In the premium business it is even worse as premium mixes poorly with cheap. My preference is getting more money for my old car when I trade it in. It also has the positive effect of helping used car prices on privately sold cars. In Saab's case residual values and resell prices have been "problematic" for years if not decades. Everybody knows that it is easier to sell to old customers than new but focus has always been on getting the new ones, maybe because brand faithfuls are being taken for granted.
So new Saab spend more on advertising and appealing suliminally to the customers and help them trade their old one for a new.
I guess what I think is helpful is the perception of getting that "great deal" that some people enjoy when buying a car...
I like BMW's no cost mantenance for 4 years 50k. I know its factored into the cost... but a good perceived perk.
Saabs advertising.... only thing I have heard in a year was on XM radio and that lasted a few weeks touting the 9-3.
Yesterday I drove my Chevy Silverado Z71 into work, so I might have been cranky... today was the Combi... much happier.
No matter how I bash Saabs decisions, I dont think I could ever not own one now that i have enjoyed 9-3 Combi Aero.
I agrre with you on the BMW offer, that is the kind of offer that makes sense to Saab drivers too. Cash incentives might work for increasing end of month sales in the lower segments, but I don't think they are as appealing to premium customers.
The research I read maintained that Advertising works and keeps selling cars months after the campaigns have run out. Cash incentives only lasts until the end of the offer.
The risk is that the car industry will self-destruct under the continuing pressure of higher cash incentives and the call for faster product cycles. Soon customers, accustomed from mobilephone and computer industries, will longer look at a product that is older than three years. How are you going to pay for the development if you stick all your resources into flogging last years model?
No magic, no tricks
Ok, so to find a happy middle road... Me and you as marketing people for Saab would offer.. lets say we like easy numbers and offer
5 years 50k free scheduled maint.
This costs little for Saab overall but adds to the perceived lower cost of ownership for the buyer. Its then up to the dealer how much haggle room there is off the MSRP. I would think this would help keep the value up on a car as it would be perceived that the car was well maintained since it was all "free".
End of year cash incentives used sparingly
Lets face it, some people premium or not, may hold off looking for a new car until after the holidays. Oct-Jan sales are slow... Incentives to move left over model year cars would free up cash for the dealers. I am not saying discount them till its a net loss, but knock some off the MSRP
OR
add another year to the service plan, make it 6 year 60k. Thats a heavy warranty and free scheduled maintenance, but for those who hate car maintenance, would be a wonderful perk. If Saab stands by the product, customers will come back. Doesn't Kia offer a 6 year 60k?
I for one love the security of a extended warranty, just to avoid the sudden out of pocket costs when still paying on a car. (GM's 3yr 36k warranty sucks in this day and age)
The CPO warranty was a big factor in me buying our first Saab.
We'd also push SAFETY.... show those cars all banged up and the occupant walked away.. BMW's commerical hit home with the smashed SUV / woman holding child theme... Saab needed that one.
Ok, so to find a happy middle road... Me and you as marketing people for Saab would offer.. lets say we like easy numbers and offer
5 years 50k free scheduled maint.
This costs little for Saab overall but adds to the perceived lower cost of ownership for the buyer. Its then up to the dealer how much haggle room there is off the MSRP. I would think this would help keep the value up on a car as it would be perceived that the car was well maintained since it was all "free".
End of year cash incentives used sparingly
Lets face it, some people premium or not, may hold off looking for a new car until after the holidays. Oct-Jan sales are slow... Incentives to move left over model year cars would free up cash for the dealers. I am not saying discount them till its a net loss, but knock some off the MSRP
OR
add another year to the service plan, make it 6 year 60k. Thats a heavy warranty and free scheduled maintenance, but for those who hate car maintenance, would be a wonderful perk. If Saab stands by the product, customers will come back. Doesn't Kia offer a 6 year 60k?
I for one love the security of a extended warranty, just to avoid the sudden out of pocket costs when still paying on a car. (GM's 3yr 36k warranty sucks in this day and age)
The CPO warranty was a big factor in me buying our first Saab.
We'd also push SAFETY.... show those cars all banged up and the occupant walked away.. BMW's commerical hit home with the smashed SUV / woman holding child theme... Saab needed that one.