Saab USA dealers get their yes/no letters

| 36 Comments

Saab Cars North America has begun sending out letters to Saab daelers telling them of their fate under the new entity.

81 current Saab dealers will be Saab dealers no more.

Automotive News has the details:

GM said in a letter received by dealers today that Saab's buyer, Swedish exclusive sportscar maker Koenigsegg, selected the surviving stores. Koenigsegg will operate the brand here through a new entity, Saab Cars North America Inc.

The target date to close the sale of Saab is Nov. 30, but it could take until year end, says Mike Colleran, COO of Saab Cars North America in Detroit.

"SCNA did make its selection of (go-forward) dealers based on our business plan and the needs of that plan," Colleran says. "Essentially, we're looking for strong dealers who have good profitability and good throughput."

Location also factored into the decision, he said.

GM sent letters out through Federal Express on Wednesday to rejected dealers, GM spokeswoman Ryndee Carney said. Saab will have 137 U.S. dealers after the sale.

All Saab dealers signed a termination agreement in June when GM entered federal bankruptcy protection, Carney says. The terms of those termination agreements will go into effect for rejected dealerships.

If the deal to sell Saab falls through -- as GM's deal to sell Saturn to Penske Automotive Group did -- GM would close Saab and all the dealerships would be terminated, Carney says.

The surviving dealerships will remain under their current dealer contract with GM until it expires in October 2010, Colleran says. Then they will get new franchise agreements with Saab Cars North America.

OK, so that last sentence is a little confusing. Djup Strupe tells me the letter actually quotes a deal date around the end of November, which makes more sense.

81 dealerships is a lot to lose. When you consider that they're aiming to sell MORE cars, that they'll only have 63% of their previous dealership base (by number, not necessarily by sales or quality) AND that the cars will likely be a bit more expensive, it can only mean one of two things.

  1. The cars are going to be absolute killers, or
  2. We're in a shipload of trouble.

I vote for option one. Here's hoping.



36 Comments

any canadian dealers in the near future??


Sad for the dealers no longer in business, but hopefully good for the once that are kept.

Fewer dealers = more cars sold for the remaining dealers => better profitability and hopefully being able to service the customers better. Have been GMs problem in general. selling the same nr of cars as Toyota but doing so with 3 times the nr of dealers. A good formula for many average dealerships... If you want to go premium everything has to be, so its the right thing and doing it now will be a lot easier than later (and they can always add a dealer in the future if they want to).

A question thou, would like to know how many of these dealers that are having saturn / hummer as their 2nd brands?

Lastly, note that the entity is called "north america". Presume that it will include canada / mexico then?


81 dealerships? Ditto, with my vote, Swade!

There is one thing I don't understand, the rationale and position of being a rejected dealer, a (financially) unprofitable dealer. I feel for them. I really do. I'm in the Washington DC area and the dealerships we currently have are few and far between.

In the future, If I want to be able to afford a new Saab, I have to earn A LOT more money than I'm currently making. I'm already working hard.


+1

They need to sort this out quickly. I reckon a dealer in Vancouver, Kelowna, Calgary, Edmonton, Saskatoon, Regina, Winnipeg, Thunder Bay, Ottawa, Montreal, Quebec City, St John, St Johns, Halifax and three to four dealers in the Toronto-Windsor corridor should do it.

I reckon Canada will probably fall in under Saab Cars North America.


That is certainly a problem moving forward.

Like I said yesterday - Classic Saab in Mentor is winding down and they are happy not to have to deal with the brand anymore, although a lot of that has to deal with their feeling toward GM. They are so unhappy with GM they have also voluntarily closed a Buick/GMC point and turning it into a Kia franchise since Kia "builds cars that sell."

Not good.

Saab has the potential to be like Acura here in the USA - quality cars sold through a QUALITY dealer network. And Acura's have gotten really ugly... :)


Saab might be following a pattern set by Jaguar/Land Rover in the states. They're no longer going for volume, but exclusivity. That's why they have a lot of new or remodeled showrooms, many of them exclusive ones. But the two of them combined sell fewer than 50,000 cars in this country and have fewer than 200 dealers.

The same goes for brands like Smart and Mini, all of which sold more than Saab last year. The new Saab doesn't want to oversupply the market and have to use big price cuts in order to move inventory. That's bad for both them and dealers.

My only concern is that service will be harder to come by. What's kept me from considering a Mini is that the closest place to get service is 70 miles from my home. I pass two Saab dealers on the way. But if Saab sets up satellite service centers (like they had in the '90s) I think customers will be well served.


To judge this properly requires knowing which dealers survived the cut and which dealers didn't. GM played a lot of games with dealerships, and I would imagine a number of Saab dealerships were granted for reasons that made sense for GM but not for Saab as a standalone brand.

I could certainly see the new Saab wanting to pull out of multiple brand dealerships, especially if that "extra" dealer was also attached to a Hummer dealership. There is potentially some dealer overlap in the New England area, too -- I can see the worst performing dealer in a multiple dealer market getting cut.

For Saab to succeed, the dealers need to make money. I'd rather Saab-North America start out lean with profitable dealers than the other way around.


Greg +1.

Let's wait and see.


As aeronaut mentioned, some clarification on the fate of Canada's dealers would be most welcome - for us and the dealers I would imagine. Maybe I'll swing by my dealer this weekend to chat the manager up again. :-)


Is there a way to know other than calling your dealer? Is this list public?


It's not public and I'm not sure it will be. I've heard about 5 so far that are staying through various sources.


Is 1 of those 5 International Saab ? :O


Wonder if the 81 cuts includes Saab of Mission Viejo. It became a Mitsubishi dealer this month.


Heres to hoping my dealership makes the cut. Otherwise its going to be hard for me to buy Saab...


Zippy,

in Toronto right now there is only Budds and Queensway. And the Queensway told me that they would be the only Saab dealer in Toronto after the deal is done. So that means by to Budds (who also sells every other car known to man) and the one down in Burlington. Maybe the London one stays open. Same with the Ottawa dealership, I bet only the one out near Scotia Bank place makes the cut.

Dave


Zippy,

in Toronto right now there is only Budds and Queensway. And the Queensway told me that they would be the only Saab dealer in Toronto after the deal is done. So that means by to Budds (who also sells every other car known to man) and the one down in Burlington. Maybe the London one stays open. Same with the Ottawa dealership, I bet only the one out near Scotia Bank place makes the cut.

Dave


I would suspect the 81 dealer cull is more a kin to weeding the wheat from the chaff. There could well be some very redundant dealerships who stand in the way of progress. The dealership I used to work for still sells SAAB in name sake. However; the core business is all about Jaguar and Landrover.
SAAB doesn't need to be tied up in a Cadillac or Buick dealership where maybe only 2% of cars sold would be SAAB.

The good news is that SAAB:NA will get a very focused dealer network.
SAAB cars North America have a year to find new businesses who wish to employ dedicated sales staff instead of what is likely at present. Of SAAB being a small side-line option in a multi-franchise setup.


Anyone know when the list will be made public?

-Anxious in Anchorage


Is BlueGrass Saab in Kentucky still going to be around? That is a fab delaership.


Oh, I would imagine if our Afghanistan war plans can be "leaked" to the public within weeks, this list should be "leaked" to the web very soon.

WooDZ said it very well as did Greg... but my point is this.

I just hope Koenigsegg does not try to make this brand TOO exclusive...

They still need to offer cars at all three levels... Entry,mid and premium if they want the brand name to become as well known and as wanted as Lexus and BMW.

stress the safety of the car, the quality of its build, the support of the dealers... (and hire Swade as a Public Affairs/Marketing person) and Saab will be ok


Sapan,

If you are referring to International Saab in Falls Church, I (personally) find it unlikely that it will close. This is purely anecdotal, but I think the DC area is a fairly strong market for Saab -- at least in comparison to other areas of the country more hard-hit by the economic woes. I see a lot of Saabs out here on the roads daily.

Of course, this is just a guess.

But I suspect International and VOB Saab in Rockville will both survive. I think a Fitzgerald franchise somewhere (Frederick maybe) used to sell Saab but at last check they had only 4 vehicles listed on their website.

Needless to say, I hope International hangs on. I've spent a lot of Friday nights eating with my family at Elevation burger and then roaming the Saab lot next door, dreaming.


I do hope the remaining Saab dealership in Houston closes as its a joke. There just needs to be a stand alone dealership at a more central location there.

The dealership in San Antonio, is a Sewell dealership, so the service is the best around. It is tied to a Cadillac Hummer, but each brand has its own separate showroom....should be interesting.


Neil I agree with you to a point. I to live in the DC area (Hagerstown) and yes we do not have a great dealer network but some of the ones we do have suck. VOB, Brewer and Valley motors in Towson are great dealerdhips and I hope all will be around when this is all over. Then you have Fitzgerald in Frederick they suck, some good mechnics but no one in sales that knows a damn thing about Saab they have no inventory now, never really did when everything was going well for GM. There are areas that should have a dealership because of the folks that live in these areas like Annapolis or or anywhere on the Eastern shore.
I don't blame SCNA from shutting down dealers that don't perform but I would like to see a list of dealers that they are closing.


Greg, 74stingray +1. I guess you just can't say you are exclusive, you need to prove this through your products. We are talking many years for this to happen.


At least 1 SAAB dealer in Chicago is a joke. They are the red-headed-step-child of a large BMW dealership, and would probably welcome the release from their contract. When I was shopping for a SAAB, they didn't have any new cars on the lot, only a few old second hand 9-5's. And this was when the 9-2 & 9-2X were new!
Another local dealer that I wouldn't mind seeing go, is part of a Cadillac dealer.

I would understand if they wanted to keep only stand-alone SAAB dealers.

I wish that closure list was public!


I drove by Deel Saab in Miami recently and they only had a few new Saabs heavily marked down. No used Saabs at all on their lots so it seems they are on their way out. They don't even have a Saab website anymore so that's another sign.


@Tony, Yes, a closure list would be more than fair.

BTW, I forgot about Brewer and I agree about Fitzgerald; but VOB being a great dealership? The sales and service department, didn't treat me that well. That's the reason I purchased somewhere else. When I needed my bumper repaired, VOB's body shop treated me so much better. Anyway, I too hope VOB makes it, especially International. I think they're one of the better ones.

@Sapan & James, about 3 years ago International had a 2002 Viggen with less than 80K miles.....for (I think) approx. $12K. Too bad, I couldn't afford it then.


I wonder if my local dealership will stay. In the few times that I brought my car there, it was pretty obvious to me they were taking GM for a ride....making up some of the craziest repair jobs based on very minor symptoms. This dealership's mechanics should be experts of head gasket repairs by now..hehe.


Saab dealers are few and far between in North America, losing even 1 is not good.

For GM/Ford/Chrysler they have been shedding dealers like crazy, but there are thousands of them and not far apart. But a lot of people are not going to drive 50 or 100 km to go to their dealer for warranty repairs!!


The Canadian market overall is about 10% of the size of that in the USA, but 4-cyl cars are a larger part of the mix, especially in Quebec and east. Montreal can support more than 1 successful SAAB dealers. There are 5 SAABs in my condo's garage alone and I see several a day on my 3 km walk (good for colesterol and carbon footprint!) to work. When I recently spoke to my dealer (the SAAB-Saturn showroom is now Hyundai) he regards SAAB as a strong seller and would eagerly sell them again . . . but as of two weeks ago he had heard nothing at all. GM Canada's franchise arrangement was different from the US's so it may be another round before we hear. They required a separate showroom (with Saturn) and separate sales and service sales staff. I am sure Canada can support more than 14 profitable dealers, but really I do think they need a quality entry-level car line in the same or an adjacent showroom. Such a paired arrangement would also assure more dealer access.


My dealership is staying, I didnt want to wait and I contacted them directly.

yippie!


Deel Saab is awful... but they are practically the only Saab dealer in Miami.


I don't care too much for dealerships, but Saab needs to get enough (meaning: near-by for every potential customer) repair and servicing stations. People will drive a langer turn for buying a car, than for having the oil changed.


SAAB OF TROY IS IN..


It seems like this was a decision GM to cut these dealers. Would these dealers have the capability to go directly to SCNA or SAAB to directly appeal or be continued on?

Can SAAB owners who are concerned about losing their preferred dealers write to SCNA or SAAB and bypass GM.???


As of this morning I was informed that our dealer (since last Summer) Sutliff Hummer Cadillac SAAB in Mechanicsburg (Harrisburg area) PA is no longer a dealer as of the end of April. They also indicated that Kelly Cadillac SAAB in Lancaster was also non-renewed...


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This page contains a single entry by Swade published on November 13, 2009 12:49 PM.

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