AutoGazette.de interview Victor Muller on the State of Saab

My thanks to Alexandros for sending through this Googletrans from Autogazette.de

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Interview with Spyker boss Victor Muller: Saab will be profitable again in 2012

The Swedish car brand Saab will be profitable again in 2012. In an interview with Auto Gazette speaks with Spyker CEO Victor Muller about the sales targets, new models and the booming Chinese market.

The fact that Saab is significantly behind sales expectations this year, on its way to profitability of the brand, is of no concern for Muller. “Although we will miss our target of 50,000 cars this year, we are more fully [engaged] in our business plan [now].” As the 51 year-old Muller said, he expects this year sales of at least 30,000 units, ideally perhaps 35,000 cars. Muller expects a boost for the brand in the coming year due to the introduction of two new models: the 9-5 SportCombi and crossover 9-4x.

“Enjoys it, that Saab is a part of Spyker»

Auto Gazette: Mr. Muller, do you regret that Spyker Cars took over the Saab brand in February this year?

Victor Muller: No, why should I? I enjoy every day that this traditional brand is now part of Spyker Cars.

Auto Gazette: To what extent can a brand owner enjoy that the sales expectations are so misguided as Saab? Originally you wanted to sell 60,000 cars this year, now it will probably only 27,000.

Muller: How did you get that number? Our business plan called for a global sale volume of 50,000 units in 2010. These numbers we could not achieve because GM stopped production in early January and we therefore could not solve problems with our suppliers to the extent as we had planned.

Auto Gazette: What numbers do you expect for 2010? In September it was around 18,000 sales.

Muller: We are expecting at least 30,000 units, ideally perhaps even 35,000 cars.

Auto Gazette: With this quantity Saab is far from reasonable profitability. How long will the financial reserves last, in order to keep Saab alive?

Muller: Do not worry. There are sufficient funds available to lead Saab again to profitability.

Auto Gazette: When will Saab be back in the black?

Muller: [The goal is] unchanged that from the year 2012 we will sell every year 120,000 units. Although we will miss our target of 50,000 cars in this year, we are more fully [engaged] in our business plan. Also, many things are already from next year for Saab much better.

Auto Gazette: Because then the new 9-5 Sport Combi, and the Crossover 9-4x will be two new products to market …

Muller: … exactly. These two cars are going to give strong economic growth and take the brand forward. For the 9-4x I expect sales of 9,000 cars in 2011 and the new 9-5 Sport Combi 17 000 units.

Auto Gazette: You have brought the new 9-5 Series sedan this year in to the market. Why isn’t this car so far well received by the customer?

Muller: The 9-5er is received very well, but unfortunately this car suffered especially from the consequences of the production stoppage in January, February and March.

Auto Gazette: How many units of the 9-5er are you going to sell this year?

Muller: Originally, there should be 17,000 units of the 9-5er, but because of production problems, it will probably be this year around 8000.

Auto Gazette: In Germany, the 9-5er had in November just 49 registrations. So the car is almost non-existent …

Muller: … of course we are not satisfied with these numbers. The German market is the market where we have to breathe new life to the brand again. We have with Matthias Seidl a new Sales director brought on board …

Auto Gazette: … and also the job of Managing Director be appointed ..

Muller: … yes, here it will be a change at the top. Germany is an important market for us, but not the most important. The key for us markets are Sweden, England and the U.S.. Here we make two thirds of our sales.

Auto Gazette: You’ve just announced that as of mid-next year, together with state-owned CATC the Saab brand will also sell in China? How many cars are going to be sold in 2011?

Muller: We calculate at the beginning with very low quantities, because we have to built up the sales structure. Therefore, we will probably start in mid-2011 with no more than 2000 to 3,000 units and from 2012 we are planning for 5000.

Auto Gazette: And how does it look from the sales perspective in China?

Muller: We are eager to get up to 10,000 units. From this quantity, it is equally interesting for us, to have a partner to build cars in China. But this will be no earlier than 2013.

Auto Gazette: What cars would you want to produce in China?

Muller: We would first like to produce the new 9-3 in China.

Auto Gazette: From 2012 BMW will supply Saab with modern four-cylinder engines. In which series are these engines going to be used?. Exclusively in the new 9-3, which should come in the same year?

Muller: In the beginning, these motors will be used only in the 9-3.

Auto Gazette: You have said that a small car, a Saab 9-2, is missing from Saab. From when [do you think this could be produced]?

Muller: Whether the car will be build is still undecided, it is also not part of our business plan. One thing is clear: if there should be a decision for this car, it can only [be with] a partner to implement. Currently, discussions have begun with a potential partner. But such a car would be placed on the market only after the launch of the new 9-3. This means the earliest in 2013.

Auto Gazette: Can Saab from its know-how and its financial possibilities in a position to offer its customers an electric car?

Muller: We will offer our customers a hybrid for the first time in the new 9-3. We also presented at the auto show in Paris this October the purely electric-powered 9-3 ePower, of which we will build 70 cars for test runs. After evaluating the test results, we will see if such a car will be built in series.”

Henrik
Guest
Henrik
5 years 8 months ago

I agree with the reporter when he thinks sales will be around 27.000 for 2010, but I like that Victor seems so shure about it beeing 30-35.000, I hope he´s right.
Or is it because Spyker i on the stock-exhange? 12-18000 sales in three months seem difficult.

Tim
Guest
Tim
5 years 8 months ago

Wouldn’t be a good sign to stockowners if VM keeps repeating the 30-35k figure and Saab can only sell 27k. As you may have noticed the trade volume of the Spyker stock is low, so news (good or bad) might have a big impact on the stock.

Henrik
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Henrik
5 years 8 months ago

He is not aloud to change it unless he comunicates it to all shareholders at the same time, but as I said, I hope he´s right.

Niklas D
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Niklas D
5 years 8 months ago

VM (and Saab) is talking wholesale to retailers and the reporter speaks of deliveries (registrations) to end users.

Henrik
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Henrik
5 years 8 months ago

🙂 that´s it! Of course!

Allan
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Allan
5 years 8 months ago

I sit on the board of directors of a publicly traded company and believe me, one thing that can have a negative effect on share price is to continually “overstate”. That seems to be a continuing issue with the current management.. I really want my beloved car company to turn things around and also have accountability with the shareholders.

Henke
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Henke
5 years 8 months ago

Yes of course you and the report have better information then VM so I trust you two instead.

Henrik
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Henrik
5 years 8 months ago

🙂 I have the deepest respect for Victor, he is the best that could have happened to Saab, I just don´t see how, but I hope he proves me wrong. Perhaps the ordetbooks are full and they sell everything they manages to produce and Victor knows that they are able to produce much moore in december or something.

andyb
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andyb
5 years 8 months ago

interesting that they are looking to manufacture in China.Volvo appear to have looked at this as well.I am heartened that Mr Muller is confident of finance for the future.

Robert P
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Robert P
5 years 8 months ago

Maybe I’m too crumpy, but what do these interviews add to the ones I already read like 10 times before? We all know that VM is on a tour and appearantly now Germany is the lucky country: if you google news for Saab, there’s an entire thread of German articles. Thankgod Victor didn’t say ‘Perfect Storm’ again 😉

Niklas G
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Niklas G
5 years 8 months ago

Nothing new for us, indeed,but in my opinion it’s still good to see that the VM and guys keep on spreading the message. It’s a big world and judging from the quoted sales figures for Germany, most German probably don’t have a clue about the current state of Saab, so I think that it’s an important mission for Saab to keep on repeating the same message to any newspaper or TV channel that wants to tell their readers/viewers about it. 🙂

zippy
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zippy
5 years 8 months ago

Victor is always so positive – love it! 🙂

saabken
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saabken
5 years 8 months ago

Anyone know what he’s sipping ? Cuz I’d like some of that too 🙂

Jake
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Jake
5 years 8 months ago

It almost bums me out that Saab is considering production in China. IMHO, Saab should stick to its roots, and manufacture the 9-3 in Trollhattan. I bet that if Saab had the funds and the control to make the 9-4X in Trollhattan, instead of Mexico, they would. But in the long run, I guess that’s what it all comes down to: funds.

Henrik
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Henrik
5 years 8 months ago

It is very expensive to import cars to china, you almost have to produce lokally for that market.

Jake
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Jake
5 years 8 months ago

In that case, I hope that the cars made in China stay in China, and other markets get mostly the ones made in Trollhattan! 🙂

SAAB_andee
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SAAB_andee
5 years 8 months ago

@Jake – production in china would be only for the chinese market. and this would be only an assembling plant. but you need about 10000 sales befor thinking about it.

derick
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derick
5 years 8 months ago

Perhaps VM is also considering the South East Asian market as well. With production in China and assembly partners in ASEAN, cost of the car can come down almost overnight and put Saab on a stronger pricing platform to compete with the German brands. At this point, Saab could be even higher priced than the German brands and to the Asian consumer, it will not work.

michaelb
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michaelb
5 years 8 months ago
It is not true that the interested German public is not informed about Saab, if you take car magazines as a reference. “Auto Motor und Sport” has correctly reported about the state of affairs at Saab, and has presented a review of the new 9-5. This week such a review is in the “autozeitung.de”. The test of the 9-5 is quite balanced, and hints to some scope for improvements in a 9-5 2.0l turbo FWD. Pros: – good design, roomy interior, good quality of the interior – turbo engine with good acceleration (0-100 in 7.6s) and quite acceptable fuel consumption… Read more »
Brad
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Brad
5 years 8 months ago

Hey,is the new 9-3 going to be produced in Sweden or China,I thought Muller was wanting to stay true to Saab’s roots.

JL
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JL
5 years 8 months ago

As I understand it: If you want to make it big in China, you most produce cars locally. This does not mean that you have to produce all of your cars there! A reasonable assumption is that 9-3 will be produced in Sweden AND in China. In a longer term perspective VM is probably looking at producing and selling more than 120 000 cars per year.

derick
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derick
5 years 8 months ago
My guess is there will be cars produced in BOTH places. In Sweden for Europe and the rest of the world and in China for the China domestic market as well as South East Asia and Pacific regions. It has nothing to do with nationalism but more of business. Having a manufacturing base in China can most probably bring down costs significantly enough for the brand to have a chance of penetrating the Asian market. Just look at what Peugeot and VW are doing for this region. Understandably, Saab’s numbers are small but then, it is anyone’s guess how much… Read more »
Vector-SS
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Vector-SS
5 years 8 months ago

I’m not sure if that’s what he meant by that comment, but it sure does look like it :S

Also, I’m really interested to know what other engine options we will see aside from the BMW 1.6.

Tim
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Tim
5 years 8 months ago

I’m sure that’s not what he meant. Just read/listen to other interviews, VM keeps telling he want to produce all cars in Sweden. But as people have said before, because of high taxesin China it’s important to build locally.

BoeBoe
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BoeBoe
5 years 8 months ago

If Saab starts to produce cars in China it will only be for the Chinese market. All luxury marques (BMW, Audi, Mercedes etc) produce (a lot of) their cars for the Chinese market in China.

BMW does this for instance together with Brilliance (known for the BS6 in Europe). Because import duties on foreign cars are extremely high it is cheaper to build the cars in China. And because you can only produce in China if you have Joint Venture with a Chinese brand the local car companies learn how to produce Western Cars.

BoeBoe
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BoeBoe
5 years 8 months ago
Is it me or do the projected salesnumbers for China look a bit optimistic? I don’t want to bash Saab or anything, but I just want to see if the numbers are possible. I found that Saab was active in China from 2002 until 2008 and that Shanghai-GM managed the import and sales activities. And they sold a maximum of 860 cars in 2008 with 16 dealerships. And next year the plan to sell 2.000-3.000 cars with a much smaller amount of dealers and less time. Saab hopes(!) to have 10 dealerships at the end of 2011 and official sales… Read more »
Coggs
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Coggs
5 years 8 months ago

Certainly a challenge for Saab in China but growth at present is through the roof there. Most figures I’ve seen show a 20 to 25 % annual growth in auto sales in China the last few years, and 2011 sales are expexcted to be double the number in 2002. Just wonder how long they can sustain that.

WM
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WM
5 years 8 months ago

Agreed, growth is really the key. To put it in context, the US auto market is projected to sell just under 13 million light cars in 2011. Sales in China for 2011? Projected at 20 million. And that’s after the discontinuation of some government incentives, and purchase caps in the major cities.

CATC doesn’t have the widest network AFAIK, but do have a long history of moving high-end imports.

So a challenge, but given the scope of vehicles (20 million!), certainly not undoable.

ivo 71
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ivo 71
5 years 8 months ago

As stated in the Saab press release, CATC will only be involved in the import of cars to China. The distribution, sales and service activities will happen through a new dealer network to be set up and operated by Saab themselves.

Ivo

andha
Guest
andha
5 years 8 months ago
I finally helped improve SAAB:s salesfigures. Just ordered 3 brand new ones for my company. One 9-3X for myself, one 9-3 SS TTid and one 9-3 SC 1,8t. Got a very good deal since the dealer wanted to get better sales figures before the end of the year. Feels really great to help SAAB survive. Sure I wanted the new 9-5 SC but the 9-3X will have to do ;=) Hopefully a lot more of us SAAB fans will order new cars in the new year! Just cant get my car fast enough, 6-8 weeks until I get it. Does… Read more »
Nate 9-3
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Nate 9-3
5 years 8 months ago

Great work out of you!

theSandySaab
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theSandySaab
5 years 8 months ago

Way to go, andha…
I wish I was in a position to order cars for my company! We are presently leasing numerous V70 (replacing a fleet of A6, which replaces a mixed of older V70 and 9-5 combi), but unfortunately I have no saying in the matter…. 🙁
Still, I can only agree to the somewhat mixed experience of the level of tech & trim knowledge of some sales reps – needs serious improvement.
More of these stories please!!!

TuuSaR
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TuuSaR
5 years 8 months ago

“why it has to take 6-8 weeks from order to delivery?”

Holidays and Saab uses only one production shift to keep costs down.

benrp
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benrp
5 years 8 months ago

Nice work! Richard Bransons Virgin music has a fleet of Saabs in their early days and we all know how successful they become.

David.Baxter
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David.Baxter
5 years 8 months ago

I think in 2011 we will all see if Saab is going down or will have great future and a way to go. I bet Saab will get another finanical aid from the European Investment Bank in the third quarter of 2011. Is that what VM thinks by saying “There are sufficient funds available to lead Saab again to profitability”?

The EIB is very generous and I think Saab will get a new loan, but not again and again…

Henrik
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Henrik
5 years 8 months ago

That is not likely, furthermore the businessplan i fully funded until 2012 and then Saab should be fine. EIB only lends money for 50% of the project, Saab has to put up the rest, otherwise they´ll get no money. Besides, the EIB-money is for enviroment/ safety-developement, not for running the factory.

David.Baxter
Guest
David.Baxter
5 years 8 months ago

I can not see big sales in China for Saab.
Chinese only want brands and the more brandish (!) the better. And Saab is very unknown in China. So they have to gain market share against chinese low-price competitor like Brilliance, Geely and Chery. That is very tough.

Henrik
Guest
Henrik
5 years 8 months ago

Do you know everybody in China? I remeber seeing quite a few Chinese cities in the Save-Saab convoys, did they not like their Saabs?
The typical Geely-customer will have no interest in a Saab and vice versa, besides price and quality Saab is one of the safest cars on the planet and Geely is the exact opposite. “Latin Ncap” crash-tested a Geely recently and it did not go well at all.

andha
Guest
andha
5 years 8 months ago
Holidays i get, will probably delay delivery with 1 week at least but it would be interesting to know more in detail why there are 5-7 weeks remaining. Does SAAB only order the parts when you place your order? One would think that it would be possible to foresee the production so that parts would be ordered in advance. I understand about not wanting to produce cars for the lot on speculation but customer ordered cars one might think to order parts in advance for. Maybe and hopefully SAAB are but it would be interesting to know more about the… Read more »
Henrik
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Henrik
5 years 8 months ago

5-7 weeks is NOT a long time, it´s normal or short time.

andha
Guest
andha
5 years 8 months ago

Hi Henrik

I know that 5-7 weeks is considered a short or normal time and compared to Audi for instance it really is short. But I would still want to know whats behind the 5-7 weeks? It couldnt possibly take 5-7 weeks in actual manufacturing of the different parts needed to build a car and with that in mind it would be great to increase my knowledge of the process.. Just hungry for knowledge.. And still a bit anxious to get my new car :=)

Henrik
Guest
Henrik
5 years 8 months ago

🙂
The last part I understand well!
I think they have to produce cars at the planned rate 100%, not 50 cars on monday and 45 on tuesday, so they adjust the prod. speed after demand. But of course they can´t predict the demand exactly so there you have your 5 weeks!
But you´ll enjoy it even more when you finally get it this way! Congratulations!

BoeBoe
Guest
BoeBoe
5 years 8 months ago

I don’t know where you live, but the new cars also have to be transported from the factory to your country/dealership. And they wait until a certain amount of cars for a certain destination are ready. So that can take a few weeks and then they have to transport te cars. And after that they have to be inspected and prepared for delivery. This all takes time.

Even if an already build car comes from a national ‘depot’ it can take up to a week for a dealer to receive the car.

Arild
Guest
5 years 8 months ago
Congratulations with your order! Saab needs people like you 🙂 About the lead time of 6-8 weeks. Remember that Saab has maybe 1000 subcontractors that make parts. Both these subcontractors and Saab have employed just enough people to cope with Saab’s current production rate. If the production rate is increased both Saab and the subcontractors need to employ more people. When you employ more people you incur higher costs and therefore you should be convinced that the higher production rate will persist. If the demand doesn’t grow as expected or even decrease and the lead time approaches a few days,… Read more »
David.Baxter
Guest
David.Baxter
5 years 8 months ago

Not everbody, but almost everbody 🙂 I know what you mean, but I think Saab is in China a unknown car with no name and face. So there are many competitor including Geely. Geely might dont have the safety, but the Look and home field advantage!

Henrik
Guest
Henrik
5 years 8 months ago

the Look?!?!?
Is that Rolls Royce´s copy or the Merceders copy?

Joe
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Joe
5 years 8 months ago

SAAB are marketing their cars as different and unusual.
So people looking for the mainstream will probably be complaining.
So the Chinese are all looking for me-too cars?
Funny that Volvo is ramping up for China, in that case.

Pedro
Guest
Pedro
5 years 8 months ago
Since they’ll be selling less this year, they’ll be bleeding more cash than anticipated in the business plan (unless the stop at the beginning of the year saved enough money to compensate, which I doubt), so it’s good to know funding exists for these sort of bumps in the road. I don’t wanting to sound pessimistic or anything, but it is critical that 2011 sales and average sales price targets are met. I wonder exactly how the financial model was built: less units and higher unit contribution margin (through higher average transaction price as one cannot cheap out on the… Read more »
JH
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JH
5 years 8 months ago

If I recall correctly, I think I heard Jan-Åke Jonsson in an interview not so long ago saying that they had been able to reduce the costs to compensate for the sales targets that was not met.

Henrik
Guest
Henrik
5 years 8 months ago
I heard that too, and that they were following the businessplan finacially despite of the lower sales. It´s intersesting that VM mentions the factory close down as one of the reasons for the lower sales this year, it must mean that the 50.000 target was in Koenigseggs original plan, and of course it must differ if the plant is shut down a couple of months. Perhaps since the whole deal depended on that businessplan, J-Å and Victor knew they couldn´t change anything in it, otherwise the whole chain would break apart, EIB, government guarantee etc etc. They did what they… Read more »
tmjr
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tmjr
5 years 8 months ago

Not like I want to get into trouble with SWADE but, right now, VM reminds me of the character that Kevin Bacon plays in “Animal House “where he proclaims “all is well” before he’s trampled by a rioting crowd. IMHO, sales in the USA are more important than sales in China.

Pedro
Guest
Pedro
5 years 8 months ago
China sales are SAAB’s “option to expand” chess tray. They need to be playing the chess game on both chess trays: new business and existing business. I don’t know how well SAAB was represented in the coastal areas which are the most import-intending areas in the US, but in case the dealer network was fully integrated with other GM brands it might take some time. It will also take some time for the 2011 9-5s and and for the 9-4 to get to showrooms. The cost side on JH’s reply is interesting but it has a limit. They can shave… Read more »
Pedro
Guest
Pedro
5 years 8 months ago

Sorry for the poor typing (could a post editing feature be added, btw?):
“sexi-veriable” should be “semi-variable”
and
“professioanlly-derived” should be “professionally-derived”

I should remember the old wisdom that proofreading posts is one’s friend 😉

Jim
Guest
Jim
5 years 8 months ago
2010 was a crippled year for the brand in many ways. With all respect to those with physical disabilities. The 9-5 was just barely launched for an abbreviated 2010 year, then had about 2-3 weeks as a 2011 car so far. Calendar year 2011 will have the FULL 9-5 sedan range, and hopefully the wagon will come online too with actual time to sell. Hopefully (again) the 9-4X will come onstream with time to sell. My hopes are not very high for the 2012 9-3 1-year special redesign. The current 9-3 needs to be produced, sold very inexpensively (I am… Read more »
Mark Orr
Guest
5 years 8 months ago

Interesting point is that VM said point blan that the 9-3 will be hybrid. I wonder then if the electric AWD will be standard and if it will be just the 15 hp or more…

Pedro
Guest
Pedro
5 years 8 months ago

That’s an interesting comment. I read it as implying a hybrid variant or trim level, but offering it as a hybrid only would be a differentiator (although cost and possible pricing implications of that cost could be an issue). More even of a differentiator if both gasoline and diesel models were offered with the electrically driven rear axle. It would be, paraphrasing part of the U.S. Pledge of Allegiance and Metallica’s song/album title “…And AWD For All” 😀

michaelb
Guest
michaelb
5 years 8 months ago
As others have pointed out, the interview does not contain major news, but clearly states, what could be supposed from other information. And it allows to think about potential business risks. VM clearly says that Saab is focusing on three markets, which represent two thirds of their sales, and which they consider as key: US, England, Sweden. China is a longer term objective, but will hot help substantially for 2011/12 in sales terms yet. I am just wondering about the wisdom of the business strategy behind that. Sweden is not a matter of dispute, it is Saab’s home market and… Read more »
saabaudi
Guest
saabaudi
5 years 8 months ago

The current Auto-Zeitung publishes a compariing test of Saab 9-5/Skoda Superb/Ford Mondeo with their 2.0 diesel engines of 160-170 hp.
Result: Superb 1, Saab 3.

Håkan
Guest
Håkan
5 years 8 months ago
When reading the article one wounders about the salesfigures. Muller: Originally, there should be 17,000 units of the 9-5er, but because of production problems, it will probably be this year around 8000. Is Victor saying that they could have sold 17000 units if they could have built them? Have Saab been refusing orders for 9000 cars? And if 8000 new 9-5s has been sold, there are they? I don’t see them on the roads in Sweden och the UK where I spent a lot of my time this year. There is an intresting article (in Swedish) abot why CEO are… Read more »
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