One man’s thoughts – manufacturing the essence of Saab

I received this from Jon C via email last week, as the SU Hi-Po Challenge was drawing to a close. Jon doesn’t propose a Hi-Po model framework here. He doesn’t give his version of what a halo Saab might look like.

What he does do, however, is take a brief look at what Audi did to develop their model line over time and what Saab might be able to take from this.

It’s a good thinking piece and I thank Jon for sending it in.

——

I have been thinking a lot this past week, whilst the HiPo challenge was concluding. It prompted me to do something I promised Swade I would do about 3 years ago. That was to share some insights I gathered while working for a dealer group comprising;
Volkswagen, Seat, Saab, Audi, Mercedes, Porsche, Volvo, BMW/Mini, Seat and – rather oddly – Suzuki (which was managed by the BMW franchise).

I pretty much saw each of the dealerships front to back and met some great and not-so-great people. I made one friendship that remains to this day. Some of it was fun and some of it a total nightmare. Trying to trace a water leak on an RS6 will stay with me ‘til the day I die. The fact that when we traced the leak we found it was leaking at the other end as well pretty much finished me off.

Lets go back to 1992. I was at Uni, my fellow countrymen were killing each other with depressing regularity and Sweden won the world ice hockey championships. Audi fields a range of 5 cars, BMW 4 and Mercedes 5 (I am discounting estates etc. as distinct models). The local Saab showroom contained a total of 2 display cars and had one service ramp. It was a different time, maybe even a different world.

In the world of today Audi, BMW and Mercedes are the industry leaders while Saab is on the painful road to health. What I want to address is why these companies succeeded (specifically Audi). I don’t intend to look at where Saab failed, that’s a painful can of worms that has been opened many times before.

Firstly, Audi know where they have been, where they are going and where they want to be. Audi looked at what creates prestige and the two biggest factors were driver appeal and product. Motorsport and heritage were well down the list. Audi also knew from prior research that “perceived” quality was far more important than actual quality when selling a car and generating an image. Their research found that if, for example the car had a well constructed glove box, the customer subconsciously figures out that the gearbox will be equally well built and therefore more reliable. It’s the same factor that makes SUV drivers think that their car is safer. Not logical but people aren’t always logical.

Thus you will remember in the mid 90s things like damped grab handles and clever boot/trunk hinges appearing on German cars. The public perceived that Audis were better built than their competitors. You may argue, but I respectfully suggest the sales figures support Audis research.

Secondly, they made desirable cars. Hard to remember now but think of the impact that the TT made when it was launched. It was similar to the “ipod” effect. As people who were perceived to be trendsetters bought the car, potential customers who previously dismissed Audis as “old men’s cars” now felt comfortable with the idea of owning a TT and any other type of Audi. People who would not enter a Saab, BMW or Mercedes showroom. Combined with the A3 this means that those first customers are now moving into A4s, A6s and A8s. Audi will have customers who have never driven anything else and have no inclination to do so.

Thirdly, they marketed and publicised shrewdly. Princess Diana drove an Audi convertible. Sales in London rocketed. They made sure A8s were on side for chauffer duties at awards and major sporting events (if its good enough for movie stars…)
They run careful, well-respected advertising campaigns cementing brand awareness (where the product and message take centre stage, the slogan is incidental).

Lastly, customer service. Cars can go wrong, things can go wrong but the manufacturer must step up and support the dealer in fixing problems. That builds trust.

The interesting thing is that the cars are regularly criticised by the press (at least in the UK) and always come second to BMW at best. The public don’t seem to care.

So my message to Saab? (A big presumption on my part, that my opinion matters).

Keep doing what you are doing. Desirable product will always find success. High power models and advertising slogans are “quick fixes” that never last (if you even fool them in the first place). I do not suggest that Saab copy Audi – they must find their own way – but mistakes from the past must not be repeated. For example AMG, S Line, M Sport, all clearly defined sub brands while Saab has Aero, Viggen, Carlsson, TurboX. The sheep (sadly the people we need to pay the bills) need a clear strategy from the brand from top to bottom (and I think we are on the right road).

I make no comment on whether Saab needs more horsepower or lighter cars but I will tell you that in a world where BMW is dropping rwd on the 1 series (because the customers don’t care), the big 3 are dropping V8s and Porsche is developing hybrids we (and Saab) must not be dogmatic. We must hold onto what is important – the essence of Saab – but we must also move with the times.

shp2rd
Guest
shp2rd
5 years 7 months ago

+1!
I totally agree, SAAB must find its own way!

Troels, Denmark
Guest
5 years 7 months ago

I also agree Saab must go its own way. But I have to add: The Saab-way have been – an sill is – much more “its own” – much more original and unconventional – then Audi, which, in some degree, represents the essence of conformity.
So Saab; stick to the heritage, the non-conform and independent way of thinking and the progressive innovation and design! That´s what I like so much about Saab (in combination with the pioneer-spirit and the, some times “down-to-earth” yet avantgardistic approach to innovation ) 🙂

till72
Guest
till72
5 years 7 months ago
Great writeup. And you’re just right, Saab has to concentrate on it’s essence. and now as they can go their independent way I’m pretty sure the can find their way. The funny thing about the Audi comparison: in the late 1960s whwn Audi was still “Auto Union” the brand was due to be closed and the factory in Ingolstadt was about to become just another VW Beetle manufacturing site. Dr. Kraus, the director of development at Auto Union by then and his team developed the first Audi 100 in total secrecy because bis mother VW had strictly forbidden it. To… Read more »
J Fan
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J Fan
5 years 7 months ago

Excellent piece, thank you! 🙂

Gunnar
Guest
Gunnar
5 years 7 months ago

Great writing from Jon C!

saabdude
Guest
saabdude
5 years 7 months ago

Well said…I couldn’t agree more.

Charlie
Guest
Charlie
5 years 7 months ago

amen.

The perceived quality is huge. Something that GM never understood. Saving a few dollars here and there for cheap plastic hurt. Everyone is on to that particular game now, but there are a lot of ways to differentiate yourself. Make an aluminum rear view mirror. Or a world class glove box. Or anything small that you can point out in the details when selling a car.

no 9
Guest
no 9
5 years 7 months ago

I always thought SAAB should be inspired by Audi. They came back from the near dead (remember the 5000s with the sudden accelerating problems). Nevertheless, that car put them on the map because of it’s new styling. Perhaps the 9-5 is distinct enough to do something like that but it’s harder today to impress with a design. Before the 5000, the Quattro made its mark. Look at the new interpretation of the Quattro! And then the TT… So mix those ingredients together cause its catch up time SAAB!

Thylmuc
Guest
Thylmuc
5 years 7 months ago

That was not a near dead experience for Audi, just a minor itch in the USA. No one in Europe really seemed to care, the more so after it turned out that it was a lack of competence on the drivers’ part.

Mike C
Guest
Mike C
5 years 7 months ago

Very well said. Problem in New York (Northern Westchester) is that we can’t get the word out when dealers are closing down…

Red J
Guest
5 years 7 months ago

I’ve checked the statistics of goddcarbadcar.com, and I wouldn’t say that Audi is doing that well in the States or Canada, at least not in 2010.

US:
E-Class 61.000
5-Series 40.000
A6 only8.600

Canada:
E-Class 3.914
5-series 2.382
A6 596

It would be OK for Saab to reach Audi figures, but Audi’s sells worldwide are at least 10x higher than Saabs.

GerritN
Guest
GerritN
5 years 7 months ago

I think that Audi is slowly being perceived as being boring.

74stingray
Guest
74stingray
5 years 7 months ago

really? not around here as they seem to be quite plentiful

GerritN
Guest
GerritN
5 years 7 months ago

I’m not saying that there are not many around and many sold. Just that Audi has to be careful with their apparent change in perceived image. I think that it was in the January issue of the Top Gear magazine that it said “more of the same” about the new A6, meaning that the professional interest is waning.

saabdude
Guest
saabdude
5 years 7 months ago

“I’ve checked the statistics of goddcarbadcar.com, and I wouldn’t say that Audi is doing that well in the States or Canada, at least not in 2010.”

Huh? I have no idea of where you got your information…but…Audi have set record sales in the US…and worldwide…in 2010.

http://www.audiusa.com/us/brand/en/about/main/audi_news.detail.2011~01~historic_record_year.html

As for the top 30 luxury cars sold in Canada in 2010. Well…

The A4 is # 6…with increased sales over 2009
The Q5 is #14…with increased sales over 2009
The A5 is #22…with increased sales over 2009

http://www.goodcarbadcar.net/2011/01/canada-best-selling-luxury-cars-2010.html

Red J
Member
5 years 7 months ago

Sorry,
but the only thing I can read from that is, the A5 is cannibalizing the A6.

If Audi has a record sales in the USA, it doesn’t mean that Audi is selling lots of cars.
The A4 is #6 (???)but those are the sales numbers in Canada
#1 3-series about 14.000
#2 C-Class about 8.000
#3 A4 about 5.2000

And what about the US
#1 3-series about 100.000
#2 C-Class about 58.700
#3 Infinity G about 58.100
#4 Cady CTS about 45.500
#5 A4 about 34.600

saabdude
Guest
saabdude
5 years 7 months ago
“If Audi has a record sales in the USA, it doesn’t mean that Audi is selling lots of cars.” You’re not really serious…are you? Audi sold 101,629 cars in the US in 2010, that isn’t a lot of cars to you? Sure put a big smile on Audi’s face. In SAAB’s BEST sales year…EVER…WORLDWIDE…they sold 133,137 cars. http://www.trollhattansaab.net/archives/2007/01/global_sales_re.html Audi sold nearly 1.1 million cars worldwide LAST YEAR…and I suppose you don’t think that is a lot of cars…do you? That’s more than SAAB have sold in the last TEN YEARS. Do you think Audi care what the breakdown is amongst… Read more »
Red J
Member
5 years 7 months ago

In my life I’ve only sold 1 car, so I may have no clue on whatever. I’m simply a poor guy copypasting numbers on my computer while eating pizza.

I’m sorry.

Jon C
Guest
5 years 7 months ago

In the hope of diffusing the situation, there are lies, damn lies and then statistics 🙂
Remember that the 3 series Saloon, Estate, Coupe and Convertible are all 3 Series. The A4 Saloon and Avant are classed as different models from the A5 Coupe and Convertible. The C Class is even more confusing including hatches and an E Class coupe based on the C Class. And dont get me started on the engine badging….
That is the beauty of a diverse model range you will always be selling something!

GerritN
Guest
GerritN
5 years 7 months ago
“Do you think Audi care what the breakdown is amongst the different models? Do you think SAAB would care either? The answer is no. All they want to do is sell the most cars they can…regardless of the model.” Somehow this doesn’t sound exactly right. For each model you have to make a certain investment in design and production facilities. Do those investment not have to be recouped? Of course if one model in a lineup sells in infinite numbers from day 1 then it pays immediately for the investment costs of all the other models too. In reality the… Read more »
No 9
Guest
No 9
5 years 7 months ago

The A4 and now the Q5 are their bread & butter. In Canada for sure. Surprised at the low numbers for the A6 though.

Thylmuc
Guest
Thylmuc
5 years 7 months ago

But there is also substance in Audi’s slogan “Fortschritt durch Technik” (progress by technology) that goes back pretty far:

-Audi 100, first saloon with a cw of 0.30
-Audi V8, with a -you guessed it- V8 engine
-Quattro, as a car and as an AWD technology
-ProconTen, a less successfull alternative to airbags.
-TDI very important
-Audi A8, showing that they could built a luxury car (halo effect)

etcetc

Volkswagen in most instances reserves new tech to show up in Audis first. (this is imitated by Fiat with Alfa Romeo)

Kjell Erik
Guest
Kjell Erik
5 years 7 months ago

A little correction. Procon Ten came with airbags on the audi 100 C4.

Ted Y
Guest
5 years 7 months ago

I like the idea of a consistent sub brand. For some reason, I think the name “Carlsson” has a ring of quality, prestige and strength to it — I think I know why 🙂
I think a Carlsson sub brand or series, either for pure sport, or high luxury, would work well for Saab.

zippy
Guest
zippy
5 years 7 months ago

Great stuff!!! I think what Jason and his design team have up their sleeves is going to be a real game changer for Saab. I am guessing we will be looking at Saab’s “TT moment” when said car is released.

Saab Up! 🙂

GerritN
Guest
GerritN
5 years 7 months ago

Imho, ‘solid’ and ‘engineering’ are the key words for Saab to be successful. Styling is great but I, and apparently many other people, like the solid ‘thud’ of a well engineered Saab door closing (just to name one example).

Audi has that same solid engineering perception, which explains why so many Saab drivers defected to Audi. Unfortunately there also seems to be a perception now that Audi is becoming boring and their design language is getting tired.

Jon C
Guest
5 years 7 months ago
Thanks for the comments. I do want to stress that I don’t want Saab to copy Audi, its just that I had experience of working for them and I want to try and show that their success was not built around an advertising strap line or the S Models. Where they were successful was when they did their own thing. The A3, TT and R8 seem mundane now but they were groundbreaking at the time. I remember debates as to whether the A3 would destroy brand credability. When they failed it was down to following the herd – creating an… Read more »
Iiari
Guest
Iiari
5 years 7 months ago

I agree as well with everything written here…

I think looking at A6 sales numbers in the US is a bit deceptive, as it’s never done well here. Looking at A4/5 and Q5/7 numbers may tell a different story. The new A4 feels like it’s everywhere here, and I know many people (including some former Saab owners, sadly) for whom Audi has somehow replaced even MB/BMW as #1 on the “smart luxury buyers” lists…

Certainly, working on “perceived quality” needs to become a much higher priority for the Saab folks than before…

Jeff
Guest
Jeff
5 years 7 months ago

Fantastic piece Jon.

jamie
Guest
jamie
5 years 7 months ago

mabe audi dont rate motorsport of mutch importance now but that is what made them what they ar today.before the quattro came on the rally scene in the eighties audis had the image of being good solid boring cars mainly driven by older people.but the world rally succsesses with the quaro turned them into being sexy and desireabel and they havent looked back.i think mabe saab ar needing to go back to their roots and relaunche themselves into motorsport.but will prob have to wait for the 92 as current models ar a little cumbersome.

Jon C
Guest
5 years 7 months ago

Not sure I would agree Jamie, The Quattro was rated but that did not translate into big sales. The real breakthrough came in the late 90s early 2000s when the Quattro was a distant memory. Motorsport was an additional marketing tool rather than a sales driver. That said I would love to see Saabs sideways once more when they are making a healthy profit.

RS
Guest
RS
5 years 7 months ago
Jon, I have to agree a bit with Jamie here. Audi’s backbone and credibility in imo comes from the Quattro S1 era in the mid 80s. That’s what people that are in the financial position to buy an A still remember very well. The FWD/AWD and performance made it a serious contender but not until they where able to translate all that engineering into a design that got closer to BMW, where they increasing sales. I remember the Audi 100 being a real barge that didn’t get the kids excited about Audi at all, but when they came out with… Read more »
TP
Guest
TP
5 years 7 months ago
I concur with Jamie and RS on this one. Audi was not a brand I would even remotely consider prior to the Quattro. But that was just the first small step. Since then they have gone on to win the Le MAns 24 hour race multiple times and made a strong effort in the German touring car championship. They also have made significant ties between technology developed for motor sport victories, later deployed to their consumer cars. I am a performance enthusiast and my company car: Audi A4 Avant is boring/dull and lacks the dynamic and agile feel of my… Read more »
Dreadnought
Guest
Dreadnought
5 years 7 months ago
Excellent piece from Jon C.. He absolutely nails it when he talks about the rise of Audi in the mid-90s, the importance of what he calls “perceived quality”,and the unimportance of “motorsport and heritage”. Only a very small percentage cares about “the Audi Heritage” or Saab’s past or future success in rally racing, or whatever. When I was car shopping back in 2005, I pretty much narrowed my choices down to two cars, the 9-3, and the A4. I wanted a “premium” sedan , non-RWD and a manual transmission, and that was pretty much my two choices. (I elimnated the… Read more »
Dreadnought
Guest
Dreadnought
5 years 7 months ago

And one more thing. Jon C. is on the mark again when he talks about how Audi changed their image with shrewd marketing in the 90’s. The TT, the celebrity stuff, Skip Sudduth racing around the streets of Paris in an S8 in “Ronin”, all those kinds of things gave a kind of charisma to Audi that it never had before.

Chris
Guest
Chris
5 years 7 months ago
We are Saab fans and we know about Saab heritage, essence of Saab, etc, because we were interested and learned about them. But the majority of the car buyers out there have not a clue about these “values” or they are never interested to find out or they don’t bother. Why would a normal, regular, potential buyer be interested in buying a Saab? Saab has to offer something that others don’t, or something that appeals more to the eyes of the buyer. Looks and design are the first things that appeal to a car buyer. Technology and powertrain specifications come… Read more »
Jon C
Guest
5 years 7 months ago
RS- I completely agree that the Quattro is a component of the brand image but Audi (not me) did the research and know it is a very small part of that image. The reason I feel strongly about this is that by making statements such as the Quattro making them what they are today gives the false impression that one car built Audi. The Quattro was a tiny (but significant) part of that plan. I feel it does a disservice to all of those who work really hard to get this stuff right (and wrong). The mid 40s individual with… Read more »
RS
Guest
RS
5 years 7 months ago
Jon, forgot to mention that I agree with you 100% on the perceived image factor that made A what it is to day, but don’t forget it still relies heavily on the rally/halo effect. Just look at last years Geneva motor show. The first thing they did was drive the old quattro rally car on the stage, after that the RS5. I’ve driven their base cars that people (in their 20s and 30s) buy so much and they never impress me. It’s more about the rings on the grille than anything, but sales is doing so well because it has… Read more »
BaRa
Guest
BaRa
5 years 7 months ago

Thanks for the contribution, JC. You hit the nail right on the head. Perception is everything. Which is why I really like the effort Muller and Jonsson are doing to keep Saab in the media.

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