Saab dropping production to 28 cars per hour

This news has been running as part of a discussion in comments but it’s worthwhile bringing it to the front page here.

There are several reports around, but the best informed seems to come from TTELA and was translated in comments by Börjesson:

——

Reduced rate of production for Saab

Saab has reduced the rate of production from 39 cars per hour to 28.

– I am confident that we will raise the pace again, and then we will need more employees again, says Håkan Schött, chairman of IF Metall (union).

The sales target of 80 000 cars a year still stands for Saab, but in the factory, the production rate has now fallen to 28 cars per hour. January and February usually mean lower demand in the automobile market.

– Sales usually pick up in early spring, and then it remains to be seen what we need to raise the pace to, says Håkan Schött……

…….Is the sales target of 80 000 cars this year a realistic goal?
– Absolutely. I do not see why we shouldn’t make it, says Håkan Schött.

The union chairman thinks the future looks bright for the industry, and Saab will increase the production rate later on, when the order books begin to be filled.

The first step is to increase the production rate, the second step is to reintroduce a second shift.
– I have no crystal ball, so I can’t say much more about the future than that it looks bright, says Håkan Schött.

Joachim Flodin, TTELA

——

This seems to be a seasonal cut – Saab responding to real-time demand. Saab can step things up pretty quickly when Spring gets closer.

As I mentioned in comments, a friend in Trollhattan with well-placed contacts has indicated to me that there are plans to bring the plant back to capacity in the very near future (a matter of weeks was mentioned, however I don’t want to hold him to that in light of the report from TTELA).

28 thoughts on “Saab dropping production to 28 cars per hour”

  1. News hasn’t seemed to bother investors. Seen the price of Spyker stock the last few days (and weeks)? Nearly doubled since last Friday. Was 2.65 a few months ago and hit 7.65 this morning.
    Yes, I know it can (and has) fallen just as fast.

    • This news seems to have bothered investors cause the stock is down to Euro 6,55 again. Trading volume is about 55 times higher…

  2. Someone needs to adjust the current terms of available leasing.
    This is an area of challenge that needs immediate attention.
    At the moment, SAAB in NOT competive in that area and will negatively impcat sales..

    • Saab doesnt even lease here in Canada but I hope that changes when I take a closer look at the 2013 9-3.

      • Not yet! Rest assured, leasing is on the way. The word I have is early February for rates, but it’s not firm yet. There WILL be rates for the 2013 Zippy! 🙂

  3. I believe this is what is called “lean production”. It’s just stupid to have a production level higher than the demand. At least here in Sweden, I believe car sales are low in the middle of the winter and increase in March-April. At that time we will also have the new Saab 9-3 Griffin here with the 119g TTiD SportCombi which hopefully (and probably) will sell very well. 🙂

  4. Saab inventory in the USA was 269+ days of supply on Dec 1. This is the highest for all car makers (Mitsubishi is second at 112 days) and a very unhealthy number. Dealers are having a hard time getting rid of 2010 models at up to $15K discounts. I really hope this is going to turn around for Saab very soon.

    • I believe it’s turning around for Saab…These statistics do become very extreme for an automaker that has had a dip in sales and are re-entering and/or re-stocking any market…

      A question to you Wulf, these numbers regarding DoS are they based on previous 1 month, 6 months, 12 months or what? Because I believe that does have an enormous impact in these figures, especially since in november US dealers were eagerly anticipating delivery of MY -11 vehicles and sold very few cars… (300 something compared to about 1000 in both october and december)

      • Data from Automotive News. The average for all manufacturers was 67 on December 1st. January 1st numbers not available yet.

        Days supply: Number of days needed to sell all vehicles in inventory,
        based on the previous month’s daily selling rate
        Inventory: Unit count of vehicles on hand at dealerships, factory lots, ports of entry and in transit on a specific date

        Saab days supply numbers on
        November 1st: 113
        October 1st: 127
        September 1st: 324
        August 1st: 145

        • Thanks Wulf, now Iknow a little more about the numbers.

          Seems that Saab were on par with Mitsubishi on November 1st, but the dip in november would suggest that the DoS corresponds quite well to an inventory of similar numbers in october and november.

  5. Oversupply is an issue and the 1st months of the new year are always slow. Better wait a couple of quarters to see how the picture evolves 😉

  6. I am not surprised. Saab “stuffed” their dealers/importers at the end of 2010 so they could present ‘nice’ wholesale figures (ex gate factory). Wholesale figures were 15% higher in 2010.

    Now those dealers/importers have to sell the cars and that seems difficult. Retail sales were still 29% lower last year.

    • It’s true that retail was down by 29% last year…

      But another aspect that’s important to remember is that in 2009 retail was about 100% higher than wholesale (roughly 38000 sold and 25000 made, Swade has the proper figures posted around here somewhere), and the dealers need to restock…

      Hence a real concern would’ve been if retail had been greater than wholesale in 2010 as well…

  7. “Now those dealers/importers have to sell the cars and that seems difficult”

    Apart from USA and maybe few others, factory output means direct customer orders. I think Saab learned a lot from GM’s mistakes, how its not smart to ram cars out at certain pre-fixed speed.

    Saab wants to maintain certain safety buffer in orders, that way factory runs better.

    Due to class leading diesel model, Saab needs to up their production in a matter of few weeks.

    What comes to stock numbers, has to remember that it’s mostly speculators and quick profiteers.

    • Apart from USA and maybe few others, factory output means direct customer orders.

      Not completely, of course. A dealer has to have a popular cross section of cars on display, and as these cars get sold (although often not fast enough), he has to order new display cars. And those orders have no customer name attached to them.

  8. This is OLD news… SAAB started to prepare for this in November and went down to this rate on the 1st of January. Better times are ahead! =)

  9. Message to Håkan Schött – SAAB’s priority is to sell cars. Do that and production increases and 2nd shifts will come naturally.

  10. 28 cars per 8-hour shift per day, 5 working days per week, some vacation days, adds up to about 55,000 to 58,000 cars per year?

  11. Well to be honest I am not surprised. SAAB has a long way to go and alot of praying, luck, etc to turn the company around.

    However, the following points below are very serious problems that threaten the survival of SAAB here in the U.S. (much worse than the U.S. perception of VW back in the late 80’s and early 90’s, and VwoA had alot more money to burn) that has not changed since they were saved last year (which is both frustrating and infact makes me furious):

    1. The dealer network- Besides a few isolated decent ones in New England and NY
    2. The quality of service personnel (it is hard to find a service technician who actually gives a damn about SAAB and this is a systemic issue, not just an isolated case of the terrible SAAB dealer network here in Southern California.
    3. Sales support (lacking or none)

    Real action instead of excuses is the only course of action IMHO so get it together SCNA and soon!!!

    At ths point I have to believe that there are probably only a thousand or so (thousand, yes I said thousand) REAL (not just the ones that plede there allegiance to SAAB and then look elsewhere as it is too difficult to find a dealer or a worthwhile one to spend your free time at) SAAB followers in the U.S. out of 300 million people in this country that are staying loyal to SAAB or even thinking about buying a 2011 9-5 or 9-3.

    Of course I could be dead wrong.

    I did my part. I bought a fjord blue 2010 9-5 Aero in November…

    SO get it together SAAB!!!!!!!!!!!! I do not want to be driving my 9-5 with no company or service to get it fixed at!

  12. I can count a little, and it seems to me working a 10 hour day, 5 days a week for 50 weeks still adds up to about 70,000 units per year, so what with this jumping out the window stuff. The goal is only 80,000 for the year.

    • Hi

      To clear things up, in Sweden the yearly working hours is about 1 700 hours. The calculations below might be a little overstated, as you not always can run the production 100 % of the time.
      With one shift and 29 cars per hours, this gives about 50 000 cars / year.
      With 38 cars per hour, this jumps to 65 000 cars / year.
      Thus, in order to produce > 71 000 cars during 2011 (taking out the 9 000 expected 9-4’s , we could assume a second shift coming in, possibly after the summer.
      The theoretical capacity of the factory with 3 shifts could reach 200 000 cars per year.

      • We also have to remember that Trollhattan is NOT the only production site for 2011. The 9-4X will be made in Mexico and they will probably run as many as necessary, If the 9-7X taught us anything, it is that the SAAB SUV can outpace the GLOBAL sales of the 9-5 by selling in just the USA market. I think 80,000 units per year is a stretch goal but could be achievable if the 9-4X launches early and successful. No reason it can’t given that GM has had the sister vehicle in production for a bit now.

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