Sales for January 2011 are as follows:
Saab 9-3
– 512 Saab 9-3s were sold in January 2011. This is a rise from the 429 sold in the same month last year.
There are 2,798 Saab 9-3s currently in dealer stock in the US.
Saab 9-5
– there were 146 Saab 9-5s sold in January 2011. This is a rise from the 65 sold in the same month last year.
There are now 1,840 Saab 9-5s currently in dealer stock in the US.
Total
There were 658 Saabs sold in the US in January, which is up from the 511 sold in the same month last year (incl 17 units of the Saab 9-7x).
There are now 4,638 Saabs in dealer stock in the US.
——
On the bad side……
Comparing all brands, Subaru spent the least in January 2011 at $548, followed by Porsche at $656 per vehicle sold. At the other end of the spectrum, Saab spent the most – $8,124 – followed by Cadillac at $5,641 per vehicle sold. Relative to their vehicle prices, Saab and Chrysler spent the most, 19.9 percent and 15.6 percent of sticker price, respectively; while Porsche spent 0.75 percent and Subaru spent 2.1 percent.
Someone’s going to have to come up with a sales strategy that doesn’t involve giving cars away. I still prefer the better equipment theory, with a touch of competitive leasing thrown in. To their credit, Saab are now working hard on the awareness side of things.
Thanks to John.
Yup. Subaru and Porsche certainly have the brand awareness their companies want here in the US and nobody has any worries that they will stay in business. While other brands had “end of year” deals going on that stretched into January, I do not remember seeing many ads for end of year deals on Subarus.
I find it really interesting that Cadillac had to do that much discounting to move cars. Cadillac certainly has brand awareness, but perhaps they are losing sales to European brands and Lexus, Acura, etc.
The numbers show Saab dealers in the US have inventory so raising brand awareness and reintroducing customers to the unique features and value of Saab cars is job #1 now.
I think the article Swade refers to is about money spend on advertising, and not discounting.
That is what I thought at first, too, that it was advertising cost….but Swade’s last comment about “a sales strategy that doesn’t involve giving cars away” I assumed meant that the cost in incentives offered was also factored in to this “cost per car sold”.
It is a pretty important difference 🙂 I couldn’t read out from Swades reference what’s it is all about.
Sorry. I should have included a link.
It’s about Edmunds’ latest True Cost of Incentives report for January. It’s not about advertising spending, unfortunately.
Swade – I agree with your statement.
I just purchased a 2011 9-5 turbo 4 (manual transmission – base), and received $3850 in cash incentives. I did not get a sunroof, HID lights, HUD display, HK radio etc. I think Saab should consider making some of this equipment standard which may reduce the need for incentives. It’s a tough call – and I will state right up front – that I would not want to be the person making these decisions.
The US market is insanely competitive right now. I could have waited a few more weeks and went home with a new Buick Regal turbo with all of the above equipment (less the HUD) for a dealer quoted $27,850 after incentives (conquest and GM Card).
All in all – the new 9-3 can not get here soon enough.
On the plus side, I absolutely LOVE my new 9-5!!
Congratulations on the new car 🙂
Swade, I wish you’d put up a ‘my car’ section where people could upload a picture of their car/themselves, just so we can see who is who. I’d love to see these new 9-5’s that people have. And I’m sure people would love to see the old Volvo’s that I spend most of my time in 😀 When you did the forum, I think it was the most popular section. Any thoughts on this, or plans for the future?
To me that just makes Saab better value. to saab it’s a short term proposition-eg unsustainable…but it’ll come now the ad campaign is going…I am not unduly worried, I think it’ll be momentum building now..and with clear focus on newer markets I think that are covering their backsides and maybe even stealing a march (smaller=more nimble) on other major brands. At least that is my hope.
It’ll take a while for the incentives wave to go away, basically because awareness and momentum are so difficult to build.
This is disappointing above all the 9-5 sales. Continuation of the bad numbers from Q3/4. Will be a difficult task to get up. Hope marketing, the new models, and 9-3/9-5 improvements will help to get into 1 or 2 gears higher.
Ouch!
Looking at the SaabUSA website just shows how hard other countries have it. You choose the base 9-5 in the USA – and you get the 2.0T engine and almost EVERY option – and all for a lot less than anywhere else…
Hope sales pick up soon.
I think selling those 500 MY’10 9-5 was more difficult than SCNA thought. I hope the new sales structure and the new people on charge will make less such decisions.
Incentives right now are certainly not helped by so many 2010s still on dealer lots. A lot of dealers will still being shipped 2010s in August and September, if I recall. That’s unusual, but a product of the mid-model year launch in the US.
I still maintain that if Saab NA were to realign their sticker price closer to the actual transaction prices, it would be better for not only the marketing department and dealers, but the bottom line. I think it’s silly when people look at the MSRP of a 9-3 convertible or 9-3x, balk and walk away to buy a VW Eos or Subaru Outback. Volvo recently slashed prices of the XC70 and XC90, which is probably how they’ve been able to stabilize sales without any marketing for most of the last year. I believe the 9-3’s $40-50k sticker prices should be cut by 8-10 percent, which is about what they’re actually selling for these days.
Having said that, the US numbers are a little higher than I would have guessed. January is such a soft month, and the eastern states have had a series of storms – like the one pummeling Boston today. In Saab strongholds, I can’t imagine anyone standing on a car lot right now. But when the snow clears up, it could help XWD sales.
As one of those 512 (new 2010 9-3 picked up last Friday from JMK) I would say the 6K rebate made all of the difference. I looked back in my records and I paid $17900 for a 1985 900T brand new, delivered to me when I was stationed in Germany.
$23K for a new 9-3 25 years later is a great deal and while I wanted to wait for the new 9-3 hatchback in 2 years time I couldn’t afford to!
For 23-25K a new 9-3 is a great deal compared to a BMW or Audi. If Saab can still make money selling them for that then the word needs to get out and I think the cars will sell themselves.
My lease on a 08 9-3 is up in 2 mos. My residual is ~21K. Throw in $2K more, and I could buy a new one. Yowza! To bad I never really bonded with the 9-3 (drove 9-5s from 99-08)…
I completely agree with aaron c — if the price is in line with what people will pay, then Saab has a huge marketing point. Have a low MSRP and don’t discount.
For me, personally, I first looked at buying a Saab about 4 years ago, and I saw the base 9-3s were around $27K MSRP. In my case, that was effective marketing, as I could get a 9-3 for not much more than, say, an Accord, which I didn’t want anyway.
But I’ve never understood the idea of starting with a high price and always discounting, whether it’s cars or clothes, like many retail stores do (in the US at least).
Still, the number’s are better. As I remember I bought one of the 500+ or so 9-3s sold in January, 2009.
I know I have said this before but how about a warranty to beat all warranties. It got Hyundai ALOT of attention (and sales) when they did it a few years back. It would definitely sell more cars and help with residuals. SCNA needs to get more creative.
+100000.
10 years/100,000 is what Hyundai offers. How about 15 years/150K? Not enough? Check out Chrysler. Could that be replicated?
I might run a book one who’s going to run the first “infinity” warranty. Then the Infinity+1, followed by the “My Dad’s a Policeman” warranty.
OK, serious note, then. It would indeed be good if they could up it.
But I’m sure the relative size of some of those companies has something to do with the warranty they can offer. Eg. Hyundai is a massive industrial complex and small engine claims wouldn’t bother them too much. The image gain from the 10/100,000 far outweighs the relative cost to the whole business.
Either Chrysler are throwing a Hail Mary there, or their stuff really is that reliable.
Swade, it’s not very often Saab has problems with engines is it? I bet that Chrysler warranty has more holes in it than Swiss cheese.
I’ve seen a lot of complaining on Chrysler/Dodge/Jeep message boards about how difficult it is to make warranty claims. The consensus is that they will always try to blame you, and you better have every bit of documentation required or they’ll deny.
This discussion always comes up when it comes to US sales. It revolves around;
1. Trim level including motor / gearbox issues (missing certain US like things)
2. Incentives (too large rebates – wrong initial price).
3. Warranty issues (prolong, change)
4. Service – included or not and for how long
5. Lease deals
6. Awareness, related to PR
7. Dealer network
8. Other stuff
I could in this note discuss this more in detail, but I think it would be interesting to have a separate post (or posts) discussing these items and see what is most important for the SU readers as well as the perception of the US / Europe / ROW buyers. Then we could have a ranking of the importance of these items and virtually kill these discussions in the future.
Rant warning.
I thought the discounts would only apply to MY10 9-5s (without sunroof)?
What is better business policy, put money into product improvement/marketing or go head to head with GM that ”can” produce cars at a loss as the tax payer -unwillingly- comes the rescue after they’ve done it long enough?
The independent Saab went south in the late 80’s thanks to lack of profit to develop their products. Don’t do the same mistake again, please!
Just put the correct asking price and market/make a superior product. The world can easily absorb 150k true premium Saabs a years (interior and hp range *cough*). If people think it costs too much, the product/customer experience is either not up to par or the marketing has screwed things up.
I’d rather see zero Saabs sold at a loss than have good sales numbers. Of course it’s a balancing act as the loss per car is far greater until they’ve reached the break even point. You don’t want to have workers doing nothing, but fortunately the US volume is so small that it won’t fail Saab on its own.
Basically there are two alternatives. 1) build cars cheaper (lower quality) or 2) build them superior (on par or better than the competition). I’d go for the latter.
I really think Saab can handle the Germans. Just look at all the engineering their capable of on the e-AAM and TTiD. Advertise the he** out of XWD in Canada for example.
If only smart Saabers buying after hefty discounts is the customer group I’d simply stop feeding them candy and start looking elsewhere. Let the bargain hunters buy the CPO cars in a few years time. Sorry if I’ve offended anyone, it’s not your fault SCNA is selling you a ‘Swedish Audi’ for the price of a Buick.
Even BMW’s profit margin is ‘only’ 8,2% (Q3 2010), so a 15% Saab discounts must come to a halt immediately, or apply only to cars that have no options and are sitting in the port collecting dust. After that I’d fire the guy that ordered those (unless he’s already gone?).
If nobody buys them new, there will be no CPO cars in a few years time.
Until there’s a bigger market presence and people see these cars on the road, only the Saab faithful will buy this car. Unfortunately, the Saab faithful have been trained to expect huge discounts. Also, do you seriously believe that ~$50K for a loaded Turbo4 Premium is a reasonable price? I think it’s kind of high… if it had an Audi quality interior and a little more oomph, perhaps… but it doesn’t.
Don’t get me wrong… it’s at the top of my list right now, but only if I can get a big discount to offset my perceived financial risk of buying a car from a company that may not be here in a few years.
Ref RS comments above…
As one of the persons who bought a “Swedish Audi” for the price of a Buick while I agree that Saab can’t lose money selling new cars forever the problem now is there are very few new Saabs on the road. If people don’t see Saabs the doesn’t exist!
My new 9-3 is doing 130 miles a day in Fairfax County (the richest county in the US) and that is great advertising. I had never seen a new 9-5 in the “wild” until I went to JMK to pick up my car. Get new cars out there and they will sell themselves.
I completely agree. I’m on the fence right now with respect to buying a new 9-5, but if it were not for the large discounts, I would not even consider it. Buying a 9-5 is big risk – what happens if Saab doesn’t make it, and they fold after their 3 yr business play runs out? There goes any resale value so I’m stuck with it (and the plastic wood interior) until it dies. No way I’m going to drop ~$50K… ~$40K maybe… for $35K, it’s a tremendous value and I’d jump – I don’t see a problem subsidizing early adopters. People need to see this car on the road. It’s a beautiful car, and it might help with the “what if they don’t make it?” Clearly, this is not a successful long term strategy, but they’ve got to get some of these beauties out on the street… and it’s not going to happen at $50K. There are too many financially safer cars out there at this price point (that aren’t suffering with GM engines – the Buick forums are not in love with the 2.0 turbo… I even saw a comment in the press somewhere from somebody in the GM engine team that it still “needs work”).
Leasing is probably the answer to the risk question… but leasing doesn’t work for me at this point in my life. I’m also a huge Saab fan (3 9-5s and a 9-3)… so if I’m having trouble swallowing +$40K for the 2011 9-5, I can’t see a non-Saaby ever going for this (unless there’s some momentum established).
Larry and Stan I’m glad you replied. I mean this whole thing with the adopted (GM) discount policy is very very important for SCNA (Saab Automobile) to get corrected now at the beginning of a new era.
I have no doubt Saab will be around in one form an other for as long as we drive cars. To say you’re only going to buy their product if I get it 20% cheaper is what WILL fail any car company and destroy the products residual.
I’d rater take a sale of 100 units/month in NA with 5K profit than a 10.000 unit sales with zero profit and all the warranty liabilities. Or even worse, a loss on every car I sell.
To put cars out on the road by discounting them heavily is questionable marketing to me. Sure it will add awareness but what does it tell the public in the end? There goes an other of those heavily discounted Saabs, I wonder are they going to stay around long or what their going to be worth in a few year…? This is a self-fulfilling prophesy.
What SCNA should do is use phenomenal marketing to attract those who are sick of all the Audis to go for a Saab, which is as good or in many ways better as the German makes as we all know here (especially in the Northern states). If you want to stand out as different in the US its head and shoulders above the competition but I don’t think anyone wants to be recognized as the owner of a ”cheap” (lesser) European brand in the end.
If you don’t believe me drive a 535i for a couple of weeks and then do the same with the 9-5 Aero. Nobody’s saying Saab wouldn’t drive like 50$k car, which is all that matters. If $50k is too much, take the $40k 9-5. If that’s too much, then you need to start looking at a 9-3 or a CPO 9-5. If you don’t like that deal you simply need to change brand. How many Saabers would actually do that?
If only a small number of new cars are sold the second hand value will increase immediately, as people will be in line waiting for a $30-35k CPO 9-5. Now there is no second hand demand because people can always buy a new Saab thanks to the darn discounts. Why don’t the German cars have this problem with huge sales volumes?!
Saab and the American Dealers won’t ever reach the image and sales of A and B have if they don’t believe their product is worth the same as the competitions.
I could make a small bet that if Saab had a flagship 9-5 in the US (with the hp/engine and fit & finish) with some excellent marketing they’d have no trouble selling a lot of Turbo4’s for $40.000 and Turbo6’s for $50.000. It’s all about the image game.
We’re going to pay $70.000 for a base diesel 9-5SC and it will be worth every penny.
I mostly agree with you, and I truly hope that Saab can get to this some day (because if it doesn’t, there will be no Saab. I do “get it”, Saab cannot sell cars at a loss and survive)…. BUT, today, Saab doesn’t have “a flagship 9-5 in the US (with the hp/engine and fit & finish) with some excellent marketing.”
I almost had my wife sold on the 9-5 until we sat in a Lexus (similarly equipped, MSRP about ~$7K less than Saab). She’s said “how come the Saab can’t have a nice interior like this?”. Yes, I know the Saab does many things better than the Lexus, but how about some real wood or aluminum? Now, I explain to wife that Saab is basically playing the cards it was given… it was designed for GM so it uses GM parts and you can’t change these things overnight and eventually, the interior should get better… and she says “but that doesn’t do anything for us right now” to which I must agree… Until the interior gets better, then what?
This is “then what” for me… if I cannot get $5-7K off MSRP on a 9-5 Turbo4 Premium (the 2010 is no go because sunroof is a must have), then I’m not buying one. This is not because I think I’m entitled to a large discount. It is because without a large discount, it is just too expensive for what you get (great seats, nice handling, beautiful styling, but weak engine and interior). I may buy a used 9-5 which doesn’t really help Saab right now. Or, I might buy another brand, and if this other car works out, I may never buy another Saab. If I understand what you’re saying, you’re ok with me leaving… better to not sell, then to sell at a loss… I’ll be easily replaced by the herd that storms the showrooms once Saab has a “flagship” and some “excellent marketing”… although this is still at least a year away… and, today, it hurts the brand more to have high “cost of sale” stats on the internet, but some cars actually seen in the wild vs. profitable sales stats on the internet but, very few sold, very few seen. Keeping in mind that they’re not selling many even with large incentives… so, chances are, they will sell even less without the incentives.
Stan
Saab listening? I had to set you up a bit with the flagship thing to make a case that Saab is going to need one in the future to truly compete with the Germans (‘some’ think so here on SU). Maybe that’s what Saab is up to? I don’t know -haven’t heard anything- but sure hope so.
I’m also hoping they’re taking the interior material ‘quality’ seriously as it’s affecting US sales probably more than anything. With Hirsch the four banger is not weak, but the specs should show up on the SaabUSA page for comparison. A separate higher quality (Aero) option interior could be a good idea?
Before all this happens Saab just has to go about their business of selling the Turbo4 and 6 with pride of their product (like they had all the engines in the world). I don’t see BMW discounting their base models just because people ”demand” lower prices (528i starting at $45k). $39k for a new 9-5 is imho competitive considering all the positives. Interior fit and finish isn’t everything and you get the electric leather seats ‘for free’ over there I might add.
I think you misunderstood me. I do not want anyone to leave the brand, but if you can’t justify yourself (or the wife) a new 9-5 for the asking price at this point, the best thing for Saab now -and in the future- would be for fans to pick up a CPO. That way the normal sales cycle and second hand pricing would get slowly started (again).
I also really don’t believe dumping discounted Saabs on the street helps sales in the long run. Just the opposite, as it destroys value of the brand on so many levels.
Not sure if I agree with this “halo car” business, but this wasn’t the main point of your comments so I didn’t comment. I’m not so interested in “armchair marketing’… I’ll leave these decisions to those that get paid to make them, and just be glad it’s not me. I just thought I’d share my opinions (which, unlike marketing, I do know) as 4 time/12 yr Saab owner who is in the market for a new car in the next month or two, and has been wrestling with what to do.
To summarize, I’m almost ready to buy a new 9-5 – it is a very nice car – BUT I’m having a hard time pulling the trigger because a) I have not seen even 1 in the wild and b) I think the current offering should be a bit cheaper. Your suggestion to raise prices (i.e. drop incentives) doesn’t help me with either of these.
a) is important to me because I think the opinion that Saab will exist for as long as we drive cars is very optimistic, and maybe a bit naive. Competition is brutal, there is over-capacity everywhere, and the economic outlook is still dubious. If VM isn’t successful, I think Saab disappears. I don’t see BMW or Fiat or anyone else stepping up for another save. Seeing newer Saabs on the road helps me put down this fear. Seeing the same dealer stock week after week does not. You seem more confident in Saab’s longevity so maybe you don’t see it this way.
For b), yes, I’m considering a CPO, but I’m really not seeing any in my area. The Saab dealer that I’ve done business with for 12 years has just 1 used 9-5 listed. I assume there are not many late model 9-5s for sale because either they didn’t sell well after ’05 (in fact, I remember back in ’05 seeing my beloved 9-5 on a list of “top 10 worst selling cars”) or the dealers don’t think they can sell them… and I wouldn’t necessarily say that this lack of supply has boosted their price. Lack of supply can also equate to lack of interest.
Oh well, it’s been nice to chat and have my thoughts challenged. Cheers.