This is a post that has been floating around inside my head for quite a while. Many people have suggestions what Saab should do to get back on track. Well, here is my take on things. It’s a bit about a strategy for brand positioning, a bit about model politics, pricing, qualities – and about how to carve the right niche for Saab to exist in.
Get yourself some snacks and a drink, this is a long one…
Brand positioning is in my opinion one of Saab’s biggest problems. There was a time when Saab was recognized as a technological leader, a car for those who wanted to stand out. Things like driver oriented design, safety and turbo engines were earmarked to Saab back then and made a good starting point for advertising. This has changed. Many manufacturers picked up the issue of safety, advertised the hell out of being ahead of technology and turbo engines have become the common cure for getting fuel consumption down.
In that development Saab got lost a bit. It may have been that GM tried to make it more mass compatible. It may have been that competitors picked up the things that Saab was standing for to solve their own problems (which shows that Saab did a good job). Most likely a bit of both and some additional other things, like looong life circles for models and a small model range. In the automotive circus it sometimes felt like Saab was too exhausted because it did not know who to chase first, effectively getting close to noone. Well, at least not in public perception.
So what went wrong? Since 1999 I leased six new Saabs and all of them were grest cars. The drove great, were reliable and (except iPod functionality) offered everything I would have asked for. I did not feel I paid too much for them either. But why did only few people go for those values?
One thing is that while Saab focussed on building a great car to drive in recent years many manufacturers moved on to putting lots of more or less useful assistance systems and huge entertainment centers into their cars. Power opening doors. A friend of mine has a trailor hook on his Audi, that is driven in and out electrically. Sigh. This is not for me. But I know that the general public and the motoring press likes those blings and bleeps and the manufacturers advertise the hell out of it.
Which leads me to the next point – the lack of advertising. Here in Germany, just like in most parts of the world, Saab has barely been visible in advertising. I know many people here are always asking for big media campaigns but face it: advertising costs such huge amounts of money that we won’t see a really big campaign by Saab anytime soon. There are some new ways of marketing e.g. on the internet but Saab did not really explore those until two years ago. This is surely a crucial point. Having the better product is not the gurantee to sell it. You still have to tell people.
The best product – that’s much about perception. While I never had too much to complain about the interior materials I recognize that many people feel that Saab is behind the competition when it comes to that field. They may be right and I think that Saab made the right step with the 9-3 Griffin where materials have improved. With the 9-5 – having the same steering wheel as the Insignia and a bunch of other GM models may not help to get a quality feel though this is just perception. But as that is how the customer works, something needs to be done.
Another thing is the view the press has on Saab. Though I can remember that the 9-3 convertible beat the 3-series convertible in a comparison test at german AMS back when it was released in the past years there have not been too much fair or even favourable comments about what Saab offered. May have something to do with the inherent behaviour of the predator “man” to always attack the in his view weakest member of a herd or with the focus on the bling and bleep the competition offered – I don’t know. Sure there have been some eligible critics, but too often I just can’t get it.
Those are my observations. You think I should talk about pricing. Ok, here we go. My view is that a new Saab has to have a certain price. Trying to get customers just over the price is for Dacia and Toyota. I’d advocate to have a affordable, lower equipped entry model on the 9-3 range, at least until there is a 9-2 (or whatever it may be called) to cover the market below. This may hurt but the truth is that Saab can’t be the car for everybody anymore given what kind of technical stuff people expect to be in it. It shall be reasonably priced but it will never be cheap. Given that we are looking to break even at a production of about 100k cars/year there has to be a certain profit on every car. That’s just inevitable.
Land Rover for example took that road. They ask the price they need. And they still sell cars and make good profit. Lowering prices is not the way to go for Saab. The best solution would be to offer opportunities to the customers to customize their cars as much as possible and charge them for that. I’m pretty sure that there are enough people out there willing to spend that extra buck. One first step could be to offer Hirsch parts installed from the factory. Should be possible to handle since those only had to be at the line in time just like from any other supplier. The more difficult things like special paint, leather and so on could be done some time in the future as that would most likely require some extra shop inside the factory.
If the price is at a certain level financing options get even more important. I Germany and as far as I know most of Europe the company car market is the key to sales. That requires leasing offers that can compete with other brands. The problem is that the big ones like VW and BMW have their own leasing/financing companies and can offer much lower rates. A big task for Saab will be to find the right partner, maybe even different ones for local markets, to stay competetive. Resale value is a big issue here. Saab may have to put some efforts into that. But it will be more useful to spend some money here than to sell the cars at 20% discount.
While I think that Saabs has a great line up with 9-3, 9-5 and 9-4x those pricing politics will increase the demand for a 9-1 or 9-2 as an affordable entry model. No need to have four body styles like the 1-series has but a variety of engines and equipment levels will make a good offer for almost everyone.
Expanding the model range even more may be difficult. As BMW recently released the new 3-series they said that one third of the overall cars they sell are of that model. If you count all model lines and body styles they have you end up at 18. If four of them make one third of the sales you can easily imagine how difficult it is to make some others profitable. So until Saab has either some spare money or easy access to a whole lot of off-the-shelf-parts (like Audi) it makes no sense to follow BMW and Audi in making cars for niches nobody has seen before.
Did I say Saab should not follow BMW and Audi in model politics? Let’s just extend that. Saab has to appear self confident enough to step away from making those comparisons themselves. The motoring press will make them anyway. But there is no need to chase anybody literally. Saab has its own strength and that is where the focus has to be. You can’t be a unique brand by trying to be like Audi. Step away Saab, go your own road. There are a lot of technologies like eXWD and iQon under development and will be seen in the next 9-3 in about one year from now. Most likely we will see a few more innovations. This should be reason enough for Saab to be confident enough and define their own niche where they want to be. Sporty but still practical and a true driver’s car. It won’t be everybody’s darling but with the sales numbers we’re aiming for it does not have to be. Be different. Be quirky.
Wait until the car is ready for production until you launch it, so that people can go and order it right away. Let the launch event take place at the Trollhättan market square. And offer test drives for those who are there, not just the press guys. Just make it a real event for customers, too. After all, they are those who will buy the cars.
While such things would surely make great news the best thing would be to stay out of the news most of the time. It needs a stability in the company and the ownership structure so that it is all about developing, manufacturing and producing cars again. We are facing three to five years that are needed to rebuild reputation and position the brand right. Saab needs investors and owners that understand the identitiy of the brand and are able and willing to carry that cost to lead it into the future.
The identity of the brand – indeed one of the most important issues for a small niche manufacturer is identity. You have to be able to feel the origin of the car. Look at Land Rover for example, it’s British, even though it is under Tata ownership. You can feel that once you get into it. I believe that a Saab is a Saab because it is made by people in Sweden. It represents how they feel, their relationship to their work. Talk about design. That special safety measures regarding moose incidents. The superior handling in bad weather conditions. Those are all values that are clearly related to Sweden and were evaluated because they were needed there. Saab would not be the same if they were developed and made somewhere else. And this is why I want that Saab. Even though I don’t live there I benefit from those values a lot. I would not want a Saab that is made anywhere else. There has to be a crear emphasis on this to make people to see and understand what is so special about that quirky car made in Sweden.