Examining the Options

A major issue for a future owner of Saab will be if there are products available they can sell more or less right away. For sure, with the factory standing still for over a year now it will be tough: the supply chain has to be rebuilt, staff has to be rehired and (re)trained. The receivers say they kept the production line in shape but to make it ready will cost quite an amount of time and money. In the end it is close to starting from scratch.

Even more important would be the chance to earn a bit of money on existing models. While this would surely not make profit, it would at least generate income that reduces loss. Additionly, and maybe even more important it keeps Saab in the market and offer the remaining dealers something to sell.

For the factory this would mean they could restart with models they know. So they could relate to some experience, be it to re-establish the former suppliers or to integrate new ones. Should be much easier than ramping things up with something totally new. Any future model then would come into a running factory with a team that has already worked together for a while. Setting up the line, training the team and introducing a new model at the same time might be too ambitious, regardless of a new owner.

So let’s take a look at what is there and if it could work. For a start there is a model that is a source for very contoversial discussions, even within the SU team: the 9-3. It’s the oldest model in the recent lineup with already almost ten years in the market. So it may be the toughest one to sell while looking at its core, it is still a great car. Also important, to a degree it is the one that can be built without GM’s ok. It would not be magic to shift the 9-3 into an even more contemporary car as the base is still great.

Exterior-wise the Griffin update has made some pretty nice tweaks to a car that always had a great design. You don’t recognize it’s age. Maybe some LED lights would do something good to lift it in todays automotive circus but in general, what you need is there.

On to the interior. The Griffin also got several improvements here. Personally I would think it made sense to offer a leather package. This could include dashboard, trim and door handles like Hirsch offers it. Maybe it could even be standard on an Aero model to add the extra premium feel. One of the bigger obstacles here is that you’d need a proper entertainment system that supports USB connection of mobile devices. Still, I can imagine that you’d find something at a supplier that you can adapt for use in the 9-3.

The recent drivetrain setup with the TTiD and the 2.0 direct injection engines is the best that model ever had. Nice would be a 1.6T on the low end as an entry. With an estimated three years until a next 9-3 could come to market and maybe one year until production starts again this could be a reasonable timeframe for this effort. After all this would be more about showcasing some technology than making money from it. What I’d see as important is to make all petrol engines automatically BioPower to underline a core competence of Saab.

A definete step into the right direction would be the combination of TTiD and XWD that never found its way into the 9-3 because the development would have been too expensive. So even under a new owner it may be too much effort on a car that will just be there for another two years or so.

Having said that the 9-3 Griffin always suffered from the fact that it was talked dead in the Spyker era. Especially Victor talked too much about the next 9-3 so a number of potential customers decided to wait for a car that wasn’t even in reach. Just another thing I did not understand. The other setback is that especially since bankrupcy the 9-3 has been sold with heavy discounts in some areas.

So to be able to sell that final edition you’d have to choose one of two ways to go. Either you set the price extremely low or add more value. I know there is a demand for a Saab in the Euro 20k price range but I believe this place has to be filled by a future 9-1. It is dangerous to set the price of the 9-3 too low because Saab would have a hard tome to price a next 9-3 in the range they need. Personally I think when the Griffin came around pricing was finally on a proper level.

In my view that level should already have come with the restart but the top management failed to see the demand of the market to offer more for less. In the end this reflects a problem in this “premium” definition that was all around back then in combination with an overly hurried production restart. The Griffin corrected this and where it hit the market it sold well.

So it’s up to adding some value. For quite a while I advocated to make some typical Saab features standard items on all cars, such as heated seats and headlamp washers. USB and bluetooth connectivity have to be standard and preferebly there should be no more green radio display. Just small things that change the general perception.

To reduce costs of course it could help to make the model range a bit slimmer. Just stick with two equipment lines as before and throw out some options that are rarely ever chosen. Reduce the selection of rims. Make it just five colors but don’t make them just shades of grey. Rather white, black, silver and two strong colors like red and blue. To go even further, I’d skip the SportCombi and stick to the Sedan, Convertible and 9-3x. It’s not such a huge difference between Combi and x anyway, you’d just have to offer both trim lines on the x. At least for those two years until the next generation is ready this has to be enough.

The convertible is important because it is a seller. For the Sedan – if you try to aim at Asian markets like India or China you definetely need this model as people there are very fond of this body style.

I am pretty aware that for all that comes now GM’s approval is needed and that just recently James Cain renewed his statement that there will be no licenses for a future owner of Saab. But as before, I do not give too much on this statement. A main thing at the moment is that as long as there is no decision on a buyer there is noone for them to talk to. As long as there is still a Chinese bidder we don’t have to expect them to be too open. The invisible arm of SAIC will not allow any negotiation in that direction.

Mahindra on the other hand could offer some value that goes beyond just cash. India is kind of terra incognita for GM. All they do there is build and sell a few old Daewoo models at a rather devastating market share. So GM should be open for anyone who can offer some assistance for them to get a foot on the ground there. Many options could be thinkable but in any way this would be an entry point for negotiations.

Keeping that in mind, let’s proceed to the 9-5. On one hand it is just too big for Europe, fairly expensive and very GM. On the other hand it is despite it’s size very handy, a blast to drive and looking at the prices of for example Audi and BMW not out of range. Sure, there are a lot of GM parts in it but I don’t really mind which supplier delivers them.

A major reason that the 9-5 could not explore it’s full sales potential was that the SportCombi never made it to the market. Judging from the buyers preferences it should have come at the same time as the Sedan as it would have accounted for some serious sales.

As with the 9-3 I’d get rid of the green display. Another point would be the dashboard. There has to be some supplier who is able to make something fancy, if not the ice block then at least something else that looks a bit nicer than that black plastic. Not that I did mind it too much but following comments there seems to be a demand for such a thing. Pimp it up with heated seats and some more nice features to give it even more value for the money.

On the outside for my taste especially the Aero should get more character, similar to what Hirsch did to their Performance version. Maybe it would even be possible to slightly adapt the bumpers and make it 4,99 m instead of 5,01 m. That would erase some psychological barrier in the head of potential buyers that consider the car to be too long.

While I am one of those who advocate that Saab should only use 4-cylinder engines as they are more saaby a V6 I am a bit torn about the Turbo6 version. It is so much fun to drive and makes sense in such a big car. On the other hand if it saves some money reduce the offerings to the diesel and the l4, which can run up to 260 hp in Hirsch trim already. Even more as I’d like to see all petrol Saabs to be BioPower. Another thing I’d see as important is that the TTiD gets the automatic gearbox as an option.

The last stop on this journey is maybe the most difficult one: the 9-4x. Most difficult because it is not built in Trollhรคttan and so changes to the car are rather difficult and require a lot of goodwill from GM. But as far as I can judge it from the planned German pricing situation with about 55k for a almost fully equipped Aero it had been very competetively priced.

After all, this car never really touched down in Europe but the experiences from the dealer tours here in Europe last fall made it clear that there is a demand for such a car, even if it lacks a diesel or a hybrid. Admittedly, I would be one of those who’d get one. I drove it last fall and it exceeded my expectations. Despite the GM stuff in it you can see that Peter Doerrich’s Saab team had a major influence in the development of the car.

Given the circumstances of production I think it would be too daring to look for other engine options. The Aero Turbo6 can be ramped up to 330 hp through Hirsch. Some time last year I talked to a dealer who asked for some version that should be somewhere between 350 and 400 hp to attract customers who may originally go for an X5 or Cayenne. I know there may be an option through some hardware modification. Could be worth to take a look at.

So we’re up to a proper portfolio for the restart, but there is another thing that is needed: proper financing for customers as well as for dealers. Many dealers out there have made little profit from Saab for over a year now, many have even lost money through bankrupcy. So to enable them to regain confidence and to get cars in stock they definetely need some proper financing partner, backed by the owner of Saab.
For the customers it has to be the same. While I still think it makes no sense to continue huge discounts I think Saab has to invest in getting better lease or finance rates than they had in the past. Given the uncertainty Saab faced since 2009 I believe this can only work with a financing partner that is directly tied to Saabs owner or at least backed by it. Only few financing companies may be willing to take the risk of financing Saabs so some strong effort is needed here.

You may see this picture I painted as wishful thinking but I strongly believe at least parts of this scenario can come true. It is mainly a matter of how much effort a bidder is willing to put in this. And those with a clear view and a vision of how Saab can explore its values will at least examine all possibilities. For each model it is about weighing pros and cons, about judging where to put the money one brings in. A lot of development work on future technology has to be done – and financed – too.

While we are eagerly waiting for an announcements things under the surface are very intense. It’s tough but I rather wait to see the final deal than being dissapointed by quick announcements that never bear fruit.

37 thoughts on “Examining the Options”

  1. I don’t think there is any real chance for Saab to build anything other than the 9-3. And if there was an option for any other model, I’d go for the 9-4X over the 9-5 simply for its market potential in non-European markets. The sedan market is saturated and filled with stalwart entries, while SUVs are still growing and enjoying premium over sedan/wagon offerings.

    I would go 9-3X only and market it as a SUV-like alternative to the DS4 or upper-end trims of the Nissan Qashqai (incidentally, Europe’s surprise top seller) or lower-end BMW X1s and the like. Fill it up with kit up to the brim, perhaps dropping options too expensive and/or making little sense.

    If possible, however, I believe replacing the previous stereo/navigation units with a single touch-screen one delivering both superb sound AND HDD-based navigation should be a priority. I believe there are enough suppliers to come up with a solution quite fast, the question is the speed and cost of technical integration into the Saab to eliminate any potential niggles.

    I don’t think trying to build 9-3 SportSedans and market them against the German Trinity would work in any way. It would only make the Saab look like a saver’s special, given the discounts they’d have to hand out to draw buyers to the showrooms again. It’s simply an old car and the press would be all over it. The 9-3X could at least be spun as a model “based upon” the 9-3 and only launched in 2009.

    The Convertible is obviously a lower-volume, but important given. Needless to say, all Saabs should be built as RHD and LHD, they were engineered for that, no need to throw the baby with the bathwater.

    Paint and wheel options don’t cost that much, but what does is unsold stock. For markets outside Europe, which should become more important for Saab given the European market’s situation, build-to-order makes no sense, so a limited number of spec options should be factory-built for every market. I would even consider one trim line for each body style.

    AFAIK, the 1.9 TTiD might have died with the Saab 9-3, which was the majority recipient of those (the only other was an elusive version of Lancia Delta), so a new deal would have to be negotiated regarding the supply of Diesel engines, and the car engineered to carry a new diesel engine + gearing optimized for minimum CO2 again. There is a long list of potential diesel motor suppliers, and all of the engines in the market are rather good, but I have to say the TTiD has a very strong advantage in terms of torque delivery accross the range. Without it, any Saab 9-3 restart would be severely handicapped.

    I drove the 1.6 Prince equipped Citroens and MINIs and they are very decent motors, though for Saab perhaps only the 200 THP version would make sense – it remains to be seen if BMW and PSA would be eager to create a viable competitor to their model lines by selling the 200 THP at a reasonable price (it’s probably no more expensive to manufacture than the base Prince, but BMW and PSA wouldn’t perhaps want Saab to undercut their top-of-the-line offerings selling the engine too cheap).

    And that’s just the start – we’ve heard of many suppliers dropping the towel and closing entire plants dedicated to supplying Saab only. This probably concerns many Saab-unique elements, such as dashboard and interior components. I don’t even know if Lear could start building Saab seats again (but if they could, as a side note, perhaps Saab folks could fit the former 9-5 seats with ventillation into the 9-3 ๐Ÿ˜€ ). All in all, even restarting the 9-3 might be a daunting task.

    • For markets outside Europe, you ought to have a sedan – in many markets people wouldn’t be seen dead in an estate even if it is a pseudo-offroader.

      • Which markets? In the US the Legacy Outback has been on fire for years, and the Forester is universally popular around the globe. Volvo cancelled the V70, but sells the XC70 with great success in many markets. This doesn’t seem to be a problem.

        I really don’t think despite the heated debate below that people who want a wagon would be put off by the fact that the model would be an “X”, and the people wanting an SUV would have too much of a problem that the car would be a wagon derivative, esp. if the wagon itself and the sedan would not exist anymore.

        The world pays a premium for “SUVs” at all latitudes and longitudes. It’s best not to disagree with the market.

        • Eastern Europe, Russia and Latin Amercia are kinda big on sedans, right? Other than that (and volume in those markets might not justify building a sedan), fully agree with your view.

          • you can add to the list the rest of Asia, but also European southern countries, in particular Spain, Greece, Portugal… I live in Switzerland where it’s almost impossible to see sedan versions of 9-5 or even Passat, Audi A4, BMW 3-er etc and I have only driven station wagons for years, but the fact that it is so in my country doesn’t mean the same for the rest of the world. Sedans also sell strongly in the US where normal station wagon is a rarity. On the other hand normal, plain, old fashioned station wagons sell strongly in most of Europe

  2. Thanks for this, Till. I think you make some good points. As the owner of a 2011 9-3 xwd I agree that there is plenty of life in it. Griffins never made it to North America, so what I have is just about the latest available here. I can see the desire for some interior improvements if you are really picky, but I mostly think it’s really nice. I have the parchment interior and the two tone is a very nice look. And the exterior is still among the nicest on the roads; although, the Volvo S 60 is starting to grow on me, particularly the rear. I am not at keen on the Volvo front.

    I agree with your suggestion that a relaunched Saab should begin by limiting their offerings, as a cost saving measure. I wonder if one of Saab’s limitations was its marketing approach. For years it only offered two main lines: 9-3 and 9-5 (but within those categories many options). But if you compare with Volvo, for example, three similar models to the 9-3 sedan, convertible, and SportCombi/9-3x would have three different names/numbering schemes. It’s so simple, but it gives the perception of Volvo having more offerings (which they do, but not as many more as it seems).

    I have highlighted before that GM was willing, in the past, to sell powertrains and the like to the proposed Chinese-owned Saab (after it refused to support the ownership structure by providing its IP licenses) so I would think it could be possible to negotiate that again to get the factory up and running, at least to build the various 9-3 models. I don’t know if the 9-5 and 9-4x would be possible. I do know everyone would prefer to go it alone without GM but I’d rather see Saab in operation again over a pure and entirely GM-free business, for the time being. That can and should come after we are back in business. I hope the delay in announcing a new ownership is related to working out possible agreements to get things rolling once more.

  3. I wouldn’t skip the combi (estate) model because it seems to be the most popular at least in Sweden and Finland (maybe also Norway?). If you consider the origin of the car brand, you just have to have that combi model within the model range.

    • Registered just to +1 this.

      The SC is a more sensible choice and personally I think SAAB should cultivate the quirky and sensible image they had before the dreaded GM era. SAAB was at the forefront of engine design with effective and efficient engines. They made cars that worked well in harsh winter weather without having to rely on AWD, they were practical and unique. I hope the buyer tries to hone this instead of trying to compete directly with the many German and Asian manufacturers. Make intelligent cars again!

      Plus, the 08+ 9-3 SC is possibly one of the best, if not the best, looking cars ever designed. I’m hoping to get my hands on an Aero in the near future.

    • +++ I agree. Besides the 9-3 Combi, without an x, is an even better design then the 9-3SS. Actually among the 2 best Combi-designs in its class (the other one being Alfa Romeo 159). The “hockey-stick” are significant on this model and you can “draw the whole car in one line” – like you could with the 99 and 900. This is – imo – a very great quality about Saab-design, that levers it up compared to most other cars which are just puzzles of components.

      • Combis (aka Estate Cars in the UK) are generally popular here, often better looking than saloons (sedans) and much more useful. The SAAB SC is a very common sight on British roads.

  4. I live in Norway, and personally I wouldn’t buy a 9-3x. A couple of days ago I actually bought my first Saab ever. I was going to buy a 9-5 SC, but after test driving a 9-3 SC I ended up buying the 9-3. In Norway a great part of the cars sold are wagons, and about 80% of the cars have a diesel engine.

    I would like to see some new Saab cars on the road in the near future, and I guess the only real option is the 9-3 in a upgraded/facelifted version. I will be really pleased if the NG 9-5 SC is put into production, but I guess it’s not going to happen. My plan is to keep my 9-3 until a new Saab 9-x (?) Sport Combi is available. I hope I can spend my hard earned money on a new Saab sometime in 2014-2016.

  5. 9-4x without a diesel is not worth an effort in many European markets – it could sell in some numbers in countries like Germany or Switzerland, but in the UK for example – no chance. But adding another engine option should not be way too difficult. GM has had experience in past with shipping European engines and other components to be installed in US built cars – the problem there was they were rubbish cars.

  6. I’d settle for them building a replacement for my key-fob. Let them start with spare parts. There are some things I can find in a junkyard, and others that are GM enough that I can go that route. But without a replacement key-fob, my SAAB is a brick waiting to happen.

    • Have you tried to purchase one recently? The techs on Saabnet report that new transponders are now available and their orders are being fulfilled. I believe Delphi (a GM spinoff) manufactures them.

  7. Thanks Till72 for the clear article.
    Still I just hope this saga is close to its conclusion … I have to say that I am getting a bit nervous …. any news on a possible closing day?

    • As for now every day could be closing day. But still details are to be discussed so I would not dare to make any prediction.

  8. In my opinion, to relaunch with a known model is not the worst idea.
    What else could that be than the most competitive SAAB model that was on the marked before shutdown – the convertible.

    I would make that available fully loaded with options and just one engine – a 4 cyl. turbo with flexifuel capabilities (Gas, Ethanol, LPG) – not more.

    This could be a product to grow with.

    For the next steps, I would go directly into the 9-X / 9-X Air design direction and offer eDrive with that model.

    Small steps, not many models but high quality, fine, innovative, premium priced niche models. SAABs!
    The market position would be sightly above Audi/BMW/Mercedes.
    In the near future “Bread an butter” cars will be put together in China / India and hopefully Germany – not possible for SAAB to compete with them.

  9. Editor, I’m not 100% sure what you’re referring to about the green lighting in the Saab – it is the 9-3 with the green stereo indications? Anyway, I have a 2005 9-5 and the backlight illumination at night is green and fantastic. I test drove an Audi A6 and didn’t buy because of the red backlighting. Call me fussy but when you’re putting that much money into a new car I don’t want anything to annoy me. I want to enjoy my driving ๐Ÿ™‚

  10. Till, I usually completely agree with what you write. So, please don’t come over to visit me at night if this time, I cannot concur ๐Ÿ˜‰ (for all others, we do not only more or less share the name Till/Thyl, but also live in the same town).

    Saab’s models have failed in the marketplace. Neither was the 9-3 II more or even as successful as the 900 II/9-3 I, with now dwindling numbers, nor was the 9-5 anything but an immediate failure.

    Since there is nothing wrong with the cars as such, it must be the overall strategy. Over at swadeology, I had mentioned that the switch of Saab from a Blue Ocean (that you pawn by unique selling points) strategy to a Red Ocean strategy (with a number of competitors with similar products) DID NOT WORK OUT.

    If the cars would be asked for, they would sell. Irrespective of price (come on, a couple of hundres bucks more or less), engine range or leather here or there. Re-Releasing the old, unwanted models would lead to the same results we had before.

    I really question that revenues would help. It might actually be better to keep the factory at stand-still, and to focus attention on new models that follow a Blue Ocean Strategy.

    THIS IS THE FIRST STEP: Find unique selling points that people (and foremost Saab customers) would want. Tradtionally, that were spacious (i.e. space efficient) cars, clean, timeless design, high functionality instead of gadgets etc. But will that work in a future that is dominated by high fuel prices, crowded, polluted cities, and a disparity among markets (in Europe, the younger generation is not so much interested in cars as a stauts symbol anymore, while in Asia, status appears very important)? I can’t tell.

    And why does it now take three years to finish the new 9-3? We were only about a year from production start, or so we were told.

    Provided that Mahindra buys Saab, why not hire another 3000 engineers in India for specific work, and get the next model out at the beginning of 2013?

    • Even the next 9-3 may not be different enough to fit in a Blue Ocean strategy. Even more if you rush it to the market. My point is more about what you can make of what is there but yeah, a general strategy change from what GM thought would work is to be done. Still, this takes some time.

  11. Well that โ€˜s a long piece about reviving a dead company.
    Tilll you are speaking as if Saab just past away, in fact it โ€˜s more
    than a year since production stopped.
    We as Saab fans don โ€˜t feel it like that but the general public has practiclly
    forgotten Saab.
    If Saab is to be revived, the new owner should start from scratch. No connections
    with the awful GM era is the best strategy then.
    It will cost a little more but pays out in the end.
    I have a strong feeling that the Saabsunited team is to close to the (old)
    factory (literally and figuratively) and therefore lacks a clear sight on what impact
    Saab has today.
    As you, I am very curious about what the new owner (if any) is going to do, but I hope
    it will restart production in Trollhattan with completely new model(s), whithout
    any GM genes, that are a true imagination of the so much discussed Saab formula.
    The other solution is that the old 9.3 is revived to be sold in the new markets
    mayby not even as a Saab and produced initially in Trollhattan and later over there.
    Maybe while new models are being developed for Saab.
    No GM Saabs evermore.

      • I have ’92 900 with 350K km and a 2002 9.5 estate with 320K km
        The 9.5 has cost me a fortune in maintenance i.e. new motor new gearbox new suspension bushings front and and rear and is still making noises, as well as the supposed waterlekeage
        that never can be diagnosed (pressurising) by the dealer. In fact my 9.5 is a crying shame for a Saab. Although I love it.
        The 900: never a problem apart from normal maitenance.

  12. I wonder a bit about this new possible buyer which has been discussed in Swedish media. not a word about that on SU…. I guess that may have impact on many levels.

  13. I loved the recent 9-5 (and even the 9-4) but for practical reasons, the 9-3 is the one that could be done. And in a way—-I actually think the 9-3 is closer to my vision for Saab’s future. No bloat—-and it’s more economical to buy, own and maintain than the others. The platform is very flexible—-a nice array of cars can be derived from it. It’s closer to what Saab started out as too. Yes, in time, they can still offer a flagship. But I think a 9-3 style car would be a good bread and butter, along with a smaller, entry level hatchback (4 doors) and in time, a larger car with more goodies.

  14. There is absolutely nothing wrong with the aesthetics of the current 9-3. What SAAB does not need to do is โ€˜trickโ€™ out the models. They need to push the design forward, not by copying other brands but by sticking to a minimalist modern aesthetic—-this is exactly what is lacking in the industry. I personally love the 2010 9-3 I own. All this talk of the model being dated, is not objective, it is a subjective statement based on it being known that the model has not been completely overhauled. But the aesthetic of the car is in many ways more modern than most of the new cars out there. If SAAB loses this minimalist modern aesthetic, then we lose SAAB entirely and there is no point left to the brand. They could use some more substantial materials in areas and essentially refine what is already being done, but if anything they need to be more extreme and avant garde.

    GREEN, I absolutely love the green. What other color do you suggest they use? This is one of the nicest features of the car, that all the lighting is the same color.

  15. Just before I read the new stuff about YM dropping out…

    Madness! Madness! Till this is a good article and I agree with most of what you say, but it would be insane to not make the 9-3 combi/wagon/estate any more. I personally own a saloon/sedan and I love it, but the 9-3 fullcombi is a Saab stalwart and very popular in a lot of markets.

    I want to love the 9-3X and it could be the ideal Saab for me … but until the monumentally stupid decision not to offer the diesel version with four-wheel-drive is reversed, I think that model is pretty pointless. Oh and the nose of the 9-3X could do with being made more elegant!

    Anyway, well done, carry on ๐Ÿ™‚

  16. I think before they decide on models they also need to increase the brand awareness. I get compliments on my car quite often followed by the question: What car is that? many people just don’t know Saab.
    Another problem are the dealers. Many Saab dealers are gone or have changed to other brands. I live in in the Dallas area. 4.5M population. Previously 3 large Saab dealers. Now: None within several 100 miles.
    As for the cars: I agree with the 9-3 combi. Although I am in the US and they don’t sell well here they are important for other markets. I am more concerned with the 9-3 in general. This is an outdated car by now. Basically 10 years old. Looking at the competition from Europe, Asia or the USA with more modern cars I am not sure many people will buy it. Plus lets be honest: The design of the 9-3 sedan is a bit boring compared to what other companies have come up with recently. I think only the 9-5 or the 9-4x could drive some sales. Especially here in the US. But only if people can be 100% sure that the next owner will not go out of business again. Security that warranty is covered, parts are available and that used cars are still sellable in a few years are very important purchasing criteria in the US.
    Not sure what a good recipe will be but it will be very difficult to start again for whoever maybe the new owner.

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