Prediction: Saab will not Die
Posted by: Kwame Owusu on 31 Dec 2009Filed under: Features, Saab, Top
For today, the last day of 2009 and of the decade, I’ll put on my physic hat and predict that Saab will not die, at least not this time around. Two reasons: 1) the Swedish automaker’s brand image and 2) its 2010 9-5 sedan.
Despite not being on the same level as BMW, Mercedes or Lexus, Saab’s brand image is still respectably good, even though it has taken a beating over the years. Sure enthusiasts may sometimes talk smack about its performance credentials given its performance-oriented aspirations, but to the average North American, Saab is a prestige product, so much so that most of them are unaware of its true owner, GM. Why the brand sells so few in North America is mainly attributable to insufficient marketing, and marketing was something cash-strapped GM couldn’t do a lot of.
Saab has strong consumer goodwill, and GM knows this. Toss in the upcoming 9-5 sedan and the future looks even more promising. The 2010 9-5 sedan is one of the classiest-looking cars in its class. And judging by the latest batch of GM’s offerings, it will undoubtedly be highly competitive in regards to both quality and performance. On lesser note is the Saab’s upcoming 9-4X CUV, lest we forget about it. The 9-4X doesn’t capture our hearts in the same way as the 9-5 does but it is nonetheless likely to be very competitive in its segment.
With its brand image still in respectable shape, Saab has the foundation needed to leverage the release of both the upcoming 9-5 sedan and 9-4X. The quality of both vehicles will only serve to enhance its image and help bring back its glory days. GM sees this potential and so does the bidders, especially Spyker. Terminating Saab will be painfully wasteful. This might explain why GM eventually dropped the deadline to find a suitable buyer and why there are still several bidders in the race.
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The new 9-5 is a big reason why many of us HOPE Saab won’t go the way of the dodo, but it takes somewhat of a leap of faith to use it as a reason for why they won’t shut down Saab.
The financial crisis implies that capital is not moving as freely now as two years ago. GM is owned by the US government (60%) and need to show they’re doing everything to regain profitabilty.
Thanks to GM accounting (making sure profits from the sale of Saab automobiles in the US goes directly to GM USA) Saab is presented as a perpetual loss-making outfit. Closing it down gives the taxpayers the impression that GM is doing something.
I sold my 9-3 recently, because I am moving to a different country. I have already talked to a dealer about the possibility of buying one of the 35 9-5s so far produced (because Jan Åke indicated they did not know what to do with these in case of a wind-down). I desperately want the 9-5 as my next car. Now.
But the Swedish government are not listening to reason. They do not want to help, because this conflicts with their particular political ideology. They have not noticed that other governments, including the american one, have bailed out their industry, due to the immense lack of capital in the world’s financial institutions. Capitalism essentially broke down (or corrected itself), and Sweden are poised to make sure they bite the bullet so that everyone else can prosper. A noble thought. Sort of. (or just plain madness)
What I am trying to say is that things can go horribly wrong next week. The world does not work the way it did two years ago. What you see now are a bunch of headless chickens running for cover, except the chickens happen to be most of the politicians we elected.
Wow, Rune, that was well written and I couldn’t agree with you more. I think Kwame is also right in that if taken alone, Saab, unlike tarnished brands like Pontiac, still has a lot going for it (including image). Killing off the brand will be a lot more painful and wasteful than it was to kill Pontiac. But, yea, finding the money to save it is a big issue.
Nice article. I agree that Saab does still have some prestige, however small it may be. I also agree with Rune — Money is needed. But I’m also optimistic that Saab will not die.
It seems that Saab is going to die. Word is on the street is that is already in the process of winding the company down, although it’s still looking for bidders. Could Kwame be wrong?
It is a pretty sweet looking care but I wonder if its enough to keep them a float. I am not sure who buys Sabbs. We do not see many in the states. I guess we will see if your predictions are right.
Carico, it’s not just the 9-5 that I’m counting on — Saab still has a decent brand image.
GM sure is taking its time with a decision. All those protests must be working.
I hope you know that GM has started winding down Saab.
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