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Saab making steady return to health: CEO

AFP/The Local · 13 May 2010, 09:31

Published: 13 May 2010 09:31 GMT+02:00

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The newly reorganized Saab is steadily reducing its breakeven point and has more than enough cash to survive as it begins to rebuild sales, its chief executive officer said on Tuesday.

After a near-liquidation by former parent General Motors, Saab must rebuild its sales from scratch and is focused on restructuring its operations, said Jonsson.

"We had been closed down for seven weeks," he told reporters in Detroit.

"We couldn't order any material or do any advertising because we were in liquidation," he said. "Now we have about 4,500 cars in inventory. We're completely focused on getting our products out as quickly as possible."

The company is currently living on reserves, including loans from the European banks and a $200 million technology deal with Beijing Auto.

But Jonsson said the storied Swedish brand should be able to break even in the second half of 2011.

While Jonsson hopes to reduce operating costs to the point where Saab can break even with annual sales of 80,000 to 85,000 vehicles, he said its potential sales are significantly higher.

Jonsson is confident Saab could sell as many as 125,000 units annually "at which point we would be quite profitable."

"These are very conservative estimates," he said, noting that Saab had sold 98,000 cars in 2008 when it was still owned by GM.

In the United States, which is Saab's single largest market, Saab has reached several key objectives since its February 23 purchase by Dutch sports car maker Spyker, noted Michael Colleran, president and chief operating officer of Saab Cars North America.

SAAB USA has built a staff, re-filled the pipeline to its 207 dealers and signed an agreement with what was then GMAC but is now Ally Bank, which is providing financing to Saab dealers and customers.

Saab is now in a position where it can offer lease deals to potential customers, Colleran said. In addition, Saab North America is launching its first sales promotion and is preparing a broad advertising campaign that will utilize print, online and social media.

The automaker's US dealers have increased their orders for new vehicles, which is a sign of confidence in the new company and its plans for the future, Colleran said.

Saab also plans to resume selling cars in Canada in August, Colleran said.

It expects to have the 2011 Saab 9-5 on sale in the United States by July and will slowly expand with other vehicles already in its product pipeline as it restarts its business around the world.

"We'll have an all new product line by 2012 and the 9-5 will be the oldest vehicle," Jonsson said.

Saab has also developed a wagon version of the 9-5, which is due out next year, as well as a 9-4X crossover sport utility vehicle, which is being built for Saab by General Motors, Jonsson said.

In addition, Saab is also working on an all-new version of the Saab 9-3 for 2012.

The styling for the 9-3 hasn't been frozen yet but it will be more sporty and aggressive than the current sedan model.

Story continues below…

"Think aircraft," said Victor Muller, CEO of Spyker Cars, which owns Saab. Muller said Saab has to be more distinctive to set itself off from other manufacturers.

The new Saab is also interested in developing a new compact or subcompact car, although it's "not in the product plan yet," said Jonsson.

Several other companies have come forward with offers to share technology,

which Muller said is "one of the big cultural changes in this industry since the crisis."

Saab could wind up sharing a small car platform with another manufacturer, he suggested, though he declined to offer any specifics.

Saab also has ambitious plans to expand its presence in China, Brazil and Russia and eventually India.

"You could see the day when there are more Saab's sold in China than in the US," Jonsson said.

AFP/The Local (news@thelocal.se)

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Your comments about this article

16:58 May 13, 2010 by YankeeViking
So Long safe and quality built vehicles from Sweden, It was a nice run while it lasted.....

Good Luck to those in Trollhattan, but I think their future is in the hands of the Chinese, and I think we all know where production will eventually end up.

Hope I am wrong though.
18:01 May 13, 2010 by irishmark
Well, I was amongst the sceptics but it sounds like Saabs CEO has a solid plan. If they can reduce their break-even to 80,000 cars, develop a fresh model line-up and and get sales back up to at least 2008 levels then they should stand a fighting chance!

Good luck to them.
18:23 May 13, 2010 by Nemesis
This is good news.

It is good to read that SAAB is in production again.

@ YankeeViking

SAAB is not owned by the Chinese.
19:38 May 13, 2010 by DaisyCutter
@ YankeeViking

You are wrong though.

Why bother posting such ignorance...oh the answer's all in the name.
20:06 May 13, 2010 by YankeeViking
@ Nemesis, Yes, you are correct, it was the Other ex-Swedish Car company..... Just substitute, Russian mafia for Chinese then. skit det samma

@ Daisycutter, Thanks mate, and your name is an Awesome bomb as well ;-)
20:45 May 13, 2010 by Nemesis
@ YankeeViking

And that is different from the previous bunch of criminals how?

The previosu owners tried to run SAAB into the ground.

As for Volvo. Geely is actual a modern, very progessive, innovative and technologically competant company. If you don't believe me, go visit the Geely factory in China. They welcome visitors.
01:41 May 14, 2010 by YankeeViking
@ Nemesis.....Much, Much different. GM saved SAAB's arse from being a has been for quite a while, only time will tell if the Ruskies can save SAAB, I wish them luck, but doubt anything in the area of growing production in Sweden will take place in the near future......

I am sure they do welcome visitors at Geely ; however, until their Human Rights record improves I will take a pass on the offer, thanks.
02:27 May 14, 2010 by repat_xpat
It is too easy to claim that SAAB's troubles were because of bad management at GM. I hope the SAAB employees and leaders do not embrace this belief, as some in this blog do. The only real hope for SAAB is a change in work culture & ethic. Without this, nothing will save SAAB, no matter who their owners are. I wish them the best, but denying their role in SAAB's failure wont help them.

As for Geely and their open factories: Nemesis, you are ignorant of even the most basic global manufacturing processes. Geely has "show factories" where they invite the public to inspect what they do. Happy employees, clean, safe work spaces all put on for show. The actual factories are not open to the public and do not meet the manufacturing standards we are accustomed to in the west.
09:05 May 14, 2010 by spy
It is easy to claim that Saab's troubles were because of bad GM management, and for very good reason.... Just look at the madcap product planning over the last 20 years and GM's conduct during the recent sale of Saab where they ran down the very company they were trying to sell.
11:19 May 14, 2010 by John D.

GM tried sell Saturn, Saab, Hummer and Pontiac. They were not successful at selling at selling Saturn and Pontiac. They planned a time frame on which to sell these brands and if there were no buyers they would kill the brand, which is what happened to Pontiac and Saturn.

It is costly to hold on to a money losing brands during the restructuring process.

Saab was in trouble long before GM took over anyway. Why do you think they needed gm in the first place.

Sweden has no swedish car companies anymore and have nobody to blame but themselves. Sweden has failed with both Saab and Volvo.
04:09 May 16, 2010 by repat_xpat
Spy, your just an idiot. I guess after months of reading your stupidity, you have lowered me to your level (replacing intellectual arguments with stupid personal insults), now go play in traffic (to quote you).
18:39 May 16, 2010 by harrylatour
You lot are all arguing like kids for the last sweetie,,,,,and the sugar canes are all dead!! Gas is £1.30 Ltr now and will be even more soon,all the developing countries want their cars too,,,what don't you people understand about that FACT??!! The ONLY hope for any EU car production at all is for governments to get their arses in to gear and start with the infrastucture needed for large scale use of EVs,,,,you even have a head start in Sweden because a lot of parking areas have winter time power points already installed!!!! And it will create loads of jobs too,,,so why do people not see these things in front of their own eyes?
20:38 May 18, 2010 by spy

It sounds like you are heading towards a breakdown so I suggest you take a break and while you are at it perhaps you should ask someone clever to explain the difference between the words 'you're' and 'your'.
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