(originally aired September 22)
Any Saab North American turnaround would involve new leadership and new thinking.
First in a series of 4 articles covering Saab's; Products, Market Share, Revenue and Cost Structure.
1. Products:
9-5 (D.O.A.) Cancel the new 9-5 carline (including the estate/wagon) – consolidated gross profits on this carline is likely not sufficient to sustain $12,000 PNVR market support (exception to limited Russia and China sales). This car is a failed execution for the brand, has very limited appeal to current/former Saab owners and is way over-priced for a Buick LaCrosse. This action would demonstrate a serious commitment towards a new business approach (its ok to admit to mistakes and save money too).
9-4X (reposition – keep it simple – conquest Japanese - seek volumes – do it quickly) Re-position the new 9-4X – offer one variant for US sales:
* 3.0 Liter AWD (kill the 2.8 Liter Turbo)
* Aero Badge (with all Aero trim - exception to seating surfaces)
* Standard equip.: sunroof, Aero styled front end (w/fog lamps), 19" alloys and Bose system.
* Only option is NAV.
* Priced at $39,995
* Plan 1,200 units per month. If the price point of $39,995 can’t be achieved then abandon the 9-4X carline as well.
9-3 Sedan (depreciated cash cow – conquest Japanese – seek volumes - do it quickly) Continue through MY2013 – conquest and bridge carline - offer one variant for US sales:
* 2.0 Liter (auto or manual)
* Aero Badge (with all Aero trim - exception to seating surfaces)
* Standard equip.: sunroof, pwr seats, 17" alloys, rear spoiler, Aero trim, and fog lamps.
* Only option is NAV.
* AWD platform abandoned.
* Priced at $24,995
* Plan 2,000 per month.
Aggressively target owners of Honda Accord, Toyota Camry, and Nissan Altima with trade incentives. At the same time increase the warranty coverage to 6 years / 100,000 miles (similar to the older CPO warranty once offered – bumper to bumper).
Factory note: Forget silly 30 day money back guarantees - these are negative selling propositions (sales people spend more time promoting what happens if you don’t like the car.. rather than selling the product).
Current 9-3 Combi (discontinue) Feel good carline (with no following) needs to go.
Current 9-3 Convertible (discontinue) Historic transaction price (after market support) is $29,995 – rather than build a car you lose money on .. end it and place all engineering and design efforts on the new 3 Convertible - very quickly.
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New 3 Convertible (launch spring 2013) First launch as image car and prelude to the new 3 Sedan. Similar to what Saab did for MY2003 only the convertible is launched first. MSRP should not exceed $10,000 from the highest priced sedan (sub assembly type production volumes – 800 per month to start).
New 3 Sedan (launch January 2014 as MY2015) (Think retro 1985 Saab 99) This car must be a functional hatch back design - priced at $29,995 – with MPG of 35 – 40 MPG. Forget the Phoenix, forget attacking BMW or Audi. Moving people upscale from Honda, Nissan, Toyota, and domestic brands should be the goal. Small chips into their volumes and Saab can easily sell 50,000 units. The new 3 needs to be affordable, function, and durable - European price leader. AWD should not be in the program. Hybrid should be considered. Advanced technologies (features) should be abandoned. Quality fit, finish, and use of high touch, high quality feel is most important. Warranty period 6 years / 100,000 miles. The new 3 should be assembled in China, production savings would allow higher quality / efficient drive line components. After 6 months launch New 3 VIGGEN as a zero to 60 offer in time for spring orders.
New 1 Coupe (retro Saab 96) – I’ll leave this up to the profitable new organization (suicide doors are a must however). So is a diesel engine with 50+ MPG.
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So there you have it. Push volumes for price leading models for 2 years. Trim overall offerings, make it simple to communicate. Go after large volumes of customers and make Saab exciting and affordable till new models arrive. Position new products as price leading European offer - assembled in China.
Of course the above is created without consolidated financial statements, however I believe most (if not all) recommendations can be implemented. Likely typical in most major markets - exception toRussia and China where almost anything goes with volumes less than 1000 units per year.
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