SWITZERLAND: Saab sees break-even in 2004
Saab aims to break even next year with the help of a job-cutting restructuring plan announced in November last year, the head of the Swedish car maker told Reuters at the Geneva motor show.
Saab chief Peter Augustsson told the news agency that the restructuring, which includes cutting 1,400 jobs, mostly in Sweden, will trim Saab's breakeven point to an annual vehicle sales level of 130,000 to 140,000 cars, which Saab should be able to hit next year.
According to Reuters, Saab sold about 120,000 vehicles last year, and its new 9-3 line, including a convertible unveiled this week at Geneva, will help boost sales over the next few years, Augustsson said.
"We should in a couple of years be in a profit," Augustsson told Reuters.
Reuters said that, with the new 9-3 sedan on the market, Saab recorded its strongest February ever in the US market. Augustsson told the news agency he expected worldwide sales to climb to 135,000 vehicles this year.
Reuters said that next year, the full impact of Saab's cost cuts will be realised. "From a cost side, we will be there next year," Augustsson said.
Reuters noted that, in addition to cutting 1,400 jobs, Saab is also eliminating costs by moving production of the 9-3 and the larger 9-5 car to the same assembly line and integrating engineering operations with GM Europe.
The losses expected for Saab this year are one reason why GM is expecting its European operations to break even or post another loss this year, GM officials told Reuters.
GM's Opel brand, also in the midst of a turnaround, still expects to break even toward the end of this year, Carl-Peter Forster, the head of the Germany-based car division, told Reuters.
According to Reuters, in February, Opel's market share in Germany, its biggest market, rose more than 1% from last year as sales climbed by around 10%, Forster said.
"It really depends on the German economy and the war scenario," Forster told Reuters at the auto show. "Germany is the big question mark. We would predict a flat market in Europe. Some others are more bearish."
Reuters noted that Forster said that incentive costs are rising as car makers battle for market share amid signs of a weakening market. "Always, at times of stress, your costs of sales go up," Forster said, according to Reuters.