General Motors‘ sale process for Saab has been long drawn out but there is some cheer today for the people at Saab and we wish them luck.
A word of caution: the ducks still all need to be in a row on the finance, the loan from the European Investment Bank and also on guarantees from the Swedish government. Koenigsegg, don’t forget, also had a ‘binding’ agreement with GM to buy Saab, only for it to unravel later on the financial details. Similarly, this deal awaits completion and that is not a formality.
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It would, however, seem a little churlish this morning to bang on about what might still scupper completion. Yesterday’s announcement is very significant and a big step in the direction of Saab having a future.
But that future is by no means assured. There is a lot of hard work ahead for the new company to do simply to get to first base.
Critics will say that new owner Spyker doesn’t know much about the volume car business, that Saab is ill-placed in the segments it is in, that the brand has been badly damaged in recent months and that it would be a hard battle for Saab even in a favourable market environment – which it isn’t.
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On the plus side, Spyker inherits the Saab management team and that’s a big asset that can counter fears over future management. They had a plan ready to go under Koenigsegg and know the business inside out. They will have well-developed views on what went wrong under GM.
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By GlobalDataA big question now is what the Spyker attitude to Saab’s future strategic direction is. I have spoken with CEO Victor Muller before and my impression is that he will have plenty of ideas of his own – and that’s no bad thing either. Getting the right mix of inputs to form a business model that can work is the challenge.
My guess is that there will have to be an urgent examination of the Saab company and resources, top to bottom, with a new set-up aligned to new marketing and manufacturing plans for the future. Like many other automotive businesses, Saab will probably have to be resized to be able to be profitable at lower volume. That will almost certainly mean job losses.
There will also have to be a marketing relaunch of some sort and the new 9-5 presents a massive opportunity. Saab needs to tell the world – and quickly – that it is far from broken.
Can Saab mix it with the German premium heavyweights? The new flagship model is a big plus. It’s been developed under GM and is ready to go; a kind of dowry.
Saab needs to carve out a profitable niche and give customers positive reasons to choose Saab over Mercedes or BMW – and not simply rely on the mavericks who don’t want to follow the herd. Positive brand values and heritage need to be highlighted, along with the product benefits. Trying to get to higher volume – towards 200,000 and above breakeven – out of Trollhattan never worked under GM; such a strategy is even more questionable in current market conditions.
If Saab can get through this year, walking not running, convincing people – customers, suppliers, employees – that it has really survived, that there is a credible plan, while also avoiding even a hint of financial difficulty, then it has a chance.
Dave Leggett
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