German business newspaper Handelsblatt has reported that GM’s premium brand Saab lost more than US$300 million in 2005.
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The Handelsblatt daily cited company sources saying Saab’s loss widened from nearly US$200 million in 2004. GM Europe maintains that the company does not break out earnings for individual brands and would not comment further on earnings before its quarterly earnings report on January 26.
It has been speculated in recent years that GM might sell its loss-making Saab brand, but the company has maintained that it is committed to the brand, citing planned new models.
More models are indeed planned and GM maintains that product expansion is part of Saab’s goal to boost worldwide annual sales nearly 50% to 200,000 units per annum by 2011. In 2005 the unit’s sales are estimated at around 135,000 units.
Saab had its highest sales volume ever in Europe and recorded increases in the United States and Canada. While Saab’s global sales were flat last year, the brand is in the midst of its most aggressive product expansion ever (though some may say that is not saying much).
New products recently added to the lineup include the 9-7X premium midsize SUV in North America (it’s a rebadged locally-built Chevrolet model) and the 9-3 SportCombi five-door wagon in North America and Europe. An updated 9-5 sedan and wagon also will be launched this year.
However, cost-cutting moves at Saab have proven controversial, with GM deciding last year that all next generation Epsilon vehicles (including the 9-3 and 9-5 saloons) will be made at Russeisheim, Germany, leaving Saab’s Trollhattan plant as a much lower volume maker of niche models towards the end of the decade.
