Newly reorganised Saab is steadily reducing its break-even point and has more than enough cash to survive as it begins to rebuild sales, its chief executive officer has said.
After near-liquidation by former ownwer General Motors, Saab must rebuild its sales from a start and is focused on restructuring its operations, president and CEO Jan Ake Jonsson told news agency AFP. “We had been closed down for seven weeks,” Jonsson told reporters in Detroit.
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“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 US$200m technology deal with Beijing Auto, according to AFP, though Jonsson said Saab should be able to break even in the second half of 2011.
He hopes to reduce operating costs to the point where Saab can break even with annual sales of 80,000 to 85,000 vehicles though 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.”
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By GlobalData“These are very conservative estimates,” he told AFP, 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 23 February purchase by Spyker, Saab Cars North America president Michael Colleran said.
The US unit has built up staff, re-stocked the supply pipeline to the 207 dealers and signed an agreement with Ally Bank (until last Monday GMAC) to finance 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 use 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 told AFP.
Saab also plans to resume selling cars in Canada in August, Colleran said. A new deal involving International Fleet Sales was also announced this week.
It expects to have the redesigned 2011 9-5 on sale in the US by July and will slowly expand with other vehicles already in the 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,” Jonnsson 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 a redesigned 9-3 for 2012.
The styling for that hasn’t been frozen yet but it will be more sporty and aggressive than the current sedan.
“Think aircraft,” said Mueller, who said Saab has to be more distinctive to set itself off from other manufacturers.
Early Saabs such as the 90-series of the 1950s and 60s showed off their aircraft making heritage with swoopy, aerodynamic styling.
The new Saab is also interested in developing a new compact or subcompact car, although it’s “not in the product plan yet,” Jonsson told AFP.
Several other companies have come forward with offers to share technology, which Mueller said is “one of the big cultural changes in this industry since the crisis.”
Saab could end 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 added.
