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Auto Comebacks: What Kind of Shape Is Saab Really In?

Saab: It was bought by General Motors (GM) in the late 1990s, but GM destroyed its delicious Saab-ness in an effort to turn it into a BMW competitor, then used it to move rebadged Opels in the U.S. and elsewhere before finally selling it to Spyker, a Dutch supercar maker, after the 2009 GM bankruptcy. You could say the Swedish brand had been all but left for dead. But now there are tentative signs of a comeback.

As Autoblog noted last week, credit for much of this goes to departing CEO Jan Ake Jonsson:

Jonsson's true legacy with the company is his dogged determination to keep the automaker afloat through its tumultuous sale from General Motors. After fighting to keep the brand alive, Jonsson then went to work on reviving an aging product lineup.
Against all odds, it's beginning to look as if Saab might creep back toward profitability. In fact, if Saab gets just one or two things right over the next few years, it could create a new automotive category: the near-luxury niche carmaker.

"Rightsizing" a small automaker, but making big gains
Saab built a pretty modest number of vehicles in 2010: 32,048. But as Autoblog's Chris Shunk points out, that was significantly more than the 2009 tally of 20,905. Saab lost $197 million, but in the fourth quarter of 2010 it increased sales by a whopping 129%.

It was this last figure that caught my attention. Saab is now doing better than surviving -- its sales are beginning to thrive. And this is with its old product lineup, which essentially consists of three vehicles. If the company moves in the direction I think it will, toward a combination of mid-luxury and fuel-efficiency, it could actually retake chunks of its traditional marketing sweetspot in the U.S. Northeast.

Saab's production is so limited that it can very effectively manage the brand's major return to market. In some respects, I can see it filling the gap that has been left by GM's killing off of Saturn -- and satisfying irony, since Saabs and Saturns shared similar underpinnings when they both lived in GM's pre-bankruptcy brand family.

Should Saab make a big push in the United States?

Usually, I argue that fighting over market share in the U.S. is a waste of resources. Maybe Saab should focus instead in China or Russia, markets that it plans to enter. However, given the ever-changing market-share landscape in North America, Saab may have an historic opportunity to recapture many of the buyers it lost during the GM years.

Toyota (TM) and Honda are both weakening in the U.S., while GM and Ford (F) gain strength. There's an opening in the mid-luxury space, given that Lexus and Acura are both pitched at more affluent buyers and that Ford has put an end to Mercury. GM of course has Buick, but that's not a brand that people interesting in a BMW alternative will look at. So you can see where Saab fits in -- and it's exactly where GM wanted to put it ten years ago.

Unfortunately, GM didn't effectively run Saab as an independent brand. But Saab is now only Saab, and dedicated to maximizing that independence. Spyker has even gone so far as to...sell the Spyker part of the business to concentrate on being Saab and just Saab.

Finally, high gas prices favor Saab technology
Many automakers are looking for ways to extract V8 and V6 performance from smaller engines and turning to turbocharging as a solution. The goal is to preserve a high-horsepower driving experience in a era of potentially much steeper gas prices. Ford has even done this with its most important vehicle, the F-150 pickup truck. Saab has always done turbos and done them well, however. So even with its aging lineup, it's very well positioned to see continues sales increases as gas prices creep up this summer.

Saab may never really live large. But over the next couple of years, it may discover that it can can live quite well.


Photo: Wikimedia Commons
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