MONTICELLO, NY â One couldnât blame inventory-starved dealer Len Schrader if he wipes his eyes and thinks the new â11 Saab 9-5 is a moving mirage as it shows its stuff on a race course during a preview here.
Schrader, the owner of a single-point Saab store, canât wait to start selling new vehicles again, beginning with the 9-5, arriving at dealerships this month.
The flagship car, redone after 13 years, is the first new vehicle from the iconic Swedish auto maker since a series of convulsive near-death experiences that began in 2008 and ended this year with the sale of the company.
Until that happened, Saab Automobile AB teetered on the brink, went into liquidation, closed the homeland factory in Trollhattan, put the automotive obit writers on alert and left Saab dealers wondering if they should hang black crepe rather than colorful showroom banners.
Saab entered bankruptcy in January of 2009 after its owner of nine years, the formerCorp., announced in December of 2008 that it was reviewing whether to sell or shutter the subsidiary. GM later went into Chapter 11 itself.
In June of 2009, Koenigsegg Group AB, a small exotic sports-car maker, agreed to buy Saab from GM. But when that deal fell through in late 2009, GM said it would kill the brand if it couldnât find a buyer by the end of 2009.
In November of 2009, Victor Muller, a Dutch businessman and CEO ofCars N.V., another small luxury sports-car maker, stepped in with a purchase agreement of $74 million for a car company some valued at about $1 billion. The Swedish government and European investment banks helped finance the deal.
In January, GM confirmed it has struck deal forto buy Saab. The sale was completed the next month.
âIt was very dramatic,â Jan Ake Jonsson, a 37-year Saab veteran and CEO under the new ownership, says of the series of fateful events. âIt was an invaluable experience I hope I never have to use again.â
The sale was consummated Feb. 23. At that point, the factory was empty, there were no materials with which to build cars and Saabâs global inventory was less than 5,000 units.
âWe got through the drought by selling used cars and service,â says Schrader, owner of Reinertsen Motors Inc., a 40-year Saab dealership in Denville, NJ.
He recalls the year of uncertainty and dramatic moments as Saabâs sob story played out.
âThere were some heartbreaking moments,â he tells Wardâs. âOn Nov. 24, I was in my office telling a customer how optimistic I was of Saabâs future despite recent events. Then my sales manager came in and said the Koenigsegg deal just fell through.
âBut I always thought Saab would survive because of its heart and heritage,â he says.âI donât think it would die under Darth Vader.â
After going about a year with no new product to sell, Dave Grundstrom finally is starting to replenish the new-car lot of his Saab dealership in San Diego.
âThe past is over, thank goodness,â says Grundstrom, the CEO of the Marvin K. Brown Auto Center, representing six brands.
He lost his Hummer franchise when GM dumped that brand. For a while, he worried about losing Saab. âBut it is coming back meaner and leaner, well, leaner anyway,â he says.
It was no small task to restart a major auto factory after a 7-week shutdown, âbut now the plant is up and running as it should be,â Jonsson says.
Currently, itâs building 250 cars a day and two models: the 9-3, Saabâs bread-and-butter midsize sedan, and the new top-of-the-line 9-5 flagship, developed under GM ownership and sharing global underpinnings with the Opel Insignia, Chevrolet Malibu and Buick LaCrosse.
âBut its ergonomics and suspension-system tuning are Swedish,â Schrader says. âAnd Saab powertrain engineers did a good job developing their own torque curve for the GM engine. Saab didnât sit back and let GM dictate.â
The top-line 9-5 Aero comes with a 2.8L V-6 turbo with 300 hp and 295 lb.-ft (399 Nm) of torque at 2,500 rpm. That model is priced at $49,990, more than Saabs typically have sold for.
Pricing has yet to be announced on an impending base model with a 2.0L turbo I-4, but it is expected to start under $40,000.
âA lot of people ask, âCan Saab sell a $50,000 car?ââ says Schrader. âI think so, because Saab buyers are affluent and want value for their money.â
The stereotypical Saab owner had been a pipe-smoking professor wearing a tweed coat with elbow patches. As Saab attempts to nudge its 9-5 up one level from premium to luxury status, it is targeting college-educated âprogressives,â people of means and with children.
âThose are the people interested in this small Swedish brand,â says Magnus Hansson, Saabâs manager-global product.
He says the 9-5 is going up against other Euro-brand competitors, including Audi,and Mercedes-Benz. But a Mercedes executive dismissively tells Wardâs, âWe donât consider Saab a competitor.â
Compared with major auto makers that produce millions of vehicles a year at factories around the world, Saab is a relatively minor player.
Still, to Muller, low-volume Spyker buying Saab is a case of âa small car company acquiring a big car company.â It is sort of like a tailor buying a major clothing chain.
Can something like that work in the complicated automotive world? And can Saab recover after sales dropped 60% during the stretch of uncertainty and general global recession?
Yes, says Robert Elder, president of the Elder Automotive Group, a multi-franchise dealership organization. Its Michigan and Florida holdings include three Saab stores.
âVictor has a passion and a refuse-to-lose attitude,â Elder says. âHe is an amazing person. You have to know Victor Muller if you are considering whether Saab has a future. It does.â
Elder knew Muller before he bought Saab. Elder operates a Spyker outlet from within a Jaguar store in Tampa. He started selling Spyker after a customer asked to buy one two years ago. So far, heâs sold six, a sales performance indicative of the brandâs exclusivity, low demand or both.
Mullerâs business plan is to downsize Saab and sell 120,000 units a year even though the factory is capable of producing 190,000. It is a thoroughly modern plant. Muller thanks GM for that.
âA lot of bad things have been said about GM regarding its Saab ownership,â he says. âI happen to disagree with a lot of the criticism. GM left us with a manufacturing facility that is one of the most efficient in Europe.â
Part of Mullerâs Saab strategy is to both sell and buy auto technology.
âThis is the age of shared technology,â he says. âEverything is for sale, meaning you can have your core competency, but you donât have to develop everything from scratch. You wonât see a lot of automotive mergers, but you will see a lot of technology sharing.â
Released of GM ownership, Saab is now free to buy whatever technology it wants from whomever it wants, Muller says. âWe will work with partners we want to work with.â
He adds: âWe will probably never develop our own engines. Weâll buy those. But weâll tune them as Saab engines.â
He anticipates Saab as a seller will provide technology centering on safety and the environment.
Future products include a cross/utility vehicle, a hybrid-electric vehicle, a redone 9-3 and an all-new small car. âExpanding to the small-car segment is vital for us,â Hansson says.
âThis business is all about product,â says Mike Colleran, president of Saab North America Inc.
The U.S. remains Saabâs biggest market, accounting for up to 25% of sales. There are 202 American dealers.
âI said when we made our offer for Saab that weâd take every U.S. dealer,â Muller says. âThat was a key to the solution.â
By the end of the year, 15 to 20 Saab dealers will start selling Spyker models, too, including the upcoming $235,000 C8 Airelon. Spykerâs U.S. outlets currently stand at 15.
Allied Financial, the bank that morphed from GMAC, will provide financing to Saab dealers and customers, Colleran says.
An important aspect of the financial-services arrangement is that Saab is leasing cars again. When the credit freeze hit in 2008, GM largely abandoned leasing.
âRe-establishing leasing is significant to us,â Colleran says. âWe were out of it for 18 months, even though we had a lease penetration of about 50%.â
The 9-5 performs admirably, both flat out on the race track here and more politely on the public roads outside this town two hours north of New York City.
The 2.8L turbo is responsive and powerful, considering its relatively small size. Three suspension settings include a sporty mode that shows off the carâs impressive agility, considering its relatively large size.
In a way, the new 9-5 is a metaphor for the tough little car company that builds it.
âSaab is alive and kicking,â Muller says. âItâs a true miracle it has overcome all this adversity.â