BOSTON – With demand dipping because the brand is in a transition period, Saab Automobile U.S.A. sales will finish the year shy of 35,000 units, General Manager Steve Shannon says.

Retail deliveries will be down about 5%, Shannon says. But fleet sales will near 1,500 units, buoying the total volume close to 35,000 vehicles. Saab sold 36,349 cars and trucks in the U.S. in 2006.

Shannon says General Motors Corp. expects Saab to be adversely affected by “industry headwinds in 2008.” Industry sales will run below trend next year, somewhere in the range of 16 million units, he says, forecasting Saab sales will do no better than equal this year’s volume.

The GM brand currently has only three models in its portfolio, the 9-3, 9-5 and 9-7X.

The new 9-3 launched in mid-October, too late to significantly boost volume for the year, says Shannon, on hand here for the New England International Auto Show.

“We still don’t have the number on the ground we’d like,” he says.

Also, ’07 models sold down in a very orderly way – too orderly for some dealers in the Northeast who ran out of inventory too early, he says. The few remaining ’07s carry $4,000-$5,000 incentives.

Starting price for the ’08 9-3 sport sedan with a 210-hp engine and 6-speed manual transmission is $28,385, including destination charge. The no-cost maintenance policy for three years is proving to be a big attraction for buyers, Saab says.

There are 240 Saab dealers, a number that doesn’t seem excessive to Shannon. About 80 dealers are exclusive. The remainder is split equally, half dualing with other GM brands and half with other European marques.

All-wheel-drive 9-3 models don’t arrive in the U.S. until second-half 2008 – bad news in the Northeast, Saab’s biggest market and where AWD is a favored option.

The AWD system is sourced from Haldex AB and offers pre-emptive engagement of the rear wheels to optimize traction. It also includes an active limited-slip rear differential that allows variable torque transfer between the rear wheels.

The 9-3 accounts for 70% of Saab’s demand, and Shannon expects that ratio to continue.

Showroom traffic should increase when the Turbo X goes on sale in early April, he says, although the car, which made its North American debut at the Boston show, is a limited-volume model. Saab will build only 2,000 units, with just 600 allocated to the U.S.

Some dealers already have taken deposits on the Turbo X but officially aren’t allowed to place those orders with the factory in Trollhattan, Sweden, until mid-December. The car will be available as a 4-door sport sedan or 5-door SportCombi model. Shannon forecasts the average transaction price will be about $45,000.

Shannon doesn’t foresee the brand’s product portfolio expanding dramatically near term. However, he says there will be two additional models coming – a small car and cross/utility vehicle.

The CUV is expected be built in North America and hit the market within two or three years. Shannon declines to say what platform will be used. Press reports indicate Saab’s CUV, likely to be called the 9-4, will share the same Theta Epsilon platform that underpins the new Saturn Vue and will spawn an upcoming CUV from Cadillac. The Cadillac model, to be called the BRX, reportedly is targeted to replace the Cadillac SRX in 2009.

The CUV likely will replace the Chevrolet TrailBlazer-based 9-7X SUV in the Saab portfolio.

The small car will come later and be positioned below the 9-3 in both size and price. “It’s something that will be very highly styled,” Shannon says. “It could be the most expressive Saab in a sporty vein, but functional.”

Saab’s U.S. chief says the small car probably will be built in Trollhattan, but he doesn’t confirm reports the model will launch in the 2008-2009 timeframe or that it will be based on GM’s Compact Vehicle (Delta) Architecture that underpins the Opel Astra.

Despite the high value of the Swedish crown, Shannon says Saab still could make a profit on the car here in the U.S.

That 4-model core portfolio will be adequate to take Saab into the next decade, Shannon says.