New U.S. Exec Sees Saab Sales Doubling This Year, Despite Production Stoppages

NEW YORK – Despite continuing production delays at its Trollhattan, Sweden, plant, Saab's new top U.S. executive predicts sales will double this year.

Tim Colbeck, who was hired as president of Saab USA barely a month ago, confidently tells Ward's at a press conference here the Swedish importer will double its U.S. sales this year.

Saab's U.S. deliveries totaled about 3,300 units during first five months, and Colbeck says 10,000 are “doable” for the year.

Victor Muller, CEO of Saab Automobile, earlier this year forecast 80,000 units globally, but since a 2-month production shutdown that ended May 30, Muller has not issued a new sales prediction.

After that 7-week stoppage, assembly of the 9-3 and 9-5 models resumed, but work was halted again this week because of “material shortages,” says Gunnar Brunius, purchasing and production director. “We saw a number of risks on the horizon, mostly concerned with the supply of materials.”

During the current production stoppage, the time will be used for staff training, he says.

Saab still is short of cash and its management is seeking a long-term solution to the problem. One scheme is to sell and lease back Saab property in Sweden. The auto maker also continues to negotiate with its suppliers.

“The situation changes from day to day, or even from hour to hour,” the company says. “It is, therefore, very difficult to make further predictions.”

GM-built Saab 9-4X to arrive at dealers at end of June.

Saab wants to make sure it doesn’t take delivery of more parts than necessary, so it has decided to scale back output while management attempts to fix the situation. “We are all working hard to get production running consistently again, and as soon as possible," Brunius says.

Though Saab’s finances were helped by two vehicle orders from Pang Da Automobile of China, liquidity problems remain. The Chinese car company has ordered 1,930 units worth E45 million ($65 million) in the last few months.

Colbeck, who retired early in May as senior vice president-sales at Subaru of America after a 25-year career to become Saab's North American chief on May 9, is encouraged about the Swedish auto maker’s future, noting it presently has the largest product portfolio in its history.

Saab’s model lineup includes the 9-3 sedan, convertible and Sport Combi and 9-5 sedan. The 9-5 Sport Combi will be introduced at the end of the summer.

The 9-4X cross/utility vehicle being built at General Motors’ Ramos, Mexico, plant will arrive at Saab's 199 U.S. dealers at the end of June. The base model will sticker for $33,800, while the up-trim Aero’s asking price will be $48,000. Colbeck forecasts the Aero will account for 20% of the CUV’s sales.

He expects the conventional model to have an average transaction price in the low $40,000s and the Aero to be close to sticker.

Saab dealers have taken about 900 advance orders for the 9-4. The CUV also will be sold in Europe later this year, but no decision has been made on distribution in China.

The 9-4X is a sister-vehicle to the Cadillac SRX, but with a more-attractive price point than the GM luxury model. The SRX ranked No.2 in sales through May in the luxury CUV segment.

Saab won’t get an all-new model until 2013, when the next-generation 9-3 debuts. The new car will be based on the PhoeniX concept platform, which debuted at this year’s Geneva auto show. It was created by Jason Castriota, Saab's chief designer who works out of his studio here.

The next 9-3 will be the first car to be equipped with IQon, a car communications platform using Google's Android operating system. A test fleet currently is on the road with a beta version. Saab claims the infotainment system will offer a wide range of applications, online services and multimedia functions.

IQon will interface with more than 500 signals from sensors in the vehicle, measuring speed, location and direction of travel; driver workload; yaw rate; steering wheel angle; engine speed and torque; interior and exterior temperatures; barometric pressure and even the sun’s position.

The system also will provide Internet connectivity for smartphones.

IQon will have an 8-in. (20-cm) touchscreen display on the instrument panel to please American customers who prefer that kind of system. However, voice-recognition also will be available because that’s what European car buyers prefer, the auto maker says.

At present, Saab dealers have some 2,000 units in inventory. That’s about a 3-month supply, Colbeck says. Only 20 of the auto maker’s retail outlets are exclusive dealers. However, only a score have abandoned the franchise since GM sold its interest in the Swedish company to electric-vehicle maker, Spyker Cars.

About 35% of Saab sales in the U.S. are in the northeast. Colbeck sees California, Texas, Colorado and Florida as major marketing opportunities and may open some new dealershlips in those states. But overall, he is satisfied with the size of the retail network for now.

Muller is in the process of selling his interests in Spyker to Russia’s Vladimir Antonov in order to focus on getting Saab back to financial stability. The deal is expected to become final in a month.

Saab has 3,800 employees in Sweden, including workers at the Trollhattan plant. The auto maker currently sources new vehicles only from the Trollhattan and Ramos facilities. GM is contractually obligated to keep supporting products it provided to Saab in the past.

Muller is concentrating on finding ways to restore the foundation of the Saab brand worldwide for the long run, rather than trying to ramp-up sales volume quickly.

Colbeck wants to do the same thing in the U.S., which remains Saab's biggest market.