Bailout Blues: Can Saab be salvaged by going upmarket?

Compared to its luxury-sport rivals like BMW, Mercedes-Benz or Audi, Saabs have always felt a bit overpriced, right?

But according to a Swedish newspaper, that hasn’t been the problem at all. In fact, its new owners want to double the average selling price of a Saab by 2016.

As part of the super car maker Koenigsegg Group’s business plans to grab a 600 million Euro loan to takeover Saab from Government Motors, the goal is to establish Saab at the upper end of the market. Way up.

The plan calls for a break even financial situation by 2011 with global sales of 115,000. Then, by 2016, sales of only 65,000, but at twice the average price of what you pay for a Saab today.

How, pray tell?

Part of the plan is to have an all-electric 9-3 by 2012, as well as hybrid versions of the 9-3 and 9-5.

All for the low, low investment of 600 million Euros, I guess.

So, over to you….

Do you think the Saab brand can go up market?

Would you buy a 9-5 Koenigsegg Edition for close to twice the current car’s price, say, about $100,000?

[Source: Dagens Industri via TTAC]

Comments

[Randy]

$100,000 for a Saab?? Good luck with that!!

Moving upmarket is a BIG mistake IMO. Do cars cost that much to build in Sweden?

They'll never generate enough volume at those prices to be competitive. Heck they couldn't even generate enough volume in the last 5 years. Mind you that was with GM calling the shots with mediocre product (possibly the 9-3 excepted).

The reason I went out and bought a 9-5 Sportcombi a year ago was it had a sporting character, the room I needed and it cost tens of thousands LESS than a MB, Audi or BMW of similar size and power. I got this car at a substantial discount primarily because of its age in the market.

Would I pay more for a new Saab? Sure I would, but not twice. I'd pay more than what the current Saab's cost if they are similar size and performance to their German competitors and at the same time still cost less. They need to undercut the Germans until they can roll out truly unique and class leading cars.

They'll never get the kind of prices they want until they've got the product that people (a very FEW people) can justify. I won't be one of them. $100,000 is too rich for me. I suspect they'll be bankrupt before we see $100,000 Saab's.

Saab management should consider how the VW Phaeton did in the marketplace.

[Pete]

Short answer; No. Methinks one would require "disposable income" in order to purchase such vehicles, like the kind required to purchase a Koenigsegg. Then again, maybe there are enough people out there with more money than brains.

[Shahrukh Bakar]

It seems like a big gamble for sure. If Saab regains its status amongst the loyal followers, they will be appealing to a niche market that remembers what Saab used to stand for a long time ago. The product will have to be either genuinely innovative or particularly appealing to the diehards for it to gain traction in the market. Market perception being what it is, the image of cheap deals and cruddy Saabs of yesteryear will continue to haunt Saab's reputation.

[Michel]

Instead of trying to build so-call upscale cars... Saab should try to go back to its roots.

Building cars that are fun to drive, eventhough they can be somewhat quirky!

I used to be a die hard fan of the brand, when you got into one of their car you thought you were stepping into a odd-shape-fighter-plane... They were fun to drive, they had engines that could be worked, and they car letted you know what was happening.

In recent years, they tried to tame it, trying to please every body... not to mention that the inside of the cars feels like your uncle's Buick (nothing wrong with Buick, they are not just for me)

Ho well, the only upside with a $100,000 Saab... is that they'll soon be available on the used market for not much $ (Since SAAB are among the worst for re-sale value)

[Martin J Frid]

Might work in Japan, where SAAB still has a strong consumer base, who like the image of an intelligent car. The EV or hybrid SAAB would compete against Honda's Insight, the Prius and Lexus. Too bad GM didn't make that move five or ten years ago.

But are we still going to be buying into the mirage of the personal car in say, 3-4 years? I doubt it. SAAB should focus on mobility and work with taxi companies and rental companies, or help develop car sharing schemes. Then consumers in Asia may start paying attention again.