Saab hunts for growth

SAAB has a plan to return to the front of mind for sporting buyers of prestige and luxury cars. With a range of five body styles for the newly reintroduced Aero model, Saab feels it can adequately attack the masters of the sports luxury market. After a sales slip in 1999, Saab Australia began the year with a 10 per cent discount off the price of 9-5 models. This has led to more leads and more sales, according to a happier managing director of Saab Australia Mr Bob Maron. He says 9-5 orders garnered in the third week of January are the highest yet and he hopes that the interest in the brand will continue to be pumped for the rest of the year. Citing a sales target of 3000 for the year, down on the 1999 target of 3300 which fell short by 500 cars (blamed on a GST-inspired buyer's strike), Mr Maron says that with greater focus on customer satisfaction as well as a plan to introduce more satellite servicing outlets around the capital cities, Saab will better serve the needs of its customers in 2000 and beyond. Dealers have already been switched to a bonus program which is driven by rising customer satisfaction indices rather than simply by sales volumes. Mr Maron wants to see sales rise to 4000 within the short to medium term, an outcome shared by Mr Tony Landh, area manager for Saab in Asia Pacific. Mr Landh says the region should be good for 12,000 or more cars a year, including Japan, within a few years, given the revitalisation of several Asian markets all but killed off by the economic meltdown of the past two years. The figures might be small beer to the likes of BMW and Mercedes-Benz, but Mr Landh points out Saab only builds 130,000 cars a year at present, compared with BMW's 800,000 and Mercedes-Benz which is close to one million. Saab Australia may be able to extract greater economies of scale in the future by taking Cadillac under its wing, though no formal decision to return General Motor's premier brand to Australia with Saab has been taken. Mr Maron says Cadillac could make use of Saab Australia's facilities and possibly those of its dealers but he is still not sure that dual branding would be the way to proceed. However he believes dual branding Saab and Cadillac might be better for some dealers than multi-franchising with other non-GM brands. Cadillac may return in 2003 or 2004 with the Evoq sports convertible and V8-powered sedans. At present Holden is unlikely to host the Cadillac brand as it fears there is too much similarity between the American V8 offerings and its own up-market sedans. Back at Saab, Mr Maron is bullish about the company's projected performance for 2000, citing the new Aero range and the growing brand awareness created by an intensive advertising campaign over the past six months in television and newsprint. He cites improving customer satisfaction index figures, growing quality of build and strong-looking residual values for used cars as building blocks for the future. Growing the number of satellite servicing outlets means getting close to the customers they have, allowing for the fact that new car buyers are prepared to travel further to buy, but resent the distance when it is time to service their vehicles. Saab is edging towards a sportier mien with an all-turbo line-up and sporting Aero models filling mainstream places in the range. Mr Maron defends the 10 per cent discount on the 9-5 as a three per cent cut over and above the seven per cent price drop due on July 1 with the introduction of the GST.