Posted by: David Welch on December 18, 2009
Not far from my childhood home in Syracuse, N.Y. lives a family I have always called the “Saab people.” I never knew them but for as long as I can remember, they had nothing but Saabs in the driveway. The last time I drove by, they still had an old Saab 9000 alongside a 9-3 and a 9-5. I’m sure those Swedish-engineering die-hards are lamenting the news from General Motors today that Saab will follow Pontiac, Saturn and Oldsmobile to the auto industry’s scrap heap.
The problem for Saab was that there were too few Saab people with that kind of loyalty. In the past month, GM had two bidders pull out of talks to buy the 72-year-old company, the latest being Spyker Cars NV of Holland, Bloomberg first reported today. Officially, GM and Spyker said that there were too many issues that couldn’t be resolved. But let’s face it, there wasn’t much of a business case for Saab.
The company’s sales fell 61% this year. Saab wouldn’t have sold 100,000 cars around the globe. In Europe, the competition for sporty premium cars from BMW, Mercedes, and a slew of others was too tough. Combine Swedish labor rates with the weak dollar, and Saab’s prices were higher than the brand could command from consumers. Selling cars to Americans was just a tough proposition. Saab sold just over 7,000 cars in the U.S. through November.
Another big problem, of course, is that GM didn’t feed the brand with enough products nor did it make an earnest attempt to market its cars. Saab was a niche brand for Northeastern college professors and other educated affluent types. Without a bigger lineup and a real advertising budget, growing beyond its core fans was never going to happen. One has to wonder what Saab could have been had GM not bought it. Maybe another parent could have given it a few more cars to sell.
It would have been tough for anyone. But the GM that owned Saab from 1990—when the auto giant bought its first 50% of of the company—until now didn’t have the means to support. GM probably didn’t have the product and brand smarts for most of that period to guide it either. So long, Saab. I know one family that will really miss you.