Swedish Meatballs: Saab and Volvo

These U.S.-owned Swedish marques are struggling to reinvent themselves in the quest for buyers

by Michael Frank

Here's a story that may ring a bell.

A couple of carmakers are having trouble selling their vehicles. Hobbled by high fuel prices and poor rebadge jobs, not to mention prices that are too high to compete with others from Europe and Japan, these brands are scrambling to make smaller, more efficient machines that buyers will actually pay for.

Hey, welcome to the party, Volvo and Saab! You're just in time for the I-told-you-so-a-thon!

Right. Anyone could have told these once-proud, sorta-Swedish marques (Saab is owned by General Motors; Ford is Volvo's overlord) that their futures weren't very rosy. At Saab, the fault may rest in GM's lap, not back in Trollhatten. General Motors (GM) hasn't let Saab do anything creative, let alone steer itself in any direction other than toward total irrelevancy, for a good decade.

Oh wait, I forgot those neato, totally unrelated-to-anything-Saab-makes-now "Born from Jets" ads. Yeah, besides that they have the 9-3 and 9-5 on ancient platforms, the 9-7x, which is a Chevy Trailblazer in doughy Swedish drag, and for a cigarette break there was the idiotic "Saabaru" packaging of the Subaru WRX, reskinned as a Saab, that was painful to look at, if not unpleasant to drive. We'll never know what Saab would have done for an encore to that car since GM's bad debts forced it to sell its minority stake in Subaru to cash-cow Toyota Motor (TM).

The Downside of Green

As for Volvo, the challenges are only now arriving, since until recently, this was the only brand in Ford Motor's (F) now-dead Premier Automotive Group that wasn't burning through cash faster than a lotto millionaire. (Jaguar and Land Rover have recently been sold to India's Tata Motors (TTM); Aston Martin was flogged a year earlier.) So, under the benign eye of Ford, the kids in Goteberg made huge design progress with the iconic-looking XC90 crossover and the more recent C30 coupe.

But like famously angst-ridden compatriot filmmaker Ingmar Bergman, Volvo fears sexy. So instead of continuing its slammed and ultra-turboed R-edition cars—which were sometimes brilliant and sometimes not, but always faster than hell—these are, for all intents and purposes, neutered and dead. The reason: Volvo is worried about fuel economy. Question: Isn't a wagon that can haul five and is reasonably fast still better on gas than a big-as-a-McMansion SUV? Doesn't Lexus sell screaming sedans and also frugal hybrids? Anyhow, the XC90 is also about to drive off into the sunset, because it isn't kind enough to Mother Earth.

But wait, there's another chapter. It's called What's Next.

For Saab, there's a sliver of hope. Just as Saturn has pinned its brand to German maker Opel (also under the GM umbrella), Saab, too, gets restyled versions of these competent, occasionally brilliant cars. Too bad the execution is going so slowly; the Astra-derived 9-1 will have to wait until 2010 and the ancient 9-5 doesn't get overhauled until 2009.

If Saab still has a pulse 18 months from now there will be a 9-4 crossover to compete with the likes of BMW's (BMWG) 9-3 SportCombi, which is the wagon iteration of the Opel Vectra, is at least for sale right now, and has a killer selling point—it's actually new.