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Monday, 11 March, 2002, 11:36 GMT
Saab steps up the pace
Saab 93-X
The Saab 93-X: A sign of things to come
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By Jorn Madslien
BBC News Online business reporter in Geneva
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Saab is about to undergo a major expansion programme that could transform the Swedish car maker into its US parent General Motors' premier brand in Europe.

A tough task, given the low awareness of the brand and its relatively weak image, said industry experts.

Indeed, "we had to change and have changed very much of the mentality" within the company, acknowledged chief executive Peter Augustsson in an interview with BBC News Online.

But at last, the fresh thinking is about to show results, Mr Augustsson insisted.

"We will introduce new cars basically every year.

"If you take a five-year perspective, that is basically as many cars as we have done in the last 50 years," he said.

Selling Saabs

Saab's new models will be sold via a significantly extended European distribution network.

This is set to be a battle against Mercedes Benz, BMW and Audi, rather than against car makers such as Ford and Nissan, Saab said.

So the expansion would include city centre dealerships in prestigious locations such as London's Piccadilly.

"We will in the coming two years set up 500 new dealerships around Europe," Saab's vice president of sales and marketing, Mikael Eliasson, told BBC News Online.

Industrial owner

The changes at Saab are facilitated by its inclusion in the GM stable of car companies.

Two years ago, its previous owner, the Swedish investment company Investor, sold its stake to GM, and Saab has not looked back since.

Re-inventing Saab is a costly affair, so "had we not had an Investor or a GM to support the company, we would have been bankrupt," Mr Augustsson said.

"But the difference between Investor and GM is that GM is an industrial and financial owner. Investor could only bring money to the table.

"We have access to all research and development within General Motors. The big company is spending more on R&D than what we're selling cars for every year, so there's a big source of technology that we have full access to."

Fresh engineering?

Industry observers have welcomed Saab's move to replace old models quicker, though some fear it will be merely a rebadging exercise rather than a fresh engineering approach.

Mr Augustsson denied that this would be the case, insisting that the Saab 93-X concept car, which made its European debut at the International Motor Show in Geneva, was an indication of things to come.

"Certainly, we are doing things together with other people within General Motors," he acknowledged.

But the new cars "are going to be very different cars seen from a customer viewpoint".

Beyond platform sharing

"The platforms today, or rather the systems and components, is not like it was in the past when you would say 'OK, here you have a physical platform and you share that, you build another body on it'," Mr Augustsson said.

Modern cars were instead put together from a set of building blocks.

"Basically, you have 10-15 different sub-systems where you can have a wider car, you can have a different wheel base, you can have different systems that you combine into your 'medley' for your customers."

Some of these building blocks that make up a whole car were even shared within the car industry as a whole.

"There's a lot of technology sharing between everybody these days," Mr Augustsson said.

Growth potential

Saab's largest model, the 95, already boasts a 10% share within its class, Mr Eliasson said.

Sales of Saabs in this segment would be boosted by introducing more diesel models, as well as through its joint development of new technologies for a replacement model with Fiat's Alfa Romeo.

Over time, the company could also move into the market for slightly larger cars.

"I think there's room for us to grow half a size upwards from the 95, maybe in the Sports Utility Vehicle market," said Mr Augustsson.

But it is in the segment for its smaller model where Saab expects to boost its share of the market.

"What we will grow by is by doing a much better job in the 9-3 part of the market, that is cars like BMW 3-series, Audi A4. In that part of the market we just have a 4% market share," said Mr Eliasson.

Eventually, Saab expects to sell 200,000-250,000 cars a year.

"And when we do that... we will be a very profitable company," said Mr Eliasson.

 WATCH/LISTEN
 ON THIS STORY
Peter Augustsson, Saab chief executive
"We will introduce new cars every year"
Mikael Eliasson, sales and marketing
"We will set up 500 new dealerships in Europe"
See also:

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Which? finds Land Rover 'hitch'
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