Saab Germany losses continue

Managing Director Mehling adjusts forecast for 2003 downward but has big hopes for the new 9-3 convertible

Bad Homburg. Saab hopes to increase its dealers' profitability to an average return on investment of 2 percent by the end of 2004.

This is one of the key aims of Ulrich Mehling, who has been the managing director of Saab Germany since August 1. A few days into his job, Mehling was surprised to discover that Saab's German dealers have an average return on investment of just above 0 percent.

Mehling said he hopes to increase the Swedish carmaker's German sales to 7,500 units in 2004. But he admitted he had to adjust his predecessor Johannes Cuerten's forecast for 2003 down from 6,600 to 6,000 units.

The main reasons are Germany's economic slowdown and Saab's decision not to sell to international car rental companies, Mehling said. He confirmed that Saab will continue to lose money in 2003.

Mehling has big hopes for the Saab 9-3 convertible, which will be available at German dealerships starting in September. The former Opel salesman hopes to sell 850 units of the new model in 2003 alone -- 700 originally were planned. In 2004, he hopes to sell 2,000 9-3 convertibles.

Mehling also wants to extend the Saab dealer network from the current 120 locations in Germany. Mehling said that by September there will be new dealerships in Heidelberg, Saarlouis, Schwerin, Neuss and Bietigheim near Stuttgart. By year end there will be a total of 10 new Saab locations, he added.

"By the end of 2004 the restructuring of the network will be finished," Mehling said. By that time there will be 150 locations.

According to Mehling, dealer contracts that comply with the new block exemption laws will be finalized by the beginning of September. The Saab dealer association is examining a draft of the proposed contract.