Some Saab dealers are feeling better about their future after meeting with company officials last week, but the cost could be substantial.
The company wants to cut its dealer ranks and persuade more dealers to open attractive, stand alone showrooms. But it still is uncertain who will bear the brunt of the cost of dealer buyouts and store remodelings.
Dealers also were shown the direction of the new fall ad campaign, and some will go to Sweden this week to meet with top Saab executives to talk about future products. 'They made it clear that they will help us' with finances, said Bill Martin, owner of Volvo-Saab of Charlotte in Charlotte, N.C., 'but the exact plan has not been worked out.'
Dealers say they will get more details of the plan between now and September, but some tentative proposals were outlined.
Saab wants dealers to invest between $10,000 and $20,000 to install new computer systems by February.
The cost of facility upgrades will vary, but the company talked about either loaning or giving dealers in large markets with exclusive stores $400,000 for remodeling fees. Dealers in smaller markets would get $50,000 to $60,000.
Dealers say the company talked about cutting the dealer discount by 1.25 percentage points to fund the facility upgrades program.
'So actually the dealers are paying for the program under that scenario,' one dealer said.
Saab wants to sell at least 40,000 cars in the United States by 2000, compared to 28,440 last year.
John Orth, Saab's vice president of sales and dealer retail network development, told Automotive News last month that Saab dealerships should sell at least 200 cars each year. Last year, the stores averaged 111 cars per store.
He said Saab needs fewer than the 240 stores it currently has, but no dealer will be forced out.
The new fall ad campaign will focus on the technology of the cars. The ads will inform consumers that a related Saab company also makes supersonic fighter jets. 'They want to leverage the fact that Saab is the only auto company in the world that makes supersonic fighter jets, just like the Big 3 show how their involvement in auto racing is applied to their passenger automobiles,' said one dealer at the meeting.
Dealers saw a slide that showed a 1998 Saab next to a high-tech fighter jet made by Saab Aircraft AB, owned by Investor AB. General Motors and Investor co-own Saab Automobile AB.
Saab's new ad agency, Martin Agency in Richmond, Va., will assign some of its employees to Saab's three regional field offices to work with dealers.
Jean Halliday, Detroit bureau chief of Advertising Age, contributed to this report.