TROLLHATTAN, Sweden - Saab plans to boost its volume to 150,000 units in three years, surpassing a break-even point of 130,000.
The new 9-5 sedan and the 1998 9-5 station wagon are critical to the plan, but improving the dealer network could be even more important.
Half of Saab's sales in 2000 would be the 9-5, and half would be the 9-3, successor to the current 900. A handful could be carryover models, such as the 9000 CD hatchback, which will be kept in production as long as orders in European markets justify it. The 9000 will not be sold in the United States after this year.
The 9-5 is the replacement for the 9000, at the top of the range. The new car is expected to maintain sales at current levels in markets like Sweden and the northeastern United States, where Saab is well known. Expansion in weaker markets - Germany, France and the southern and western United States - depends on improvements to the dealer network and marketing.
HIGHER U.S. SALES
Saab Automobile AB President Robert Hendry said the company plans to sell 40,000 Saab units in the United States in 2000, up from 28,440 last year.
'We'll maintain the situation in the Northeast and get 12,000 new units outside New England,' said Hendry. Saab is improving dealers in some markets and adding dealers in others.
The United Kingdom became Saab's second-largest market after the United States in 1996, surpassing Sweden. United Kingdom sales are up 25 percent this year too.
'We have the same number of dealers, but a better organization' in the United Kingdom, said Hendry. 'We've changed some locations, and we've worked with them.'
The U.S. strategy is also one of improvement, not expansion.
Saab wants to give Saab dealers larger geographic areas, develop a teamwork approach, and give customers a feeling of security.
Saab hired several dealer development executives from Saturn Corp. Hendry said Saab's internal language is not to Saturnize Saab dealers, but to Saabize them.
Michael Conti, national training manager for Saab Cars USA Inc., is one of the former Saturn executives recruited to Saab.
'When you've got a Saab badge on your car, you should get the same treatment everywhere,' he said.
Employees at Saab's U.S. headquarters - more than 200 - have received teamwork training, and the same model is being applied to dealership employees.
Saab is urging U.S. dealers to consolidate, trying to bring all parties in a single market together. A single, larger franchise would involve multiple dealership showrooms and service points.
Dealers in some cities will consolidate through buyouts, as Saab dealers have done in Atlanta, said Conti.
Dealers in other cities may form joint ventures.
Saab Cars USA wants to end up with about 215 dealers handling 350 stores, with better locations and higher sales.
The cultural shift in dealerships extends to sales incentive programs.
As of next January, incentives for dealer personnel will be based on customer satisfaction as well as sales.
One other tradition is being swept away: the gold ring program for top salespeople. Future winners will get a choice of incentives.
In Europe, the key market is Germany, said Hendry. 'Sales in Germany are starting to grow,' he said. In Germany - and in France - Saab will add new dealers. German sales were about 4,500 last year, and French sales were 2,500. Saab wants to add 3,000 units in each market.
In those markets, new products are important.
The Saab 900 will get a diesel engine next year, which is expected to help sales in France.
And the 9-5 station wagon was designed with Germany in mind.
Station wagons are a new segment for Saab. Hendry would not predict how many 9-5 units would be wagons. He said 70 percent of sales by competitor Volvo are station wagons. 'With us, it will be closer to 50 percent than 15 percent,' he added.
Japan also is getting an emphasis on dealers. Yanase, Japan's large independent importer, put Saab in 186 dealerships on July 1 when it took over distribution there.
'Last year we sold fewer than 1,000' in Japan, said Hendry. He aims at getting 3,000 or 4,000 sales a year. Yanase gets the 9-5 in October or November.
Saab has changed its strategy, said Hendry. A few years ago it planned to break even at 100,000 units a year. However, it is now spending more on product development and marketing the brand, which has raised the break-even to 130,000 units.