LOS ANGELES - Saab Cars USA Inc. is doing more with less. It has cut its dealership count from 271 stores to 205 in the past three years. And the automaker expects per-store sales to jump by 33 percent in the next two years.
At the core of this growth plan is a new stand-alone showroom design officially unveiled here last week. Saab expects high-profile stand-alone stores to encourage more attention from salespeople, more test drives and higher sales.
The showroom, at Saab of Santa Ana, features a stark metallic roofline that looks like a cut-away airplane wing. Inside, the dealership is full of thick hanging glass, brushed metal and recessed lighting.
The lounge features a slot-car track that mimics Saab's test track in Trollhattan, Sweden. Coffee is brewed from Krups makers and served on Heinrich bone china.
If a customer is put off by negotiating indoors, a nearby grove of Swedish birch trees has tables hard-wired into the dealership's computer system, allowing salespeople to work a deal outside.
'We now have a viable franchise. We no longer have to be in the back of the showroom behind another brand,' said Joel Manby, CEO of Saab Cars USA.
Manby expects annual per-store sales to jump from 140 currently to 186 in 2001; that expected jump is even more impressive considering per-store sales were as low as 67 just a few years ago.
Saab sales, lifted by a redesigned 9-5, were up 51.3 percent in the first quarter of 1999.
Dealer John Campbell, who has pared his multiline dealership holdings down to just Saab stores in Santa Ana and Mission Viejo, Calif., said he likes Saab's new approach of granting dealers regional turf.
John Orth, Saab vice president of sales and marketing, said that 70 percent of people who test drive a Saab end up buying one. Hence, the showroom needs to make as strong a brand statement as possible.
Yet, Saab also was cautious not to design the store as a high-cost Taj Mahal. Although the look of the showrooms is grand, it also can be built to many different scales, from 6,000 square feet to 15,000 square feet, depending on the size and strength of a market area. Saab declined to divulge the cost of building such a store.
Saab sees Campbell's new dealership as a national showcase for the company. The company is providing dealers a no-interest loan for half the building costs, with half the loan due in five years and the other half in 10 years.
Saab originally offered dealers cash outright, but the dealer council vetoed the idea, stating that a no-interest loan would have more favorable tax consequences, said Saab COO Dan Chasins.
Saab intends to have 15 new dealerships completed by the end of 1999, Orth said.