STOCKHOLM -- General Motors' loss-making car brand Saab can break even at a significantly lower production volume than previously expected after recent costs cuts, a top GM executive said on Tuesday.
But it was still too early to say when Saab would reach profitability, GM Europe President and Saab Chairman Carl-Peter Forster told an auto industry conference in Stockholm.
The Swedish brand, which last year made just over 120,000 cars sold mainly in Europe and North America, has racked up hefty losses in recent years in a fiercely competitive market.
"We believed break-even for a premium brand like Saab was well over 200,000 units," Forster said. "We now know that that point is well below 200,000 units."
Forster told Reuters that cost cuts of more than 100 million euros ($117.2 million) had been pushed through at Saab, in part by cutting staff at its plant in Trollhattan in western Sweden, lowering the point at which the firm could turn profitable.
"Because of greater integration we were able to take a couple of fixed costs and overheads out of the business," Forster said.
He affirmed GM's commitment to continue manufacturing at the plant in Trollhattan, which earlier this year lost a race for a crucial contract to build the next generation of GM's mid-sized cars in Europe to the Opel plant in Ruesselsheim, Germany.
The Swedish plant needed to make well over 100,000 cars to be profitable, Forster said. Last year 102,000 units rolled off the production lines in Trollhattan and another 18,340 Saab convertibles came from contract builder Magna Steyr in Austria.
GM has previously pledged to maintain output at the Swedish plant at least until 2010. It will build a new small Cadillac called the BLS there from next year as well as the new Saab SportCombi wagon.
Forster said the group was "determined to manufacture cars in Trollhattan" but added that it was still not decided if the upcoming Saab 9-5 model would be made there.
Cost savings of having production of the new model at the group's significantly bigger Opel factory in Ruesselsheim amounted to "double-digit millions of euros", Forster said and noted that other car models might be produced in Trollhattan.
Forster would not say when the Saab, or the likewise loss-making GM Europe division of which it is a part, would begin generating profits, but said that better use of group resources had helped propel Saab to record sales this year.
"That is one of those really big questions which will depend on the market," Forster said.