Saab Set U.S. Sales Record in '03, Has High Expectations for This Year

Detroit Free Press

Jeffrey McCracken

January 7, 2004

DETROIT - Growing sales 27 percent and setting a one-year sales record are always cause for celebration.

The question is always one of sustainability.

Saab Automobile AB set a U.S. sales record in 2003, selling 47,914 of its Saab 9-3 and 9-5 midsize sedans. It was the best year in the Swedish automaker's 47-year history in the U.S. auto market, topping a previous best in 1986.

But after that peak year, Saab's fortunes slid to the point it was selling fewer than 20,000 in 1993. Its once-popular Saab 9000 got old, and the automaker wasn't equipped for new luxury competitors like the Honda Acura.

It probably didn't help that General Motors Corp. - which bought 50 percent of Saab in 1989 - was on the brink of bankruptcy in the early 1990s. GM bought the rest of Saab in 2000.

This time around, Saab ends a record sales year with another car, the small Saab 9-2X, coming to showrooms this summer. Saab also has its first sport utility vehicle, the Saab 9-7X, coming in early 2005.

Saab soon won't be just a European automaker that exports to the United States. The 9-7X SUV will be built at GM's Moriane, Ohio, truck assembly plant that already builds the Chevy Trailblazer, GMC Envoy and Buick Rainier. The 9-7X will be based on the GMT360 midsize SUV platform.

Saab execs have great expectations for 2004 and beyond.

"We should do more than 50,000 units in 2004. Longer term we want to have much higher volumes. Our target is to get to 100,000 in a year," said Peter Augustsson, chairman and chief executive of Saab.

He expects Saab to sell 10,000 to 15,000 of the 9-7Xs a year. His goal for the 9-2X is volumes of about 8,000 a year.

To Saab's credit, its sales grew in 2003 without adding another new vehicle to its lineup. It was also able to avoid vastly higher incentives, auto analysts say.

The credit goes to the redesigned Saab 9-3 sedan, which is new from the ground up with a larger interior. It runs from $26,000 to $38,000.

"A lot of times, if an automaker has a big boost, it's because they introduced some new car or truck. With Saab it's just a redesign that has really caught on with consumers," said Jason Knapp, analyst with Autodata Corp. "They are spending less on incentives than they did a few years ago, which is also impressive."

Saab's growth is also due to its adding more and better U.S. dealers, said Debra Kelly-Ennis, president of Saab Cars USA. It went from 212 dealers to 238 in 2003 and will add 15 more this year.

"We were always strong in the Northeast, but we finally added more dealers in California and across the Sunbelt, like in Atlanta," Augustsson said.

Saab retail sales in Florida, for example, were up 49 percent in 2003 and 30 percent in Texas.

Even with the double-digit growth in 2003, Saab is a relatively small player in the U.S. automobile market, with lower U.S. sales than other marginal players like Suzuki Motor Corp. or Ford Motor Co.'s Jaguar.

Kelly-Ennis says she thinks Saab could change that in a hurry.

"We think the United States has tremendous upside for Saab. We did all this growth with the same two products. Now we'll have new products which will bring in some younger buyers," she said. "Both will have significant volumes, and I think we can count on double-digit growth for the next few years."

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(c) 2004, Detroit Free Press. Distributed by Knight Ridder/Tribune News Service