There are times when automotive history does not make any sense. Take, for example, General Motors’ decision to discontinue the Pontiac G8 and not bring it back under a different GM badge; or the time during the 1990’s when American automotive giants with deep pockets went on a buying spree in Scandinavia. What I’m talking about, of course, is GM’s purchase of Saab and Ford’s purchase of Volvo about two decades ago. The fact that these acquisitions didn’t make much sense is obvious: what we’re left with today, however, are the results of these poor business decisions.
Volvo has done well under Ford: in a span of ten years, the Gothenburg-based company went from making utilitarian boxes to vehicles that lead the automotive design arena as much in the sheet metal as in the interior. And Ford is using Volvo platforms to underpin many of its own vehicles (Ford Flex, Lincoln MKT, Ford Taurus, Lincoln MKS, as well as many others). On the other hand, GM didn’t’ fare as well with Saab.
Not only did Saab produce some of the most uncompetitive vehicles in the marketplace while under GM’s ownership, it made the brand into somewhat of a laughing stock in the automotive enthusiast community. The 9-5 holds the title of “the car that never gets updated” – it has soldiered on, unchanged, for more than six years; the 9-2 was a Subaru with $5,000 tacked onto its sticker price, leading to the coinage of the term “Saabaru.” And the 9-7 SUV was nothing more than a TrailBlazer with the ignition placed between the front seats. During the time that GM owned Saab, it has managed to alienate the brand’s most loyal owners – those who took pride in driving utilitarian yet sporty hatches – a product GM’s Saab was forbidden from selling because it would encroach on Opel’s territory. Perhaps Autoblog’s Johny Lieberman put it best: “Worse, with Saturn morphing into the American branch of Opel, Saab was the afterthought after the afterthought.”
Most recently, an article in Sweden’s di newspaper reported that GM lost $5,100 on every Saab it sold over the last eight years. How so? It cost GM more money to purchase Saab than the revenue brought in by selling the automaker’s products (read: it didn’t sell many units). GM spent $725 million just to acquire Saab (it did so by making two separate transactions in 1989 and 2000). What it all boils down to is General Motors’ horrible strategy (or lack thereof?) that’s still seen today. What, exactly, was the point of having three luxury brands in Saab, Cadillac, and Buick? The net result was that Saab didn’t get the much-needed research and development funds to replace/update its line-up, Cadillac was (and still is) outsold by luxury imports, and Buick became a brand for grandpa.
And while many GM fans would say that it’s useless going back in time, that GM has changed its ways, and that it’s learned from mistakes made in the 1990’s and early 2000’s, I’m not entirely sold. For instance, how is it that Opel vehicles come to the United States as Buick, yet Opel and Buick brands are both sold in China? And what of Buick in the U.S.? There isn’t a clear brand strategy here either – not with completely different vehicles such as the LaCrosse (a soft roader) and the new Regal (more performance-oriented) under one brand. (I will publish a detailed report about this in the next few weeks).
All this brings us to where we are today: GM is trying to offload Saab without much luck. Koenigsegg recently ended negotiations with The General and rumors are rampant that GM may end up sending the brand to join Saturn, Pontiac, and Oldsmobile in the automotive graveyard. While we believe that the Saab brand has too good of a global brand identity to go away, the future is bleak for the Swedish automaker. Personally, I hope Saab survives the next few years, returns to its roots of building performance-luxury vehicles with a European touch, and flourishes under ownership of an independent automaker. And I have only one thing to say to GM: next time, think before you act with your wallet.
[Source: Autoblog via di via TTAC]
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