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Sydney dealers and fleet deal failings slow Saab sales

Slowdown: Saab's Sydney showrooms have been quiet in a boom market.

Lack of traction in NSW, among fleets, is hurting Saab at the sales counter

4 Jul 2008

SAAB Australia director Parveen Batish has blamed dealer issues in Sydney and a lack of fleet sales nationwide as the primary reasons behind the Swedish brand’s poor sales performance this year.

Saab sales volume is down across all model lines and a massive 28.9 per cent for the marque as a whole in the first half of 2008, following just 214 sales in June - down 36.3 per cent on the June 2007 tally.

With just 806 new buyers and a 0.1 per cent market share this year, Saab could sell fewer than 1500 cars for the entire year, down from around 1850 in 2007.

“We’re suffering in the Sydney market – we’re not getting the sales from that area as much as we should do,” Mr Batish told GoAuto last week. “We had a change of dealerships in Sydney and it always takes a while for dealers to understand a premium brand and to get going.

“The second thing is that we’re getting good traction with retail customers but we haven’t got good traction with fleet. We expected to have more of an input from fleet in terms of our overall sales.

“If you take those two in combination, when you’re only selling 100 to 150 cars a month, having your biggest market in the country (Sydney) not performing, it has a big impact.”

Mr Batish was unequivocal in his belief that Saab’s slow sales were due to its retail performance rather than marketing and advertising activities or the product itself.

“If I was to show you our leads and test-drive enquiries for this year compared to the last three or four years – they’re up. We know we’re getting more people interested. We know we’re getting more people interested in a test drive, and we still have a very good conversion rate… it’s just getting them there,” he said.

“(The problem) mainly seems to be Sydney. We’re really pleased with the performance that we’re getting in Perth, in Adelaide, in Canberra, and in fact in Melbourne. We don’t have a very large network – we only have 25 (dealers) – and of those 14 are in metro areas.

“If we could get every one of those 14 dealers up and running, that 25 to 27 per cent negative (sales) would be 25 to 27 per cent positive.

 center imageSaab director Parveen Batish.

“Sydney is… a very fickle market. It very much goes with the newest, the trends, and so on. But I think our customers have a little bit of unrest in terms of the dealer network over the last few years, and that doesn’t help because they don’t feel as confident.

“Premium customers like to see familiar faces, they like to feel as though they’re important et cetera, which is quite right, really. Unfortunately, when you have a change of hands, it takes a bit of time for staff to understand the different customers.

“When you’re used to selling a volume brand and all of a sudden you’re dealing with a premium brand, in terms of customers it’s a different feel. The time it takes for a premium customer to make a decision in terms of buying a car is that much longer. They’re not instantly turned on by whatever is being advertised as far as a tactical message is concerned.”

Mr Batish said he believed sales would pick up in the second half of this year – “we’re hoping to be at least on a similar level to where we were last year” – and that Saab, on an international level, remained secure as a brand of General Motors.

“I think Saab is very secure. If you look at the new product we showed in Detroit and in Geneva, you can see that there is investment in future products. And at the end of the day, future products is the lifeline of any brand,” he said.

“For Saab, we’ve had the 9-5 for too long. And with the 9-3 you could argue that 90 per cent of the bodywork was changed, but we’ve had that probably longer than most people (competitors) would do in their cycle. And also, at the moment we don’t have the proliferation of products in terms of the range that our competitors do.”

Saab will get AWD variants into its regular 9-3 range later this year, while the long-overdue new-generation 9-5 sedan has been pushed back to next year.

The 9-4X SUV was shown at the North American International Auto Show in Detroit in January (with a 221kW/400Nm version of the 2.0-litre BioPower engine), while the 9-X BioHybrid unveiled at the Geneva motor show in March was the first official look at the forthcoming 9-1 compact car. An all-new 9-3 is also overdue.

“There’s absolutely no reason why we couldn’t double our volume over the next few years,” Mr Batish said. “That’s what we’re trying to work towards. We’ve had more of a stable dealer network over the last two years than we had in the previous two years. We’ve turned over more than 50 per cent of our dealer network.

“Over those circumstances, you can’t help but reduce your sales, et cetera, and it takes a while to stabilise. If you look at what we’ve been trying to do, we are trying to make sure that the brand is alive and people understand what the brand is.

“We’ve spent the last 18 months or so trying to tell people what the brand is about, rather than just telling people what the price is. And we’re going to continue to do that. We’ve got to get equity in our brand – we’re not there (at that level) with some of our competitors – so we’ve got to get that equity.

“We have to give people a reason to go and look at our brand, and we haven’t always done that in the past … The plank that we are using is ‘responsible performance’. We do provide performance cars because that’s what people like. But they’re also, at the moment, interested in fuel economy.”
What's coming from Saab:
9-3 XWD variants 4th qtr
All-new 9-5 2009
All-new 9-3 2010
9-4X SUV 2010
9-1 compact 2011

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