All Entries Tagged With: "saab sales"

Spyker: To See Profit, Saab Must Sell 100,000 of These Every Year

By Gunnar Heinrich

BUSINESSWEEK reported that Spyker is thinking that for Saab to see profits the Swedish-Dutch car maker will have to manufacture (and hopefully sell) 100,000 units per year.

Can this be done?

By virtue of Businessweek‘s own reporting, Saab sold 90K cars worldwide as early as 2008 and 120K cars in 2007, respectively.

So yes, if history is any guarantor, the 100K production figure is possible; provided parts pipelines flow smooth like e85.

But according to the BBC, Saab has not seen a profit since F.Y. 2001.

So, assuming that a) the economic conditions continue to improve into 2011 and that b) Saab’s production, marketing, and sales networks will all be in synch so that new 9-5s and 9-4Xs are hitting the streets en masse, SaabSpyker would still be deep in the hole even if it met its own production projections.

It isn’t readily conceivable how Spyker’s new/old entity can can build Saabs at less cost than GM which forced Saab to share platforms and design solutions with other divisions such as Opel.

To boot, Spyker must pay the General for many of its goods and services (read: parts) to Saab which will surely raise the company’s overhead. This, despite GM’s new status as SpykerSaab’s largest minority shareholder.

Short of outsourcing production to, say, Poland (à la Fiat) which would violate the Swedish government’s terms for backing Spyker’s acquisition loan, SaabSpyker will have to do some very inventive math to squeeze the efficiency out of an enterprise that spent the last decade hemorrhaging money.

All that gloom aside, if Victor Muller, Spyker’s tenacious Dutch CEO, was able to pull off this deal with GM despite incredible odds, surely we can’t rule out a second miracle: Saab’s return to sustainable profitability.