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NINETY EIGHT REGENCY

INTERVIEW: SAAB PRESIDENT MIKE COLLERAN

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INTERVIEW: SAAB PRESIDENT MIKE COLLERAN

By Andrew Ganz

After escaping a near-death experience earlier this year, Saab has become the only major independent automaker. It’s an exciting, but volatile time for the automaker, which is set to launch several new products over the next couple of years.

Perhaps Saab’s current situation should come as no surprise since the Swedish brand has always been known for taking a slightly different path than ordinary – even under its GM ownership.

To discuss the prospects for what is, in many ways, an all new automaker, we talked with Saab Cars North America’s president and chief operating officer, Mike Colleran.

Colleran is tasked with leading the brand in the crucial North American market, but he’s hardly a stranger to Saab. He chatted with Leftlane about Saab’s near future products and, as a reader of the site himself, he was excited to answer questions submitted by Leftlane’s commenters.

The 2010 9-5 is obviously crucial for Saab to grow in the U.S. Tell us about your strategy of launching the range-topping model that costs about $10,000 more than the outgoing 9-5.

Mike Colleran: The launch itself was delayed significantly by all of the liquidation, bankruptcy and sale process. That put us in a position where we had to make a decision on ‘10 versus ‘11. If we had chosen to go with the ‘11 model year only, we would have delayed the launch further and we didn’t want to do that.

For us, it made sense to come out with a ‘10 model year packaged up just one way. We thought that the Aero model would be the correct way to go. A lot of enthusiasts are in the market early.

I will tell you that the early-on order rate looks very good on the Aero models. It’s not surprising because very often you see enthusiasts coming in very strong early.

It’s a short model year run and it will be followed by the ‘11 model [in September] that will start with the 2.0T and range up to the Aero model.

Where does the proposed sub-9-3 model fit in your North American lineup? Victor Muller has been very vocal about his plans to recreate the Saab 92.

Colleran: It’s not officially in the product lineup yet [a Saab 92], but it’s something we feel strongly about. It’s a great segment and clearly the market is heading in that direction. There’s a greater need for fuel economy and the U.S. market is now more open to a smaller vehicle.

It’s not funded yet, but we hope to put something together in the near future to bring a new Saab 92 to market, or whatever we call it.

The 9-4x crossover was essentially complete before GM sold Saab. Has the newly independent Saab changed the 9-4x?

Colleran: No, I don’t think anything has changed. The program is as we have projected it to be. The timing is about right, April of 2011. It will be contracted by General Motors. The vehicle is designed and engineered and ready to go.

It’s a huge segment and a great opportunity for our dealers. It’s a very profitable segment as well.

What would be your vision for a complete “dream” Saab lineup in North America?

Colleran: The candy store. You’d have a 9-3 with a full lineup, you’d have the 9-5, you’d have a premium crossover, you’d have a smaller Saab. And then I’d love to have a performance model that would bring us back some credentials.

Everybody talks about bringing back the Viggen and I would love to have some sort of performance variant. I’m not sure a dedicated model would fit our plan, but in my candy store, I would want something like that.

When you talk about Saab, you talk about independent thinking. Now we have the kind of company that can bring these projects to life.

Diesel? Hybrid? Hatchbacks?

Colleran: The 9-5 wagon is coming in the spring of next year just after the 9-4x. Wagons are part of our future. We’d love to have a hatch, there’s no question that’s one thing that was part of our history. It’s under consideration but no final decision has been made.

As far as diesels are concerned, certainly the miles per gallon are attractive, but there are significant barriers to entry here in the U.S. with the emissions certification. We’ve got great diesels in Europe that just can’t meet the U.S. certifications. Right now, the the cost of doing that ourselves is prohibitive, but as an independent company, there are suppliers out there that we could partner with to do that. We’d love to have a diesel, it’s not in the product portfolio, but we’d love to have it.

We’re definitely looking at hybrids and electrification. We entered into an initiative with Boston Power to develop an electric vehicle and we are going to build a fleet to test them. We’re fully engaged in investigating alternative powertrains.

We’ve seen a lot of automakers embrace their enthusiast culture in their marketing, especially Subaru and BMW. The Save Saab campaigns proved that Saab has a strong enthusiast following. Will Saab continue to be “Born From Jets” or is there more to come?

Colleran: “Born From Jets” is gone, but our aircraft heritage remains. It’s such an important pillar of our brand. You’re going to continue to hear echoes of the aircraft heritage with our communication to consumers.

We moved to the global “Move Your Mind” because, frankly, the brand image needs to be consistent globally. To have a solid brand that people recognize, yo uhave to be consistent.

As far as enthusiasts are concerned, there were a lot of different organizations that were used to help save Saab. They are definitely to be thanked for what they did to help Saab become an independent company. We want to keep that conversation with our enthusiasts and that passion awake. As soon as the company was sold, enthusiasts were the first people we contacted to thank them.

When we go forward, we are going to be much more involved in social media it goes much beyond that. We’ll be at the owner’s convention in July. Victor Muller and Jan-Ake Jonsson [saab's managing director in Sweden] will be there delivering the keynote address at the owner’s convention. I think that’s a very strong statement about the company.

I can’t thank our loyalists enough. We’re going to continue that conversation for a very long time.

How has Saab’s North American relationship changed with the Swedish home office?

Colleran: It has changed completely since there was no organization called Saab USA. That was disolved in 2007 and the people were all folded into the GM premium channel by the summer of 2008. There was no specific Saab department within General Motors.

This company, Saab Cars North America, is a brand new company created roughly from scratch out of a number of people who had Saab experience and some new people to Saab. It is a strong statement when we can say that our team of 45 people in the U.S. has 450 years of direct Saab experience.

The relationship is a brand new relationship with Sweden. I would characterize it as a day-to-day, hour-to-hour, minute-to-minute relationship. We talk to Sweden all the time. It’s a very close relationship.

What is Saab’s current relationship with GM? Where does it go from here? Is there a projected date to “cut the cord” from GM? [submitted by Saabaru1]

Colleran: That’s a great question. In a lot of ways, the chord has been cut. From an operational standpoint, the chord is cut. We are an independent company now.

As you can imagine with a company that was on sale, off sale back and forth, the ability to prepare for operations as a car company is extremely difficult under those conditions.

Saab itself had some needs from day one to keep going. One, we have the 9-4x, which will be contract built for us. That will be out there for a number of years. We have servers and computers and those things that [are still part of GM]. It takes a long time to develop an integrated computer and support structure that can service us. We’re renting that kind of stuff from General Motors. But again, that’s all as we need it.

Over the course of just three months, we have ended a number of contracts with General Motors. The bulk of those transitional support agreements end within 18 months and we’ll be largely using our own systems at that point, although a great number are already our own.

Moving forward, it’s hard to say, since in the industry you’re seeing a number of automotive companies share technologies and intellectual properties. And in this market, why wouldn’t you share?

You can certainly lower your cost by spreading it out throughout a number of automakers.

And we’re under discussions with a number of different manufacturers about potential component and intellectual property buying. Could GM be a potential partner in the future? It could happen, but it could be someone else as well.

Victor Muller projects a larger than life image to the public and the media as Saab’s savior. By now, you must know him well. Tell us a little about him.

Colleran: The logo of Spyker is all about being tenacious. Victor is very tenacious and he certainly showed that in the sales process. That’s real, everything you see is real. He does not let things go easily.

He is passionate about the brand and the business. He’s not a trained design guy, but he loves to design vehicles. He has a number of designs to his credit in the Spyker organization. His background is in law, so buying companies is a core competency for him.

During GM’s ownership of Saab, it was not uncommon to see $10,000 off of MSRP for a new Saab. Do you see Saab lowering MSRPs or will you continue to use rebates as a sales tool? [submitted by JakeK66]

Colleran: We did reprice our vehicles this year. You saw 4 to 12 percent price decreases across the board. That was the right thing to do. It certainly helps support the residual value in the marketplace.

There’s a high propensity in leasing in this market and we are offering competitive APRs and leasing. We have those right now, but we’re just getting product in. Sales will start here pretty quickly. The days of big cash are behind us, although there are times when certain rebates are required, but clearly some of those very large rebates are not the way we intend to go about the market in the future.

What can you tell us about Saab’s relationship with its U.S. dealers?

Colleran: The dealer group numbers just over 200, down from a high of about 265 in the mid-2000 range. It is a dealer body that is intensely loyal and very passionate. They have a very strong appetite to see Saab succeed. They were a very big part of the Save Saab movement. They partnered with consumers.

We’ve re-energized the National Dealer Council. Now the dealers can sell cars as they’re arriving. We’ll start to see sales go up. It’s obviously been a long run, about 12 months without new products. They’re survivors and I’m proud of them.

What’s the latest update on a Canadian market return?

Colleran: We are really pleased to go back to Canada last month. We announced our intention to go back into business in Canada. Saab was officially closed down in Canada back on December 31, 2009, and all the dealers were terminated. We now have a plan to get back into Canada in the fall and we’re working very hard to set up the basic structure and to get the Canadian market reopened.

In the meantime, all warranties are being handled through General Motors’ dealer network. We will take that work over when we re-enter.

We are in the process of identifying the appropriate dealer network in Canada. Many of our dealers will be our former dealers.

link:

http://www.leftlanenews.com/interview-saab-president-mike-colleran.html

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