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NINETY EIGHT REGENCY

Saab Plans Marketing Blitz for 9-5 Sedan, Reduction in Dealers

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Saab Plans Marketing Blitz for 9-5 Sedan, Reduction in Dealers

June 17, 2010, 2:08 AM EDT

By Ola Kinnander

June 17 (Bloomberg) -- Saab Automobile AB, sold by General Motors Co. to Spyker Cars NV in February, will return to marketing this weekend with a blitz for the 9-5 model and may eliminate one-tenth of its dealers to reduce costs.

“There’s a huge wave of media and communication” that will start in Sweden when the 9-5 goes on sale June 19, Adrian Hallmark, executive director of sales, said in a phone interview. Saab will spend more than $150 million on marketing in the second half of 2010 after spending “nothing” on promotions since the sale by GM, he said.

The new 9-5 model is important to Saab’s aim to become profitable by 2012. The Swedish carmaker will release the 9-5 in Belgium next week, the Netherlands the following week, and then other markets. U.S. dealers will start selling the car in early August, Hallmark said from the company’s North American headquarters outside Detroit.

The spending on promotion comes as Saab plans to reduce the number of dealers by 50 to 100, from about 1,000, by the end of 2011, Hallmark said. The move will reduce expenses such as manager visits to dealers, shipping, training and support, he said.

“If we have 10 percent less dealers and the same volume, those dealers make more money and we have less cost,” the sales chief said.

Since Saab was saved four months ago, the Trollhaettan- based carmaker has focused on restarting production and severing most ties with GM. “We took the decision to conserve the marketing resources and wait until we got close to the 9-5 launch, and then go crazy,” Hallmark said.

Apple Applications

The marketing will feature “all media platforms” and include applications for Apple Inc.’s iPhone and iPad, Hallmark said. Saab dealers will arrange “hundreds of test drives” for potential customers in each market.

“It’s coming in waves, market by market, as the cars are imminent and start to get launched,” said Hallmark, who joined the Swedish company in March from Volkswagen AG, where he was executive director for Asia.

Some of the advertising will tell the story of the company, which GM was close to shutting before selling it to Spyker, a Dutch supercar maker. Saab sales, which peaked at 133,000 cars in 2006, plummeted in 2009 to fewer than 40,000.

Spyker Chief Executive Officer Victor Muller said June 1 that the company will almost double the number of dealers selling its cars this year by offering them through Saab outlets. Spyker’s speedsters include the C8 Aileron, which sells for $214,990 in the U.S.

Share Performance

Spyker has declined 23 percent in Amsterdam trading since Feb. 23, when it announced the Saab purchase, while the Bloomberg EMEA Auto Manufacturers Index has advanced 10 percent.

Rather than eliminate dealers directly, Saab will work with some of them on teaming up or buying out each other, Hallmark said in the June 15 interview.

“We have a lot of high-density dealer coverage in some metro areas,” Hallmark said. “For a brand like Saab, if you want to sell 120,000 cars a year, we don’t need that kind of volume-based, every-street-corner approach.”

link:

http://www.businessweek.com/news/2010-06-17/saab-plans-marketing-blitz-for-9-5-sedan-reduction-in-dealers.html

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