As part of today’s program, I sat down for an interview with Steve Shannon and Jan-Willem Vester from SaabUSA. We covered a wide spread of topics over the course of a half hour. I recorded the coversation and will be transcribing the whole thing as time permits.

The first instalment is below and I think you’ll find there’s some interesting news in there. There’ll be more to come, as well as two more interviews from the show, when I get back home.

We started off just talking about the show in general…..

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Steve Shannon (SS): ……compared to either Macquarie Place in Chicago or the LA convention center it is smaller, but it’s good in a way, because everybody’s nice and tight and ….

Swade: ….you’ve gotta bring your A-game to the display…

SS: yeah, you do. The measure of a show is who brings their really hot stuff because whoever brings more hot stuff brings more media. Some shows just measure themselves by how the footfall is and Chicago’s the biggest in the country from that point of view but if you just talk about the quality of the new-car reveals, then Detroit doesn’t want to be unseated because we kinda control that.

Swade: You must be very happy with how things have been received with the 9-4x.

SS: Yeah. I talked with a number of American journalists and what I’ve heard from Jan-Ake and others who have talked to Europeans, it seems to be going over well. I think the desireability of that segment, just how much it’s growing…to offer a vehicle…it’s such a preferred body style in the US right now and I think the fact that it’s a good fit for Saab - it’s the modern equivalent of a wagon. The SportCombi’s finding its level in the US, but that crossover will have just a little higher seating position and be a little kinder for visibility, and coming in a car that has a high level of ride, handling and refinement.

Swade: Is there a feel for why the SportCombi has struggles because it’s just such a brilliant car, and the reviews that it gets are fantastic - the anti-SUV - it’s got great storage space, great utility….

SS: It’s interesting. Journalists, automotive journalists love wagons, they love to write about wagons. The American consumer is just not….it’s just not taking hold. The SUV shape, the crossover shape has just become…if you want something with more utility than a three-box sedan, I mean, you can try and logic people into, for not very much more money, with better fuel economy - and we’re seeing a little bit of that trade for Combis from SUV’s, but not much.

If we had a lot more advertising resources we might do a lot more proactive advertising with it.

Jan-Willem Vester (JWV): And it’s not unique to us. Audi, Volvo have lost, same with Mercedes, they’ve retracted the C-class wagon.

SS: Yeah. Fundamentally, they’re in the marketplace here because manufacturers develop them from Europe and there really is no incremental cost. No-one advertises them, even our competitors don’t….we just make it available for those that choose it and it’s a certain percentage of people (that want one).

Swade: Does that, as a company, give you a bit of pause….we had heard that there was going to be a crossover version of the SportCombi, raised up a little with cross-wheel drive and some ‘cladding’ …..does that give you pause on doing that sort of thing?

SS: We think it’s worth a shot. Cross wheel drive adds a lot more to that concept, with a little higher seating position, we think it’s worth giving it a try. There are some that…..you know, Subaru with the Outback…

Swade: Very popular in Australia

SS: Yeah, they’re big here too, especially in pockets like the north-east. So, it’s worth doing, but today’s SportCombi without AWD is seen as just like a sedan with a little backpack, and that’s just not quite enough to get people to make the jump. But we’re working actively with the folks in Sweden on what this alternative 9-3 Combi might be like, and …

JWV: …..we have the basic ingredients now, thanks to cross-wheel drive. We never could do it, but we have that now, so let’s explore it a little…

Swade: Are your dealers screaming down the doors for cross-wheel drive to actually hit the road?

SS: They are, especially in the north-east. We got some great dealers, like Len Schraeder, great long-time Saab dealer who’s in a great market in New Jersey calls me about once a week asking “when’s it coming?”

Just having any all-wheel drive system is a big benefit, and then the fact that this system is so capable, so sophisticated, it gives us that little extra. So not only do we have it, we got the best one. How the lawyers let us…..what the claim looks like, I’m not sure, but the ability to be very aggressive - we’re not the first by any means - but were not bringing any all-wheel drive system out, we’re bringing the right one out.

There was an interesting meeting the other day here in the US with a gentleman from out engineering group who had worked at Saab for a number of years and he remembers going through a number of studies in Sweden on different all-wheel drive systems and none of them quite passed muster. Not enough capability, too much extra weight, etc etc. So it’s not that we haven’t looked at it before….this is the right one, and it’s a couple of months away.

Swade: Recently, I emailed Saab Sweden and asked about the eLSD setup in the XWD. People are looking for whn that might become available with the Aero model. It’s not going to happen straight away?

SS: The latest I understand is it will be the 09 model year. The will be around four months worth of 08 model Aeros that won’t have it. As soon as 09 model starts, in about August, it will. In the whole engineering process of making it both engines, both transmissions….we just couldn’t flick the switch all at once, but we’re headed toward the eLSD for the V6 and no eLSD for the 2.0T.

Swade: And XWD availability with the 2.0T? That’s the other thing that people are asking.

SS: That’s with the model year change. For 09, so basically late summer, early fall. And so by the end of this calendar year, it’ll be available on the 2.0T and on the Aero, in both the transmission combinations.

JWV: …no excuses anymore (laughs)

SS: ….and I have my fingers crossed! No, no, no….

Swade: in 2008, aside from the economic conditions here….there’ll be a lot of people waiting for (XWD) so in 2008 we can expect a reasonably lean year in terms of sales growth.

SS: Yeah. If you look at all the different ingredients, we expect the first half of this year to be like the last six months of last year, around 16,000 and it might get better in the second half. There’s some industry headwinds there, but we do have, finally now, a good availability of the 08 9-3. The ramp up was a little slower than we would have liked, so now everyone has enough of those, and we have cross-wheel drive coming but it really only hits the volume car at the end of the year.

The 9-7x is another conundrum because the industry indicators and the segment indicators would say truck-based SUVs are coming down, gas prices are going up, but we think from a profitability point of view it makes sense for us to be a little bit more aggressive, incentive-wise, on the 9-7x. So, we may buck the trend there. Explorer will be down, and the Durango and the other truck-based ones, but we could be up on the 9-7x this year.

When you net all that out…..if we can do this year what we did last year (approx 31,000 retail and 2,000 fleet) then we’ll have around 33,000…..

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more to come when I get home…