Things aren’t so rosy at Volvo, either
As I’ve commented before when this has come up, Volvo, our favorite nemesis and doppelganger, has also fallen on hard times when it comes to sales in the US and EU.
According to the Financial Times, Ford Motor Company, Volvo’s parent, will take a $2.4 Billion writedown at Volvo for last year’s losses, and will be reducing output by 17% for the first quarter of this year as compared to last year.
Ouch.
Ford pointed out that Volvo sales for new models were disappointing and that currency exchange and heavy discounting had large effects.
Volvo’s line in the United States is much bigger than Saab’s: four cars (four sedans with two wagon variants), an SUV, a CUV and a convertible. If my observations are correct, US sales are weighted in the SUV and CUV categories. Indeed, S40 sales were slow enough that a few made it into the rental car ranks, which usually spells doom for any hope of profit.
It’s tough out there, that’s for sure.
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So we should not be so hard on Saab. The fact is (as you said) it’s tough out there. It’s tough for everyone. At least Saab is trying to keep up.
Maybe Ford should include Volvo in the Tata deal?
Given that Ford would be asking north of the $6+ billion that they paid for Volvo, I don’t think that Tata has the Jack. EnG
As with the issues at SAAB in the USA. Volvo is building large thirsty cars. The new V70 is offered with thirsty engine choices. The new new C30 comes only with 28mpg highway. Our 9-3SC gets 30mpg highway, but it is bigger with more utility. If people decide to downgrade from an SUV or a large car to a more economical vehicle, well then, the mpg better be better. SAAB and Volvo need to seriously start looking at efficiency as a selling point. We would have already bought a second SAAB would the mpg highway be over 36 mpg. Why not offer more engine choices? They say it is expensive to homologate more engines for the US market. I wonder how expensive sliding sales are or no sale. Why do I need a car that can go 130mph when we can only go 80mph and that by breaking the law.
As is the case with both Saab and Volvo, their modern diesels are NEEDED in the U.S.
I was very surprised. Non of European brands are selling diesel cars in US I checked Audi, BMW, MB (A4, 3er, C-class). Noone likes diesel cars? Not enough diesel station? Noone cares about economy? Too hard to answer.
Dan: I couldn’t agree more. Plug-in diesel hybrid. There’s a real green car.
For Saab enthusiasts it makes no sense to have any malicious pleasure on the situation of Volvo. Saab has to mind its own business.
I agree. This shows that Volvo is affected by many of the same challenges as Saab. EnG
I’d like to know how the A + B Teutonic brands are traveling in as well to clearly assess how difficult business is in the US. The Yanks are having all sorts of problems and confusion though in terms of the future of their own Motor Vehicle industry, Petrol prices etc etc . Clearly for both Saab and the other Swedish the market will always regard them as 2nd tier Europeans. This news is a big surprise as Volvo has had a lot more visibility and better line up than Saab. I’d like to know how they are traveling in Europe.
Audi:
2007 was AUDI AG’s twelfth record year in a row worldwide. From January through December, 964,151 cars were handed over to customers – 6.5 percent more than in 2006 (905,188).
Audi posted growth in sales in every region.
In Europe (including Germany), Audi delivered 686,480 cars during 2007, or 4.3 percent more than the previous year (2006: 658,463). Great Britain was the biggest European export market for Audi: the premium brand from Ingolstadt increased its sales here by 17.1 percent to 100,712 cars.
In America, Audi gained 4.5 percent for the year as a whole, with 115,629 cars sold (2006: 110,626). Of this number, 93,506 cars were sold in the US, a gain of 3.8 percent (2006: 90,116).
In the Asia-Pacific region, Audi was able to increase sales by 20.5 percent to 134,176 cars. China (including Hong Kong) was the biggest export market in 2007 for the company from Ingolstadt. From January to December, Audi sold 101,996 cars here – 24.8 percent more than during the previous year (2006: 81,708).
The region of Africa and the Near and Middle East also developed into an important growth region. Sales figures grew here by 12.8 percent to 27,866 vehicles sold (2006: 24,712). Sales in the Middle East alone rose by 38.2 percent to 6,380 cars (2006: 4,616).
In its home market, the brand with the four rings sold 254,014 cars (down 1.5 percent; 2006: 257,792). Market share in Germany grew from 7.6 percent to 7.9 percent when compared with the previous year; Audi thus achieved the highest share in domestic competition in the company’s history.
The BMW Group continued its successful course last year, reaching its best sales levels for all three automobile brands. Worldwide, 1,500,678 vehicles were delivered to customers (prev.yr.: 1,373,970), which corresponds to a 9.2% growth in sales. For the BMW brand, sales reached 1,276,793 vehicles, outstripping the previous year’s level (1,185,088) by 7.7%. MINI also recorded a robust rise – in comparison with the previous year (188,077), the brand increased by 18.5% to 222,875 units sold to customers. Rolls-Royce Motor Cars saw sales in 2007 increase by 25.5%, compared with 2006, with retails of 1010 cars (prev.yr.: 805), taking annual sales into the four-digit range for the first time.
In 2007, the clear front-runner, not only in the BMW model range but also in comparison with its relevant competitors, was the BMW 3 Series, with its saloon, touring, coupé and cabrio versions. 37% of the BMW Group’s total sales came from this model series, which increased again by 9.2% to reach 555,219 units (prev.yr.: 508,479). The BMW 5 Series, which comes in second place in terms of volume, maintained the high levels of last year (232,193/-0.6%), with 230,845 automobiles sold. Third place is taken by the BMW 1 Series, with 165,803 cars delivered to customers (prev.yr.: 151,918). In particular, the three-door variant, also available since May 2007, helped sales to rise by a further 9.1% compared with 2006. The BMW Sports Activity Vehicles (SAV) also continued to sell very successfully in 2007, and the BMW X5 in particular, of which 120,617 units (prev.yr.: 75,321) were sold, increased by a stunning 60.1%. This means that sales of this model, which is way ahead of its relevant competitors in its segment, considerably exceeded expectations. Even in the fourth year after its market launch, the X5’s “little brother”, the BMW X3, stayed at a high level, with 111,879 units sold (prev.yr.: 114,000/-1.9%). Last year, 44,421 BMW 7 Series vehicles were sold (prev.yr.: 50,227/-11.6%). The BMW Z4, with its Roadster and Coupé variants, was delivered to 28,383 (prev.yr.: 30,996/-8.4%) customers. And 19,626 (prev.yr.: 21,947/-10.6%) of the luxury BMW 6 Series Cabrio and Coupé were sold.
Looking at sales by country, the USA continued to be the largest single market for BMW and MINI automobiles in the year 2007. Here, the BMW Group sold 335,840 (prev.yr.: 313,603/+7.1%) vehicles, which is more than ever before. In 2007, BMW was the most popular European premium brand amongst US customers – over 293,795 (prev.yr.: 274,432, +7.1%) Americans chose a BMW. This actually made BMW the most successful European automobile brand in the US market last year.
The US is followed in second place by Germany, with a total of 284,523 new registrations (prev.yr.: 296,930). Here, the high level of the previous year was not maintained, because of the increase in VAT and the uncertainty caused amongst consumers by discussions about CO2. Nonetheless, the BMW Group has done better in Germany, where the decline was 4.2%, than the market as a whole (-9.2%). Clear two-digit percentage increases were recorded by the markets that came in third to sixth places: last year, the United Kingdom recorded 173,685 deliveries (prev.yr.: 153,957/+12.8%), Italy 106,985 (prev.yr.: 96,458/+10.9%), Spain 72,849 (prev.yr.: 63,040/+15.6%) and in France 65,081 (prev.yr.: 52,875/+23.1%) cars were handed over to customers. Very positive developments were also recorded in 2007 in the growth markets of China, with 51,588 units (prev.yr.: 36,357/+41.9%), Russia, with 14,686 (prev.yr.: 9,505/+54.5%) and India, with 1,387 deliveries to customers (prev.yr.: 257/+439.7%).
As much as I USED to like Audi’s, I wouldnt buy one if they were the last car for sale on the planet. The staff in their dealerships are, quite frankly, bl**dy ignorant!
I remember way back in the early 80s when ovloV was the best selling European car in the USA.
“…Volvo, our favorite nemesis and doppelganger…”
I just want to point-out that I think it’s really a friendly rivalry between the two brands. I personally have nothing against ovloV owners except that they’re boring people with little taste.
Grip: Nemesis = rival, doppelganger = close associate, alter ego, “double walker” in German. The sentence points out that dual relationship that Saab and Volvo have. EnG
I was just thinking the other day: I almost never see a C30 on the road. I wonder if sales of C30 models are meeting expectations. Rightly or wrongly (and I believe wrongly…) Saab is looking at C30 sales as an indicator of whether or not it’s in Saab’s best interest to re-introduce a hatchback (or more properly a “combi-coupé”).
I also read the other day at ABG a company has a contract with ovloV to manufacture in-wheel electric motors, for the production model of the current Volvo ReCharge Concept. I wonder if Saab is working on this with Volvo as part of that Swedish partnership for plug-in hybrids which is supposed to yield a Volvo plug-in hybrid.
The reason diesels are not sold in the USA currently boils down to 2 reasons. Emisions, the USA has the toughest emisions requirements in the world, diesels don’t meet it. Trucks get a break when it comes to emisions. Secondly diesel fuel is more expensive than premium gas. Diesels are coming but they will be costly, probably a 2K-3K price bump. I like diesels but if the 9-3TTiD was sold here and cost 2k more than the 2.0 9-3, and I had to pay more for gas, I would’nt buy one. I currently get 32 mpg in MY05 9-3.
Diesel cars are here in the US. I’ve spotted several Tid VWs.
Those cars compromise some of the advantages of diesel power for the sake of emissions, unfortunately. EnG
I think the C30ales are lagging, mainly because of price. They easily can reach 30K with a few options. I read Volvo is looking to do a 5 door and possibly dropping the S40 sedan since it is competing with the S60. They are nearly the same size. I hope SAABs 9-1 is a 5 door. 2 doors have a limited market.
Frank A: I think that diesels would be a good counter-punch to Toyota’s (and Honda’s) ubiquitous hybrids here in the U.S. Diesel owners would get just as good fuel economy as hybrid owners but not have to sacrifice aesthetics or performance.
The problem with diesels in the USA right now is that the NOx emissions (a major component in smog and acid rain) requirements in the U.S. are four times more stringent than those in Europe. In order to sell a diesel-powered car in California, New York, and three other states a car company has to mitigate NOx to levels comparable with gasoline-powered cars. This is accomplished typically (as in the Mercedes BLUETEC system the other German manufacturers are licensing) by using a combination of NOx traps (filters) and urea-injection into the exhaust stream. The nitrogen in the urea bonds with the nitrogen molecule in NOx, leaving harmless N2 and oxygen.
The issue with the per-gallon price of diesel should not be an issue as the price of the fuel is not proportional to the fuel economy boost you get. The cost per-mile of diesel fuel is less than that of gasoline.
Right, plus diesel has about 10% greater available energy than gasoline per unit volume. EnG
“Frank A // Jan 26, 2008 at 11:26 am
I think the C30ales are lagging, mainly because of price. They easily can reach 30K with a few options. I read Volvo is looking to do a 5 door and possibly dropping the S40 sedan since it is competing with the S60. They are nearly the same size. I hope SAABs 9-1 is a 5 door. 2 doors have a limited market.”
You hit the nail on the head in terms of the whole price issue. The plummeting dollar and the strong kroner is killing volvo sales in the US. The V70, XC70, and S80 all now cost almost 10k more than they used to relative to the german competition. The prices for volvos have ballooned to within a few thousand dollars of their German equivalents, and your average US consumer isn’t going to spend $50k+ for an S80 when they can get a nicely-loaded 5-series, A6, or E-class for the same money.
Volvo still has an excellent lineup that’s superior to saab’s current lineup no matter how you look at it, but unless volvo moves production elsewhere or the dollar gains strength, volvo’s toast. The XC70 used to be an excellent deal when you could buy a nicely loaded one for $35k, but now that the bare-bones cloth interior model costs ~$37k and a fully loaded one is close to $50k (and it only has 230 horsepower), the new car just can’t match the german competition The same goes for the C30/S40/V50, they are all excellent cars, but they are also at least ~3-5k more than they should be.
The final hiccup for volvo was the new S80, which has a spectacular interior but looks toyota-boring on the outside. That car needed a facelift last year, and again a fully-loaded one costs about $10k more than it should because the dollar is in the crapper. The old S80 t6 was a fantastic deal when you could get a fully loaded one with 280 hp and equipment to rival a 7-series for ~$45k, and while the new v8 is a great (if bland looking) car, that same loaded one now costs ~$55k.
I just hope that ford can salvage the operation somehow, volvo has many great cars but they really are getting done in by the exchange rate and US sales are their most important area.
If the U.S. economy continues into a recession the fact that the upcoming 9-4X is being manufactured in Mexico will be a real boon as it’ll be immune from the Kronor-USD exchange and even the Euro-USD currency conversion detriment.
Because of the North American Free Trade Agreement (NAFTA) goods manufactured in Mexico are imported into the U.S. free of tariffs, so the net result is it’s as if the 9-4X is manufactured in the U.S. but with cheaper labor. The margin on this vehicle should be much greater than that of the European-manufactured models.
So in the U.S. market the 9-4X will be more competitive as it costs less to manufacture and “import” and in the European and other markets it’ll be competitive because the dollar is weak against other currencies, therefore it’s cheaper to buy U.S. exports. While the decision to build a Saab in Mexico is a bit controversial, if done right this can be a great decision in the long run.
Frank A: I don’t think the 9¹ will be a five-door. It’s too small. I think they’re looking at it being a two-door hatchback. Whether that means a combi-coupé-style hatch or a combi-style hatch is up in the air. It’s trying to target a more entry-level market like that served by the GTI and Golf. It’s supposed to be a “hot hatch”.
Even the GTI is available as a 5 door now. A 2-door only will be a mistake. I think unless they can price it below 20K in the US.
I’d like to see a 260 hp 9-1 aero that can outrun and outhandle a mazda3. The “halo” effect that a car like that would have on the brand in the eyes of young buyers would be awesome. Hell, I’d even go so far as to make a “viggen” model. Price it at ~25k base and saab will be golden. Otherwise the 2.0T and other small-engined models should start at or below 20k. The key is to be able to get a nicely-loaded one for ~23k.
I also think that the 9-1 should be a 3/5 door hatch, preferably with more of a fastback look than the C30 and GTI. I hate to say it but the 99 and the older v4 cars should be the inspiration, at least in spirit. The 9-1 should be a raucous, fun to drive little car along the lines of the mini, but with more straight-line acceleration and Saab quirkiness. Quirky and different have the potential to sell well these days, and saab is in a great position to capitalize on this with the 9-1 on the horizon.
…the newest Volvo-design is the weak point of the new model linie up. Just absolutely boring.
Actually, this is the reason for the bad take off of the new line up in the US.
And some days ahead, Saabs are made at Opel, Germany. Still a US-company but with German craftsmanship. Thus, as long as Saab does not copy the Volvo-style, a small number of 91s (and coming 93s, 95s) could be made profitablely in Germany. GM should aready have made the 91 on the existing Opel/Vauxhall Astra. But I think, one of the guys giving a power point presentation convenienced the decision makers to stop such a project. “Could damage the premium project”?
But I think, it´s better to sell cars without “premium” rather than no cars at all!
And hey, GM-lieutenants in Detroit! Saabs without “premium” price would depreciate less!
Ever thought about that?
Yes and even the Saab design should be made in Germany (Kia/Hyundai already did it successfully).