Commentary: Saab goes mainstream to survive, Corporate reform looms as 9-3 debuts

Guest Commentary from August Cole, CBS.MarketWatch.com Nov. 23, 2002

CHICAGO -- Just as Saab's new 9-3 sedan hits showrooms, parent General Motors is tightening the reins on the Swedish automaker.

With GM's European operations still losing money, the world's No. 1 automaker is turning down the screws in Europe. And that means changes at Saab, which has been a big part of the problem for GM on the continent.

For one, Saab is going have to boost worldwide sales to 200,000 vehicles from the current level of 125,000. While that's not going to happen anytime soon, it's a priority.

Even as job cuts in engineering or manufacturing are being talked about in Sweden, Saab is emphasizing as never before its U.S. car-selling efforts.

There's no better indication of what's afoot than the new 9-3 sedan, which is based on a shared platform that GM will use for many cars of similar size. So much is riding on the redesign of the new entry-level Saab because it must be a much bigger seller than the older version of the 9-3.

In that tradeoff, Saab went mainstream. Even though the ignition remains in an offbeat place between the front seats, don't be fooled. That's just a sop to the Scandinavian school of design that created legions of people that were willing to weather balky shifters, torque steering and expensive maintenance. At least the maintenance is free for the first three years on the new 9-3.

Flight plan

By Saab's measure, the 9-3 is off to a successful start: Sales kicked off on Oct. 11 in the states and the company expects to deliver 32,000 vehicles by year's end, with 40,000 on order. Already there's twice the demand worldwide than what can be produced, Smith said.

Plus, the auto magazines have given it favorable reviews.

To be sure, foreign brands can be a handful for their American parents. The same could be said for Jaguar, where high costs are starting to hurt the bottom line at Ford Motor.

Saab has priced the 9-3 within range of the 6-cylinder Honda Accord or a nicely equipped Camry, the two most popular imports in this sedan category. If you're not sure why they'd do that, just ask a late-model 900 owner.

It's also priced below the Audi A4, a BMW 3-series and the Cadillac CTS, also from GM's stable.

Behind the wheel

With 210 horsepower available, the new 9-3 is fast. It handles well too, with little of the wheel spin on wet pavement that can afflict a front-wheel drive car with a powerful engine. It's not bad looking either, with aggressive lines that won't turn anyone away.

But the interior, though it features a handbrake design that is a beautiful expression of ergonomic thought, comes up short. It doesn't feel like it's connected to the aerospace lineage that has dictated Saab's interior design. In fact, the first thing that comes to mind is "Chevy" when you put both hands on the wheel and look at the gauges.

And yet sitting in a new Honda Accord, you get the feeling that this is what a Saab should look like from the pilot's seat and the Saab gives you a feeling of what an Accord or a more pedestrian car is supposed to look like. There's something wrong with that.

This segment should not be about homogeneity, which seems to be the lesson learned from the perennial best sellers like the Accord and Toyota's Camry. It should be about identity, capability and utility.

Breaking with the past

This is where Saab has slipped.

For Saab diehards, it will come back to the hatchback. No other maker could pull off a 5-door or 3-door hatch like it could. On the 900s of the late '80s, the trunk is flat with the rear bumper -- a wagon-like feature.

Still, form rules over function in the entry-level luxury market. A purchase there is about aspiration.

"Not enough of the U.S. consumers considered the hatchback body style to be a luxury car," said Saab spokesman Kevin Smith. Smith is an able defender of the new model's split with its past and points out that not enough people wanted the older model to justify its production.

Painful as it might be to those that have filled a 900 or 9-3 with firewood, that makes sense. A future wagon version will let Saab lure traditionalists who are clamoring for the hatch.

As Smith said, the outgoing 2002 hatch models sold surprisingly well over the summer as devotees snatched them up. Those are the customers, the purists, who should be lining up for the crossover wagon version of the 9-3 when it debuts in a couple years. For the rest, if it's a wagon they're waiting for, it will be hard not to take a BMW 3-series wagon or an Audi A4 wagon out for an extra-long test drive. That's some serious competition, which Saab knows.

"In every measure you can conceive, this is a better car," said Smith.

There is a precedent for the change in the 9-3. The 9-5 sedan also gave up the hatchback available on the 9000 model. It's a wonderful car, surefooted and large even though it too lacks a hatchback sedan version. It's also a less traumatic departure than the 9-3 because of the icon status afforded the 900.

The siren song of stronger sales meant the hatch was left behind like old lutefisk. Purists are always hard to satisfy, whether for Volvo, Porsche or any number of brands that have pursued divergent designs. Breaking with tradition, however, may be just what guarantees Saab's future.

For a few lutefisk lovers, though, Saab is history.

August Cole is spot news editor at CBS.MarketWatch.com in Chicago