• Oct 27th 2009 at 10:20AM
  • 28
Just because Koenigsegg is working to by Saab doesn't mean that the maker of million dollar coupes plans to spend time in the mass-market end of the buying pool. In fact, according to Swedish newspaper Dagens Industri, Koenigsegg wants to make more money selling fewer Saabs, which it can only do by taking Saab upmarket. And the numbers being reported indicate not just medium luxury, but top shelf, Cadillac Margarita luxury. Straight from the paper, this is allegedly Koenigsegg's ambitious three-step plan:

2010-2011: The current phase
- 115,000 cars sold gives zero in operating profit
- Average price per car: 189.000 SEK ($27,546 U.S.)

2012-2015: Transition
- 80,000 cars sold gives zero in operating profit
- Average Price per car: 208.000 SEK ($30,311 U.S.)
- New models including 9-5 Koenigsegg Edition

2016 - : premium
- 65,000 cars sold gives zero in operating profit
- Average Price per car: 280.000 SEK ($40,804 U.S.)
- New models include New 900

There's a bit of confusion over average prices mentioned. The current base price of a 9-3 in the U.S. is $30,360, and it wouldn't make sense to have the average price for the entire model line in the current phase be less than the base price of the cheapest car in the cheapest country, even at a higher volume. (The base Saab 9-3 starts at 301,990 SEK, which is $44,008 U.S.)

If the devotees at Saabs United have it right, a commenter in the original Swedish article who also claims to be a Saab dealer said the average prices are missing region-specific taxes, so they should be 55-60% higher. That would make the transaction price in the current phase about $43,000, and in the final, premium phase about $63,000 with a 55% markup.

While the numbers are fuzzy, what is pretty clear is that Saabs are going to cost a lot more in seven years if Christian K. gets his way. And they'll have to be, if he wants the company to break even on 65,000 cars sold annually, which would be a 27,000 unit decline from last year's (unprofitable) numbers. Saabs United also has a well reasoned look at the various sides, but still, for Saab lovers and watchers, this must all sound a bit crazy. But, hey... so is a Koenigsegg.

[Source: Dagens Industri via Saabs United]

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    • 1 Second Ago
      • 5 Years Ago
      The base model sold in US is way, way more equipped then the base model in Sweden where 2.0T is the top of the range engine and sold exclusively with XWD.
      The 1,9TiD, 1,8t and 2,0t are not even offered in the US.
      Saab 9-3 2.0T XWD cost about 36,400 USD in the US and 304,000 SEK (43,692.54 USD) in Sweden.
      • 5 Years Ago
      What about a 9-1 to compete with the Mini?
      • 5 Years Ago
      This is fantastic news, and a great decision. Saab's going to be a very respectable brand after this. What's surprising is the small amount of time to complete the final stage. 2016? Only 7 years to move a brand very rapidly upscale? I wish them all the luck in the world.
      • 5 Years Ago
      I work at a Saab dealership so needless to say I've been following this closely. Making less cars is a good idea, limits over head and whatnot but plans on taking the car up market to me is a bad idea. If they want take the 95 up market but leave the 93 alone and if anything refine it and make it a niche pocket rocket hatch.

      All I've heard from the customers (some of whom drop $4k on reapairs on a 97'), is that they want the quirkiness back, and a propper hatch. Even some who just bought a new Saab hope that Koe' brings the quirkiness back at a reasonable price.

      Myself as I told a few who work here, give me a lightweight all wheel drive 93 with a great turbo and slap a Koenigsegg label on it. That or a rereleased Sonnet with what I just said.

      But here is hoping whateva happens is good.
      • 5 Years Ago
      This makes perfect sense, and I'm glad to hear it.
      • 5 Years Ago
      This plan works only under the assumption that consumers will be willing to pay more of a premium for a Saab than they do now. That's a big assumption to make.
      • 5 Years Ago
      Fewer? Like... two?
      • 5 Years Ago
      I wish them luck but Saab stopped being relevant a longtime ago.
        • 5 Years Ago
        So did Mini Cooper and look at them now. Quality names with an iconic pasts can come back with the right leadership.
        • 5 Years Ago
        The market is crying out loud for a premium brand that is able to compete with the German options (D and E Volume Segmentation) with something brilliant and exclusive.

        Brands that might one day be able to achieve this:
        - Alfa Romeo
        - Jaguar
        - Volvo
        - Saab (maybe?!?!?!)
        - ?

        Then a few top premium brands that deal with niche volumes and sportcars. But they would have to come downmarket. Not always a good strategy in automotive sales.

      • 5 Years Ago
      Saab has always had the potential to be an upmarket luxury marque like BMW, Jaguar, Lexus. This is actually very refreshing to hear as far as I am concerned. Koenigsegg is out to make a great car, not a great profit. He is pushing the reset button on Saab, bring their cars back to relevance; make them desirable, make them exclusive, make them reliable. Make the car everything it should be and you will get make a profit, albeit long term. Too many companies are too focused on massive profits and massive sales numbers in the immediate future.
        • 5 Years Ago
        @sw - stupid? no. stupid is comparing hyundai's current business model to anyone attempting to compete at the Audi/Merc/BMW level.

        Thankfully a variety of business models work effectively in the car business. Porsche's high profit with low volume. VW's high volume with less profit. Or Hyundai's high volume higher profit (than vw). There's no reasonable excuse to confuse a hyundai model with a porsche model.
        • 5 Years Ago
        ^ Exactly. We've been seeing a trend in the luxury markets in the past 5 years of the brands reaching downmarket (in terms of profit margins) in exchange for huge volume: see BMW, Merc, Lexus. The problem with this strategy is that it flies directly in the face of what a "luxury" car is supposed to be; exclusive. It also leaves the companies extremely vulnerable to fluctuations in market demand as we saw with bimmer last year being brought to its knees.

        I for one, think that in general, the pendulum needs to swing WAY far back towards profits on luxury cars. We make a measly 5.5% markup selling Audi's at full sticker, the real number is more like 2%. It's rediculous for a business to only make $1000 gross profit on a $50,000 car, when people are buying Fendi bags at 3000% markups.
        • 5 Years Ago
        "Few luxury marques are really trying to "reach down"... "

        Oh really??? Ever heard of 1 Series? How about A3? Or TSX? Or the countless others currently in the pipeline?
        • 5 Years Ago
        @sw: I guess they don't expect the economic downturn to last till 2016. I don't know how Porsche is doing now* but before the recession they were insanely profitable company.
        *) The potential VAG-merger/overtake has nothing to do with their cars-operations, but rather with their ambitions being too high...
        • 5 Years Ago
        "Koenigsegg is out to make a great car, not a great profit. "

        I agree with you that he will improve the Saab brand, however, who in businees is not out to maximize profit? I'm sure his investors will tell you otherwise.

        Most Luxury OEM's are reaching down in the market, not up.

        Given an economic recovery is still very shaky, at best, this is not a good strategy. They need to build a better product AND keep price to consumers in check. It's very difficult but that's the world today.
      • 5 Years Ago
      I like the idea of Saab remaining a small boutique manufacturer rather than just another mass marker luxury car and with Koenigsegg behind the wheel we could get some pretty fantastic new models that haven't been toned down to appeal to the masses.
      • 5 Years Ago
      Seems like an awful lot of thought and planning is going into keeping Saab at '"zero in operating profit". Maybe if they put a bit more effort into it they can get up to a +$1 operating profit. Something to shoot for, Koenigsegg.
        • 5 Years Ago
        They are just showing the break even point. Obviously their goal is to sell more than that amount.
        • 5 Years Ago
        You fail at interpreting business reports.
      • 5 Years Ago
      Perhaps they could also 500 of those beasts in the picture as a Saab and bring the average up while keeping the 9-3/900 price relatively stable. Just sayin'.
        • 5 Years Ago
        I hope that's what happens. Love my 2009 9-3, what a great deal. For $27K: 37mpg/hwy (practical, not epa), heated seats, cornering HID headlights, leather power memory seats. It looks great, it's fun to drive, it's powerful and cheap to operate. It's nearly a perfect car for the money and I'd buy another one in an instant.
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