$100 Million To Finish, Launch & Market Next Saab 9-5?

Posted on 26. Jan, 2009 by in 2000-2009, 9-5 NG

It was mentioned recently in Autocar U.K,’s post about Saab Automobile’s independence from GM, that it may take up to $100 million to finish, launch and market the next generation Saab 9-5.

If the next generation Saab 9-5 costs this much, it better be a hybrid-hatch at this rate, and secondly, that it is built in Trollhättan, Sweden because that is a ton of money! It is clear that the Swedish government as part of their financial support plan, will require all production except for the Saab 9-4x to be produced in the country, so this makes logical sense.

The next generation Saab 9-5 is indicated to be launched at the Frankfurt Auto Show this September, so that means within less than 6 months, that money will be needed to be spent ahead of time to wrap-up the next generation 9-5. I am guessing, but I suspect that money will be budgeted and put into the business plan due by February 17th. I guess here’s hoping, but still that is a ton of money!!

It’s likely that $100m (EU72m) would be needed to finish the Saab 9-5 engineering work and pay for the launch and global marketing costs of the new car.

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No Responses to “$100 Million To Finish, Launch & Market Next Saab 9-5?”

  1. peter

    26. Jan, 2009

    A lot of money to pay up front, but not a huge investment ?

    Take USD 100,000,000

    Divide it by the lifetime production ( say 8 years at 35,000 units per year) = 280,000

    which gives us a cost of USD357 per unit or €270 at todays exchange rate.

    And if they could sell 50,000 per year ??????

    Peter

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  2. Ryan

    26. Jan, 2009

    Peter,

    Good point, do you think that will be streched along it’s full production lifetime? I got the idea it was just to be used for the first year of completing engineering, doing the launch activities and marketing the first year alone.

    R

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  3. peter

    27. Jan, 2009

    That was how I understood the report.

    It certainly shows how tough it is to produce cars at these low volumes.

    An old adage says that you either need sales of less than 1000 or more than 1m to make money out of a car.

    Obviously Volvo, BMW, Audi, MB, Lexus etc can spread these costs over more units than Saab. Volvo, Lexus and Audi can use other group brands to absorb some development costs.

    Currently, some of the Saab engineering costs are being spread over other GM models. It may save Saab money, but can it produce a genuine premium product ?

    Peter

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