Saab Cars North America Picks 137 Saab Dealers For Future, While GM Terminates 81 Saab Dealers In The U.S.

Posted on 13. Nov, 2009 by in 2000-2009, Dealerships

sd Saab Cars North America Picks 137 Saab Dealers For Future, While GM Terminates 81 Saab Dealers In The U.S.

Photo Credit: Saab Automobile USA

Saab History has confirmed reports from Reuters, and Automotive News this morning about the selection process of Saab Dealerships in the U.S.

According Mike Colleran of the SCNA, the new Saab organization in the U.S. has chosen 137 Saab Dealers that were best positioned for the future, to continue as sales, service and parts retailers in the United States.

In parallel, GM Terminates 81 Saab Dealers that did not meet the criteria for potential throughput, profitability and other criteria that the new new owners of Saab Automobile set.

The results of this process boils down to approximately 37% out of the existing 218 Saab dealerships in the United States that will not be able to continue with the new era of Saab, moving ahead, while 63% will.

Once the Saab sale has been completed which is targeted for November 30th, the 81 Saab dealers will need to cease Saab operations, while the remaining 137 Saab dealerships will be operating under a new sales, service and parts agreement.

Below is a double quoted reference by both GM & Automotive news outlining the details on both sides of the spectrum.

As part of the continuing progress in the proposed sale of Saab, letters have been sent (Nov. 9) to selected Saab dealers in the U.S.

One set of letters is from Saab Cars North America (SCNA) to the Saab dealers it has selected to move forward with SCNA as a dealer and/or service center upon completion of the Saab AB sale transaction. There are approximately 137 dealers in this group.

The other set of letters comes from General Motors and indicates that the remaining approximately 81 dealers will now be expected to terminate their dealership under the terms of the Dealer Termination Agreement (DTA) that all Saab dealers signed in June. Those terminations are expected to happen when the sale closes between GM and the buyer of Saab.

If no sale closing occurs, the provisions of the DTA will stay in place for all 218 Saab dealers based on a ?no buyer scenario.?

Saab buyer rejects 81 U.S. stores

Jamie LaReau
Automotive News
November 12, 2009 – 5:08 pm ET

DETROIT — Saab’s new owner will reject 81 of Saab’s 218 U.S. dealerships, General Motors Co. said today.

GM said in a letter received by dealers today that Saab’s buyer, Swedish exclusive sportscar maker Koenigsegg, selected the surviving stores. Koenigsegg will operate the brand here through a new entity, Saab Cars North America Inc.

The target date to close the sale of Saab is Nov. 30, but it could take until year end, says Mike Colleran, COO of Saab Cars North America in Detroit.

“SCNA did make its selection of (go-forward) dealers based on our business plan and the needs of that plan,” Colleran says. “Essentially, we’re looking for strong dealers who have good profitability and good throughput.”

Location also factored into the decision, he said.

GM sent letters out through Federal Express on Wednesday to rejected dealers, GM spokeswoman Ryndee Carney said. Saab will have 137 U.S. dealers after the sale.

All Saab dealers signed a termination agreement in June when GM entered federal bankruptcy protection, Carney says. The terms of those termination agreements will go into effect for rejected dealerships.

If the deal to sell Saab falls through — as GM’s deal to sell Saturn to Penske Automotive Group did — GM would close Saab and all the dealerships would be terminated, Carney says.

The surviving dealerships will remain under their current dealer contract with GM until it expires in October 2010, Colleran says. Then they will get new franchise agreements with Saab Cars North America.

You can reach Jamie LaReau at jlareau@crain.com.

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No Responses to “Saab Cars North America Picks 137 Saab Dealers For Future, While GM Terminates 81 Saab Dealers In The U.S.”

  1. Kevin

    13. Nov, 2009

    I wonder which ones got the axe.

    Reply to this comment

  2. peter

    14. Nov, 2009

    This is a very complex decision, particularly as future volumes are difficult to forecast.

    Too few dealers and Saab won’t achieve new car volume sales, too many and none of them will be able to make a profit.

    There is also a service responsibility in communities that previously had a dealer. Who will look after these cars ?

    Ideally, Saab dealers would be solus and cover the main urban customer locations. Solus dealers are more focussed on the product and can present a better image of the brand.

    A single Saab in the corner of a multi franchise showroom with no dedicated sales or after sales staff present is not going to do as well as a solus dealer.

    Unfortunately dealers have to make money and covering expensive real estate costs is increasingly difficult for solus dealers as car margins reduce and the after sales opportunity diminishes.

    An expensive city location may need to have 500 new car, 750 used car and 1500+ after sales customers to make a reasonable return as a solus Saab dealer. Obviously the costs are less in smaller towns but still significant.

    With these question marks, finding ideal long term dealer investors will be very difficult and Saab will continue to be the 2nd or 3rd brand stuck in the corner of the showroom.

    Just having the brand costs money in terms of signage, special tools, training, product launch costs, parts and car stocks, etc. These outlets may struggle with Saab below 100 new units per year.

    There are compromise solutions (inc separate showrooms, joint after sales etc) but no ideal easy answer.

    In 1990 GM inherited :

    Annual sales : 26245
    Main dealers : 340
    Solus dealers : 71
    Dealers selling 100+ new cars : 89
    Dealers selling under 20 new cars : 50

    In the 10 months to Oct 2009 new Saab car and truck sales were 7441.

    A significant challenge ?

    Peter

    Reply to this comment

  3. Burn'e

    18. Nov, 2009

    I already have to travel an hour to our closest dealer and now K-Saab want’s me to add about 45 minutes to that? I was geting excited about the prospect of getting a new 9-5 next year. But if I need to drive that distance to get my car worked on I am going to have to look at the Acura and VW, there much closer. Why K-Saab ‘ Why?

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