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Saab sales fall but retailers’ margins hold up

Saab dealers have endured a tough two years of falling new sales, but they are still averaging return on sales of 0.7% this year, with the top 15% exceeding 2%.

Registrations will drop to 22,000 this year from 25,000 in 2007 and 27,000 in 2006, largely due to an ageing product range and a lack of new models.

But that is still a “pleasing result”, according to Saab UK managing director Jonathan Nash.

Saab’s two-car model line-up will finally be refreshed late next year with the new 9-5.

It has been a source of concern for dealers, who have relied on a lot of repeat business for new car sales.

However, as one told AM: “There’s only a certain number of times someone will come back to buy the same car over and again.”

After the launch of the new 9-5, dealers will see a steady stream of new vehicles: 9-4X crossover in petrol, diesel and biofuel in early 2010, followed by revisions to the 9-3 as it goes into the last makeover before the all-new version.

Within five years, dealers will have four, perhaps five, models in the line-up. It should enable them to double their annual sales to more than 40,000 units.

“Under the Saab plan for growth, we are discussing with dealers what they think their facilities, people and working capital will have to increase by to keep track with the product growth,” said Nash.

He describes 0.7% return on sales as a “low point from which we will improve”. The aspiration is to average 1.2-1.3%.

Showrooms will need to expand to cope with the larger product range. Minimum standards now are capacity for four new cars and 25 bays for used.

“This will have to go to a higher number,” said Nash. ”Every dealer will have a five-year plan which will be very detailed for the first three years.”

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