Volvo, Saab struggle to revive slumping U.S. sales

Volvo Cars and Saab Automobile AB, struggling to revive slumping U.S. sales, needs to find distinctive design and the right price tags to compete as luxury brands against Bayerische Motoren Werke AG and Daimler AG.

“It will be very difficult for them to move up,” said Brian Johnson, an automotive analyst at Barclays Capital in Chicago. They need to “get something that’s uniquely Scandinavian in design, as opposed to being ‘me-too’ German.”

Moving into the luxury segment in the U.S. is essential to restoring profitability at Saab and Volvo after years of losses under General Motors Co. and Ford Motor Co. The U.S. is Volvo’s largest market and was Saab’s biggest until last year.

Volvo’s eight-month U.S. deliveries dropped 12 percent because offerings such as the S40 sedan failed to attract buyers, while Saab’s plunged 86 percent as consumers waited for the new 9-5, the carmaker’s first new model in eight years. BMW and Daimler’s Mercedes-Benz both posted gains.

As the new owners begin planning new models, which take years to build, they’re counting on their offerings at the Paris auto show opening next week to help bring back some of the buzz.

Volvo will premiere its new V60 station wagon, while Saab will showcase a prototype of its first electric car. A test fleet of the Saab 9-3 ePower, an all-electric version of the 9-3 SportCombi, will begin user trials in Sweden next year.

New Owners

The Swedish carmakers will need to lure back customers who fled in the last year as GM and Ford sought to offload them. Ford sold Volvo to Zhejiang Geely Holding Group Co. last month for $1.5 billion, while Spyker Cars NV purchased Saab from GM in February for $74 million in cash and $326 million in shares.

Saab’s U.S. sales, which peaked at 48,000 cars in 2003, dropped to 8,500 last year. Volvo’s U.S. deliveries declined 16 percent to 61,435 in 2009. BMW sold 196,502 cars in the U.S. last year, while Mercedes-Benz delivered 190,604. Toyota Motor Corp.’s Lexus is the luxury leader in the U.S., the world’s second-largest car market after China.

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