The ability of ailing car marques to hang on, despite years of falling sales and rising losses is one of the peculiarities of the automotive industry.
But the swirl of rumours around Fiat’s audacious bid for GM’s European division have suggested that Lancia and Saab will finally be killed off.
(Although Saab is currently set to be sold off a separate entity, Fiat’s bid seems to be based on the idea of taking the whole thing off GM’s hands as a job lot).
Both Lancia and Saab have traded on past glories and both have failed to achieve either true blue-chip individuality or to command premium prices within a larger corporate group.
Perhaps Saab and Lancia were fatally damaged when forced to build premium-priced cars based on the mass-market components of the time.
I owned a Cavalier-based 1993 Saab 900 and it was a really poor car (though it was subsequently rapidly improved) and least said about the Fiat Tipo-based Lancia Dedra, the better.
In any case, for the last decade, neither Saab nor Lancia have managed to shift much beyond 130,000 cars each year. Profits were sunk not only by low sales but also by the need to develop individual styling and engineering to maintain ‘brand values’ as well as paying for unique marketing campaigns.
The car industry theory seems to be that it is easier to ‘revive’ a once-great brand, rather than take a risk on developing a new badge.
Even so, legendary engineer Ferdinand Piech was supposed to have said that if he’d know it would have taken 20 years to turn Audi into a blue-chip brand, he wouldn’t have bothered.
The Anglophile BMW board learned a similar lesson when they bought Rover Group in 1994. £800m looked like a bargain when it included a raft of brand names including Rover, Land and Range Rover, Mini, Triumph and Riley.
But BMW was broken by the cost of re-engineering and re-inventing Rover (with the 75), Mk3 Range Rover and new Mini, especially as Rover Group sales started to collapse in 1998.
BMW had thought that it couldn’t expand into new markets under its own badge. Cars such as the X5 proved that it could.
Perhaps the one thing that will come out of the great auto industry recession is the recognition that ailing brands will have to be dispatched dispassionately. Last autumn a Renault board member assured me that the near-premium brands would be first victims of the downturn.
GM has – or is about to - bin Saturn, Hummer and Pontiac. In Europe, Saab and Lancia now look the most vulnerable in a much-more hardheaded car industry.
