When SAAB Automobile AB declared bankruptcy in December 2011, one of the few divisions that stayed independent was SAAB Automobile Parts AB. Actually,” independent” is probably the wrong term to use as the Parts division actually became 100% owned by the Swedish state about a year later.
Fast forward to November 2014, “Orio” -as the company is now called- booked a turnover of more than SEK 1B (approx. EUR 100M) in 2013 and has some 350 employees with subsidiaries in 9 main markets and sales and distribution in 60 countries. Despite popular belief, Orio is making a profit and is pursuing ambitious growth targets.
New CEO, new challenges
I spoke with Jonas Tegström, who joined Orio in mid 2014 as their new CEO. SAAB Parts suffered from significant challenges in the aftermath of the bankruptcy from its previous mother company in 2011. “We lost more than 30% of our sales overnight as people believed that this was the end of all SAAB-related business. Fortunately we’ve gradually been able to re-establish sales and have expanded our network to more than 1400 workshops and sales points around the world, actually 200 more than prior to the bankruptcy. We also invested significantly in the re-launch of SAAB Academy so that our service partners can continue to receive advanced training in servicing all SAAB models”.
No parts available?
“There aren’t enough parts available” and “they’ll probably stop supplying soon and then my SAAB becomes unusable” are statements that are still heard in the market place every so often. Interestingly enough, more or less the opposite is true. “While we had a coverage of around 90% initially, I’m very pleased to say that we’re close to 99% at the moment. We worked really hard to find alternative suppliers where needed and are committed to close the gap even further so SAAB customers should feel confident that they’ll be able to get parts for their cars for many more years to come.”, said Tegström.
Even more rare parts are being considered now, for which Orio has started a Special Parts department. “I cannot guarantee that we’ll be able to supply literally everything and things make take longer than usual, but as keeping their SAAB’s in perfect condition is important to our customers, this initiative is really key to us.”
New service to address aging SAAB’s
In fact, Orio’s aim to become even more comprehensive on the parts side is also translating into an extended service offering towards the authorized SAAB service centers. Previously the bulk of repairs were changing of oil and oil filters but as there -at least currently- aren’t any new SAAB’s produced the approximately 1 million cars that are still on the road are getting older. “This aging means that our service centers are getting more relatively advanced repairs to do and we’re looking into how to improve diagnosis and support services to help our service centers to resolve any issues faster and more effective.” Tegström added that Orio will be committing dedicated engineers to run this new service.
When I started asking Jonas about NEVS, he immediately agreed with me that the current situation is damaging for all stakeholders, including Orio. “Whether we like it or not, any news –positive or negative- about NEVS and SAAB is impacting us as well. But what I really hope is that a sustainable solution will be found very soon so that the SAAB knowledge, expertise and manufacturing can be kept in Trollhättan. Anything else would be a total shame and a destruction of capital and this beautiful car brand. We are continuously looking into what we can do from our side to help and have most recently taken over a significant number of tools to manufacture SAAB parts from NEVS to further secure the supply for our customers. We’ll continue to look for ways to help also with any potential new owners”.
Orio actually worked really closely with NEVS on the MY14 9-3 and developed for example the diagnostics systems for it. Although only a few hundred cars left the Stallbacka factory, Orio is also guaranteeing the parts and service programs for this unique 9-3.
SAAB-related activities represent approximately 95% of Orio’s income today and according to Tegström this isn’t going to change in a material way. So how will Orio be able to reach their strategic goals and remain a sustainable business moving forward?
Part of the answer lies in the new services that were mentioned earlier. By expanding the focus to cover much more of the car’s lifecycle, Orio believes they’ll be able to grow substantially. „We’re looking into how we can get much closer to our channel partners and our end-customers. Improving 1:1 communications, positioning the value of genuine SAAB parts, offering several upgrade options, and more.“
About 6 months ago, US-based company Protech1 was acquired to help build and maintain SAAB Part’s position on the North American market. Protech1’s online platform combined with their logistics infrastructure allows SAAB owners in the US to order parts directly,something Orio also started to experiment with in the Nordic countries through our SAAB webshop. „Our webshop in the Nordics has really been beating expectations. Keeping a strong customer engagement is key for our future and we’re looking into even more ways to do this effectively„, concluded Tegström.