Article originally published 6 March 2011
One of the top 10 selling Saab dealers in the United States is Just Saab in Cincinnati, Ohio. The family owned dealer has two locations, both exclusively selling Saab. A satellite location is located in Dayton, Ohio, a city of over 160,000 people about 50 miles (80 km) from Cincinnati.
A.J. Murphy, General Manager of Just Saab’s Cincinnati location, has a long history with Saab. Even as a teen, he roamed the halls of Saab’s U.S. office. In addition to managing a Saab dealer, he is part of an advisory team to Saab Cars North America. In that capacity, he is one of 5 dealer representatives that advises Saab on possible future technology use and helps select the content of Saab’s U.S. versions.
Last month, Just Saab was able to obtain a pre-production model of the Saab 9-4X and displayed it at their exhibition at the Cincinnati Auto Expo.
A.J. recently was kind enough to answer some of SaabWorld’s questions.
SaabWorld: Tell us about the history of the dealership.
AJ Murphy: Just Saab was started in 1993 by Dave and Robin Horstmeyer. The first and “main” location was in Fairfield, Ohio. That store remained the central or “main” store up until almost a year and half ago, when we made the hard decision to consolidate our Fairfield and Cincinnati stores. The Horstmeyer’s sold our Fairfield location to concentrate on maintaining and growing the Cincinnati and Dayton markets.
Dave and Robin have a history with Saab even before Just Saab. They serviced Saabs and Volvos at their company, Scandinavian Motors. It was quite a successful operation. The opportunity to get into being a Saab franchise came around and they grabbed it.
Just Saab is no doubt a labor of love. At the risk of sounding cliche, their passion and love for the Saab brand comes through loud and clear. I really enjoy the fact that I can go to work every day and immerse myself in the world of Saab. The people, product, history and heritage are truly second-to-none.
SW: What is your background?
AJM: My love of cars started at a pretty young age. My mother and step-father were always into cars. Racing, collecting, rebuilding, etc. It’s hard to define my first car. My stepfather, John, had a passion for rebuilding cars and as a result, he would acquire these really cool cars that needed some work and I would end up driving them for a little while during and after rebuild. The privilege wasn’t without sacrifice. I spent many long, hard, hours sitting under cars, covered in oil and grease, fetching tools, and just basically doing what I call, “grunt work” as my step-father brought these cars back to life.
One of my first cars was a 1984 dark blue 900 S 4-door sedan (8 valve, non-turbo, manual shift), a stunning automobile. My friends in Lawrenceville, Georgia had very little idea of what a Saab was. It was actually quite a popular car amongst my friends who drove classic Chevys and Fords.; something about the European mystique, I guess.
At the time, my mother worked for Saab Cars USA in Norcross Georgia. I have fond memories of walking the halls and roaming the main offices of Saab. I would have to say, for the first time, I fell in love with Saab, as a brand. I was in complete awe of the history, the technology, and simplicity of what Saab was. I have vivid memories of looking at a early-90s 9000 thinking, “this is the coolest car I have ever seen.” I would have rather roamed the halls of Saab’s corporate office than do just about anything.
As my mother worked for Saab for many years, I was introduced to the Horstmeyers with the hope of working for them. Well, It worked out. Not without self-inflicted complexity, mind you… In 1996, I started working with Dave and Robin as a service advisor (I had a number of years of prior experience with BMW in Atlanta, Georgia). During my early months at Just Saab, I met Page, now my wife. Page is the daughter of the Horstmeyers.
After about 3 years in service, I transitioned into sales. It just came natural to me; I took to it incredibly easily. Having a passion and love for the brand allowed me to excel in sales.
In 2003, I moved from our Fairfield location to our Cincinnati location. Since then, I have managed Just Saab of Cincinnati. In retrospect, moving to Cincinnati, then a much smaller, less productive location than Fairfield, was one of the best things I’ve done.
In 8 years, I’ve seen Just Saab Cincinnati grow to a top-10 dealer in North America. The progress and growth I’ve been part of has been extremely rewarding.
SW: How was the transition, from the dealer’s standpoint between Saab Cars USA, the importer when GM owned Saab, and Saab Cars North America, the organization that started when Saab left GM?
In some countries, importation of Saabs stopped during the transition. In some cases, Saab is still working on returning to some countries.
AJM: I don’t recall the transition being all that difficult at that specific moment, however new car inventory was non-existent (no production / slow production) for the first half of the year. I recall getting our first 2010 on April 6th of 2010. There have been bumps in the road during the transition throughout the first year. Management changes, system changes, extracting from GM’s systems is like untying a huge ball of fishing line. It’s quite remarkable that Victor Muller and the management team have been so effective and efficient thus far. I’d summarize the whole process of separation as very challenging. Keep in mind, transition is still going on and in some respects will continue for months, if not years to come. It’s hard to untie 20 years of fishing line.
SW: In fact, Saab Cars North America has kept working with the Cobalt Group, a Seattle based automotive marketer who assists General Motors dealers with websites. The Cobalt Group offers a standardized Saab dealer website for U.S. dealers. A sample Cobalt website, using generic information, appears in this link. Saab Demo is a Seattle Saab dealer and a new car and used car Seattle WA Saab dealership. Although the design is different from the global Saab and the Saab Cars North America websites, it provides a uniformity among U.S. Saab dealer websites.
SW: How are Saab sales lately?
AJM: Sales are hit and miss. We finished the year (2010) pretty well. The last half of the year was positive. The first half would be nice to forget (due to no inventory). Consumer confidence has been our biggest hurdle. Calming the fears of someone spending 10’s of thousands of dollars is not the easiest. That confidence is slowly getting better. I’m getting fewer “what’s going on with Saab?”, “I thought Saab was killed by GM” comments.
The 9-3 sells moderately well mostly due to discounting and / or repeat Saab buyers. I don’t have the figures in front of me but a significant percentage of our new Saab sales are to repeat buyers. I’m not seeing a large influx of conquest buyers…yet.
The 9-5 has been received incredibly well by prospective buyers and by those who have seen and driven the car. I believe in the car and honestly think it represents what Saab is about, more so than any product Saab has had in years. I convey this to everyone I speak with about the car. That goes far. If a prospective buyer perceives that their sales person doesn’t believe in the car or is not excited about the car, you’re dead meat. That person will go spend their 40 to 50k elsewhere.
The 9-4x is going to be a big seller for Saab in the North American market. We are getting a lot of calls about it. Unfortunately, probably due to poor timing of the 9-5 release, I didn’t see that same “buzz” toward the 9-5 pre-launch. Which is unfortunate as the 9-5 is one amazing automobile. Every bit as exciting as its German rivals.
SW: Do customers primarily buy new cars from your inventory as opposed to ordering cars? In many countries where SaabWorld readers are, ordering cars is the usual practice.
AJM: With very few exceptions our sales are out-of-inventory or from our existing selection. We will sometimes dealer-trade with other dealers.
The problem with ordering is 1) the time it takes from start to delivery, about 12 weeks. During the last year and half, it has been even more unpredictable.
2) Incentive changes. A lot of our business over the years has been driven by rebates and discounting. If a buyer orders a car, there is no assurance the rebates or discounting will be the same as when they place the order. Customers are not willing to risk thousands of dollars to get precisely the color / options they want.
SW: From the dealer’s standpoint, what’s your feeling on discounting? Is it better to have a higher MSRP and incentives or a lower MSRP with fewer incentives?
AJM: I may not represent the dealer body as a whole with my response but I feel having a higher MSRP and more rebates is damaging in number of ways.
It trains the customer to always want a big discount. Cars are not like homes. Most people don’t expect to pay more for the same car time after time. The current gen 9-3 is a good example. For instance, if someone gets a $299 lease on a well equipped 9-3 sedan, for 39 months, when that lease is up, if they aren’t able to get that same deal, they will typically buy / lease something else…rarely are we able to transition them into a comparable car for more money. It’s also quite common repeat buyers expect to pay less than before. This trend has to stop.
Our resale values would be higher if we would bring our MSRPs down close to transactional prices, creating a healthier pre-owned market for Saab. I’ve actually seen a good trend in resale values in pre-owned Saabs over the last year and a half.
Our residual values would increase (on a percentage basis) creating more competitive leasing without Saab artificially raising the percentage or incentivizing the lease through cash-rebates or lower rates.
Having a MSRP closer to the actual price sold would allow more effective advertising. It’s my belief that advertising a lower start price is more attractive and builds stronger brand value than a higher MSRP and advertising cash back. It’s my feeling that we could build our brand value quicker following this strategy and saving big cash back for year-end leftovers if we can’t move inventory.
Now before I get slammed for this I do recognize and appreciate the counter point to this argument. Why not be proud of our brand? Why should we apologize and show weakness of our product by lowering the price? There’s a lot of understandable and deserved pride within the Saab company. I am one of the proudest employees they have. However, you can’t argue the fact that our cars are not selling at MSRP levels…yet.
I think the best example of this is the new 9-4x. It will start in the North American market at $33,400 plus destination. Just this past weekend I pre-sold a 9-4x at a price that comes in a little below sticker. The prospective buyers I talked to all give me the feeling that the car is worth the money we are asking. I don’t expect the big rebates on the 9-4x if they continue to follow their current pricing strategy.
SW: For the month of March, Just Saab is offering special employee pricing for current and past employees of General Motors, Ford, and Chrysler. This promotion is not a Saab Cars North America offer.
SW: Interestingly, A.J. is part of the Product Vision Team, an advisory group to Saab Cars North America.
AJM: Dave, it might be of interest to know I am on a product advisory team for Saab Cars North America. We are made up of a group of 5 dealers in North America and the Product Manager for SCNA. We meet via phone every month and when possible we have face-to-face meetings.
Our goal is to:
*Provide input for future product design, portfolio scenarios and emerging technologies.
*Work with Saab leadership to optimize the packaging and content of the Saab model line up by analyzing the packaging of Saab’s key segment competitors with the goal of minimizing configurations and making Saab the best value in segment.
SW: The Product Vision Team’s discussions are proprietary and confidential but relate to future products as well as content in different models. Saab also has a separate internal product team that deals with design and major components. Saab Cars North America has an Aftersales Vision Team that discusses parts and service.
Recently, Just Saab exhibited at the Cincinnati Auto Expo. The auto show featured Saab but was actually financially sponsored and set up by Just Saab, not Saab Cars North America. Just Saab was able to get a pre-production Saab 9-4X and company displays for the auto show.
AJM: …Joey Conley, our sales manager in Dayton was responsible for getting that (the pre-production Saab 9-4X). It was months in the making. He started with our SCNA Regional Manager and ended up working with someone within Saab who handles shows and exhibits. The actual cost involved with transporting the 9-4x from Detroit to Cincinnati. It wasn’t cheap. The cost to go back to Detroit was picked up by Saab. Having the 9-4x at our show was a huge score.
All materials were created in-house by me (I have a pretty creative, artistic side with a good working knowledge of Photoshop and InDesign). We gave out tri-fold brochures that covered our range of models.
SW: Is there anything you would like to tell the SaabWorld community?
AJM: First and foremost, I want to thank all who supported Saab before, during and after the GM sale days. It was truly inspirational to see the uprising of Saab fans worldwide. I personally went up to the Detroit Rally at GM’s RenCen. It was extremely windy and cold but wouldn’t have missed it for anything.
Websites and blogs like SaabsUnited and SaabHistory (editor: now inactive) played an unmistakable role in Saab’s survival. Amazing history was made.
I encourage everyone to continue to support the brand somehow, someway. Not everyone can afford a new Saab, but to those who are waiting for the next-generation of Saabs, I ask you to go check out, in person, the current line-up of 9-3, 9-5 and soon-to-be 9-4x. I think there’s a pre-conceived idea of these products being stuffed with GM content. This couldn’t be farther from the truth. The 9-5 and 9-4x are amazing automobiles that offer a true Saab experience from design to safety to performance. The future of Saab needs people buying Saabs now.
SW: Thanks to A.J. Murphy and Just Saab for their insights.
Photos courtesy of A.J. Murphy, used with permission