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Saab latest luxury automaker to offer smaller car USA: April 17, 2003 DETROIT - In the land of oversized sport utility vehicles, the next big thing may be small cars. General Motors Corp.'s Saab division said this week it would offer a small car in North America next year, becoming the latest premium-priced automaker to go down-market to expand sales and try to lure younger buyers. In GM's first product collaboration with Subaru parent Fuji Heavy Industries Ltd., the new Saab 9-2, will be based on the Subaru's all-wheel drive cars and will go into production at Subaru plant in Japan next spring. Sketches of the 9-2 were shown at press conference in New York this week ahead of the New York auto show this week. Saab's top competitor, fellow Swedish automaker Volvo, will also display at the auto show five small models of what an entire range of small Volvos could look like. Perhaps tempted by the success of the Mini, the British-built small car revived by Germany's BMW AG, more automakers are looking at bringing smaller cars to U.S. consumers, who traditionally have lived by the credo 'bigger is better'. Volkswagen AG's luxury division Audi has said it plans to bring the A3 to the U.S. market in a few years, and DaimlerChrysler AG's Mercedes has repeatedly said it is considering importing its small A-Class and Smart cars. BMW has shown a concept version of its forthcoming 1 Series small cars, priced below its popular 3 Series models. "It's really an opportunity to bring buyers in at an earlier age then they would be able to," said Mike Robinet, vice president of global forecast services with CSM Worldwide, which consults with the automotive industry. "You get a younger audience, and if you impress them the first time, you might be able to hold on to them later." RISKS TO IMAGE But the strategy is not without risks, industry officials said. Denny Clements, group vice president and general manager of Toyota Motor Corp.'s Lexus luxury vehicle division, said the Mercedes "star" hood ornament could lose its exclusive appeal by mass marketing the brand. "If I buy a Mercedes because I'm buying the star (brand, and I wake up in the morning and the teenager across the street has a Mercedes, what does that do to the brand?," Denny Clements, group vice president and general manager of Toyota Motor Corp.'s Lexus luxury vehicle division, told Reuters on Monday. Clements said Lexus has no plans to bring smaller, less expensive cars to the U.S. market. "We don't think that its appropriate for us to do that. If we talk three years from now and there's this huge business there, then I think we have to come up with other measures." Mark Fields, chief executive of Ford's luxury brand group including Volvo, Jaguar, Land Rover and Aston Martin, said the push for smaller cars came amid European regulations forcing automakers to cut emissions of carbon dioxide, widely regarded as a cause of global warming. Rather than responding to U.S. market demand, European automakers are trying to cut costs by expanding the sale of small cars to the United States, he said. "The more units (cars) you can sell, the better your business case. So maybe you look at markets you normally wouldn't look at," he told reporters at a Jaguar press conference in New York this week. In the case of Saab, GM is eager add some excitement and sales to the brand, which has lost money in nine of the last 10 years. Saab expects to initially produce about 7,000 of the 9-2 annually, with initial sales in North America only. The base 9-2, with a 2.5-liter four-cylinder engine, will be based on the Impreza sedan; a high-performance model with a turbo-charged 2.0-liter four-cylinder engine will be based on the sporty Subaru WRX, which has won strong reviews. GM owns a 20 percent stake in Subaru's parent company, Fuji Heavy Industries. Noting that prices for the larger 9-3 sedan starts at around $26,000, Saab President Peter Augustsson said that "the 9-2 provides us with an opportunity to go below that price point. It's a growing segment in the U.S. market and we wanted to be a part of it," he told reporters at a press conference in New York this week. Story by Michael Ellis REUTERS NEWS SERVICE ------------------------ Yahoo! Groups Sponsor ---------------------~--> Make Money Online Auctions! Make $500.00 or We Will Give You Thirty Dollars for Trying! http://us.click.yahoo.com/yMx78A/fNtFAA/i5gGAA/9bTolB/TM ---------------------------------------------------------------------~-> Biofuels at Journey to Forever http://journeytoforever.org/biofuel.html Biofuel at WebConX http://webconx.green-trust.org/2000/biofuel/biofuel.htm List messages are archived at the Info-Archive at NNYTech: http://archive.nnytech.net/ To unsubscribe from this group, send an email to: [EMAIL PROTECTED] Your use of Yahoo! Groups is subject to http://docs.yahoo.com/info/terms/