Saab's U.S. margins improve as sales plunge

By Christiaan Hetzner

DETROIT (Reuters) - Jacking up car prices by some 11 percent has helped General Motors's (GM.N) Saab brand improve margins in its key U.S. market last year despite a sharp decline in volumes, the head of the ailing Swedish carmaker said on Monday.

"We lost more than the market in terms of sales last year but our profitability went the other way around in the U.S. because we have increased prices, we have repackaged the specifications of our vehicles, we have exited from some sales channels that were not profitable," Saab Managing Director Jan-Ake Jonsson told Reuters.

Under pressure to raise cash in the face of slumping sales, GM is attempting to sell Saab and said this week that it has been in contact with a single investor interested in buying the brand.

Ford Motor (F.N) is looking to sell its Volvo brand.

Saab's sales in the United States in 2008 fell 35 percent to 21,368 vehicles.

"Instead of having a negative contribution on our vehicles here, we now have a positive contribution," the Saab chief said in an interview on the sidelines of the Detroit auto show.

He said that the debut of the upcoming 9-4x crossover that will be built in Mexico and go on sale in 2010 would bolster the brand's position in the United States by offering a natural hedge against harmful exchange rate effects that have plagued Swedish carmakers Saab and Volvo in recent years.

"For us the U.S. is pretty important. It's our number one market. In our opinion we need to be here and we need to show that we can make money in this market independent of the exchange rate," he said.