Surging Swedes

By strict economic logic, Sweden should not have an auto industry. Its population of 7,500,000 is too small to support mass production of cars. Its low tariffs make it an alluring market for foreign automakers. Its wages--Europe's highest--prevent Swedish producers from underselling foreign cars at home, let alone abroad. But Volvo and Saab, two rival Swedish cars, are both speeding ahead.

Volvo last year made a profit of $3,800,000, while Saab increased its profits from 1960's $1,557,000 to $2,020,000. Between them, Volvo and Saab hold 34% of the Swedish auto market. More important, both are increasing their sales in the U.S.

market despite the competition of Detroit compacts.

The two Swedish automakers have beaten the odds against them by concentrating, not on price, but on merchandising the quality and engineering of their cars. Both companies build their cars from sheet steel that is as much as 20% thicker than that used by U.S. automakers, and coat them with a hide of paint so tough that they need no garaging even in the Nordic winter. To dramatize this sturdiness. Volvo (Latin for "I roll") promises Swedish buyers that it will repair accident damage free during the first five years of a car's life. Saab tests its cars by subjecting them to the subArctic climate of Lapland, once rolled a car (with driver) down a Norwegian ski slope to demonstrate its safety features.

No Deviation. When Volvo built its first auto in 1927, its engineers were so inexperienced in the field that the car bolted backward when thrown into first gear. Today, however, Volvo factories swarm with lynx-eyed inspectors so uncompromising that suppliers are apt to find entire shipments of parts rejected for a minor deviation that many auto companies would let pass. Such rigid adherence to standards comes straight from Volvo's incisive Managing Director Gunnar Engellau, 55, who coldly compels his top executives to reduce their weight whenever they deviate from his specifications for the ideal male figure. Since Engellau took over in 1956, Volvo production has climbed from 36,766 cars to last year's 78,527--and the company now does almost as much business in diesel trucks, jet and marine engines as in autos.

Saab (stands for Svenska Aeroplan Aktiebolaget--Swedish Aircraft Co. in English) has been Sweden's leading plane manufacturer since 1939. But when prospects for the airframe industry began to look dim after World War II, Saab's aircraft engineers went to work designing a car. By 1950 they produced a wind tunnel-tested model that was nearly perfect aerodynamically, but had to be redesigned to hold people. Since then, under the prodding of slide rule-toting Managing Director Tryggve Holm, 57, Saab has become the car for the automotive purist who revels in its front-wheel drive and the tiny three-cylinder, two-stroke engine that looks too small to run a lawnmower but delivers as much power as a conventional engine three times its size. Last year Saab produced a record 33,100 cars: now it is in the midst of a $10 million expansion program aimed at increasing production to 60,000 by 1964.

On Target. Virtually excluded from the Common Market countries by high tariffs, both Saab and Volvo concentrate their foreign sales effort in the U.S. Volvo sold 12,787 cars in the U.S. last year at prices ranging from $2,295 for a sedan to $3,995 for a sports model, surged from tenth place among imported cars to fourth.* Saab, which sells mostly in the East at prices ranging from $1,895 to $2,790, moved from 19th to 17th with 4,169 sales--exactly on target with Managing Director Holm's plan to sell from 12% to 15% of his production in the U.S.

Fortnight ago at the gala International Auto Show in Geneva, both companies unveiled the new cars which they expect to put in even more U.S. garages. Volvo showed a stylish new station wagon (less than $3,000) for suburbanites; Saab offered a hot sports model ($3,000) well calculated to capitalize on the U.S. driver's growing fondness for pizazz. So high was public enthusiasm at the Geneva showings that both Saab and Volvo are confidently looking forward to their biggest spring orders ever. Neither new car, however, will go on sale in the U.S. until it has been exhaustively tested on Sweden's tortuous roads. Says Volvo's Engellau: "If we didn't keep up the Swedish reputation for quality, we'd be dead ducks."

* The top three imports: Volkswagen, Renault, Mercedes-Benz.

This file is automatically generated by a robot program, so reader's discretion is required.