GM reduces length of 2009 Saab warranty

updated 4:13 p.m. ET July 28, 2008

NEW YORK - General Motors Corp.'s Saab unit is cutting the length of its warranty on its 2009 U.S. models in order to better compete against competitors, the company said Monday.

Saab will now offer a four-year powertrain warranty for up to 50,000 miles in place of the five-year, 100,000-mile warranty offered on other GM brands, Saab spokeswoman Joanne Krell said.

Krell said Saab will continue to offer free scheduled maintenance on its cars for three years or 36,000 miles.

"There's no other GM brand that does the three-year, 36,000-mile scheduled maintenance," she said. "That's a very nice offering that definitely makes sense for a premium import."

Krell declined to say how much money the warranty change will save the company, but she said lower costs and a more competitive edge over other importers were factors in the decision.

"One, we think it's a cost-effective way to go to market and, two, we think the four-year, 50,000 and the three-year, 36,000 are the kind that cover Saab customers well, competitive with the kinds of import brands that Saab competes against," Krell said.

Audi, BMW and Volvo offer four-year, 50,000-mile warranties on their vehicles.

GM has owned Saab since 2000, when the Detroit automaker purchased it from Swedish aerospace and defense company Saab AB.

GM started offering five-year, 100,000-mile powertrain warranties on all 2007 model year passenger vehicles in an effort to help it sell more autos by boosting its reputation for quality. The automaker previously provided a three-year, 36,000-mile warranty.

The reduced warranty on Saab models is the latest in a string of cost-cutting measures at GM, as the company tries to navigate a downturn brought on by a weak economy, higher fuel prices and a shift in demand away from its traditionally popular trucks and sport utility vehicles.

GM also announced Monday that it will cut production by another 117,000 vehicles, bringing the automaker's total production cuts to just under the 300,000 units company officials had hoped to cut this year.

The new cuts include eliminating one shift each at its Moraine, Ohio, plant, where Saab 9-7x midsize SUVs are produced.

Shares of GM fell 69 cents, or 5.8 percent, to $11.21 in afternoon trading Monday.

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