Saab Automobile has a hybrid vehicle in development based on technology being developed by parent company General, a senior executive said on Tuesday.
Saab will also cut development costs by sharing more parts with other GM vehicles, integrating the Swedish brand more closely in GM's operations, Saab Managing Director Jan Ake Jonsson said on the sidelines of the Geneva auto show.
"Saab is a key part of GM's portfolio. We're their European premium brand in a segment that is growing," Jonsson told Reuters in an interview.
Jonsson said Saab's future hybrid would be based on full-hybrid technology that GM is developing in an alliance with DaimlerChrysler AG and BMW AG.
"We're very much into that project, and we have in our future plans hybrids which are based on the concepts that are being developed," Jonsson said.
Jonsson declined to say when Saab would begin selling its first hybrid vehicle, a market now dominated by Toyota Lexus brand for luxury car buyers.
Rival luxury brand Mercedes-Benz said on Tuesday that it would bring its first hybrid to market in 2009.
The GM hybrid technology is only one of the environmentally friendly alternatives Saab is pursuing to the combustion engine, Jonsson said.
Saab used the Geneva show to show off a concept vehicle based on its current 9-5 SportCombi sedan with a 300-horsepower, turbocharged engine capable of running on 100% ethanol, or alcohol derived from plants.
"Saab is a Swedish brand, and I think we have a reputation for being socially responsible...so bio-power fits very nicely," Jonsson said.
The Saab development plans come at a time when the difficulties facing the U.S. auto industry have raised questions about the durability of existing international ties.
Last year, former GM investor Kirk Kerkorian had called for Wagoner to spin off some brands including Saab and Hummer before Kerkorian abandoned his stake in GM over a dispute about the failure of alliance talks with Nissan-Renault.
GM Chief Executive Rick Wagoner said on Tuesday that Saab's sales performance in 2006 had been encouraging, showing the brand could be more successful with a wider line-up.
"It's an opportunity for us, but we have to make a business out of it," Wagoner said of Saab when asked by reporters.
Saab posted 5% global sales growth in 2006, but this year it expects to make roughly the same number as the 133 000 vehicles it sold in 2006.
Jonsson said the cautious forecast reflected concern about the strength of demand in Saab's three key markets. Taken together, the US, UK and Swedish markets account for two-thirds of Saab's global sales, he said.
"There are a lot of uncertainties in all of these markets," Jonsson said.