Saab, Koenigsegg deal falls through, Saab’s future looks bleak

With Saab seemingly headed for doom, the absolutely brilliant new Saab 9-5 may never see the light of day. Unless, of course, a Chinese company steps in to save the Swedes...

In a surprise development, Swedish supercar manufacturer Koenigsegg has decided not to go ahead with its earlier stated intent of buying Saab, from General Motors. ‘We're obviously very disappointed with Koenigsegg’s decision to pull out of the Saab purchase,’ said GM president and CEO, Fritz Henderson. ‘Given the sudden change in direction, we will take the next several days to assess the situation and will advise on the next steps next week,’ he added.

‘We regret that after six months of intense and goal-oriented work, we have come to the painful and difficult conclusion that we are not going to be able to carry out the acquisition of Saab,’ said Christian von Koenigsegg, who heads the Koenigsegg Group. ‘The time factor has, from the beginning, been critical for our strategy to breathe new life into Saab. Unfortunately, delays in completing the deal have led to risks and uncertainties that prevent us from successfully carrying out our business plan for Saab Automobile,’ he added.

Koenigsegg had earlier announced that it would team up with Chinese company Beijing Automotive (BAIC) to buy Saab from GM. However, while Christian von Koenigsegg claims that ‘delays’ in finalising the deal is what’s stopping his company from buying Saab, we suppose money – or rather the lack of sufficient amounts of it – would almost definitely be a factor as well. Koenigsegg needed a loan of about US$600 million from the European Investment Bank (EIB) and had wanted the Swedish government to act as a guarantor, and one or both of these objectives may not have been met.

Established 15 years ago, Koenigsegg has less than 50 employees and produces as few as just 18 cars (albeit very high-performance supercars) per annum, each of which sells for as much as US$1.4 million. Concerns regarding Koenigsegg’s ability to successfully run a mainstream car manufacturing company like Saab had been voiced in various quarters.

Saab has seen a big drop in its sales during recent times. Between January-October this year, the Swedish company sold just 7,441 cars in the US and 23,590 cars in Europe – a decline of around 60% compared to figures in the year-ago period. The future now looks bleak for Saab and unless a cash-rich Chinese company steps in, Saab could be headed for permanent closure.