Daily Auto News What's Next for Saab Lovers?
Daily Auto News
Saab, the Swedish automaker whose distinctive sedans and convertibles helped it build cult following and a small market niche in the United States, has filed for bankruptcy protection in its home country. General Motors, which bought the brand in the mid 1990s, failed in its efforts to convince the Swedish government to offer financial support to help Saab stand on its own. Friday, Saab sought protection from its creditors in Swedish court. It’s likely the first of several automaker bankruptcies we’ll see this year, analysts agree..
That seems to be where the agreement ends. If you love the quirky Swedish brand, can you really hope to own a 2012 Saab in the United States?
In the short term, Saab will continue selling cars in America. Saab spokesman Jan-Willem Vester told Kicking Tires that the company “plans to continue U.S. operations as always, including warranty work.” The company has 228 dealerships in the U.S., 71 of which sell only Saabs – the rest sell other GM vehicles as well.
In the longer term, some believe that Saab can’t be saved. Canada’s Windsor Star points out that the brand is struggling even in Sweden. “In its Swedish home market, it ranked behind Volvo, Volkswagen AG and Toyota Motor Corp. in market share last year.” Mike Tyndall, an analyst with Nomura Securities, told the Star, “I don’t see how you make it more profitable than it has been. Unless there is something glaringly obvious that GM missed, which I doubt.” The company has made a profit for only one of the last twenty years. It is possible that the company could fail to emerge from bankruptcy protection.
However, according to Kicking Tires, “Swedish law doesn’t allow for bankruptcy protection unless there is reasonable cause to assume that the purpose of the reorganization will be achieved. That means the company should survive the reorganization process and is looking for both private investment and funds from the Swedish government in the new independent company.”
The Swedish government, however, is unlikely to agree to take responsibility for the brand’s future. “Swedish officials have repeatedly resisted efforts to nationalize Saab,” reports the New York Times.
Any investor buying Saab would get a thoroughly-revamped product lineup. Motor Trend notes that “an all new 9-5,” midsize sedan, as well as two small-to-midsize SUVs, the 9-3x and 9-4x, are “all ready for launch over the next year and a half.” A new 9-3 small sedan is said to be in development.
Another possibility is that a healthier automaker could decide to buy what’s left of Saab. Saab Chief Executive Jan-Ake Jonsson thinks that is a possibility, according to Reuters. Investors who have expressed interest since the bankruptcy filing, Jonsson told reporters, “have been of different kinds, from pure investors to interested parties in the auto industry, but also other carmakers.” Saab could be bought by another automaker seeking entry into the U.S. market, which would keep its U.S. dealerships open.
But those dealerships are independent businesses, each one of which may face a struggle to survive. The brand’s cars are barely selling at all. Kicking Tires reports, “As of Feb. 1, Saab had 205 days of inventory on dealer lots. That means that at the current selling rate it would take almost seven months to sell off its existing inventory without anything new being produced at plants.” With the bankruptcy in the news, it’s only going to get more difficult for them to sell cars. KT reports, “Dealers might not lower prices proactively, but they’ll have to react to the market, and the market never takes kindly to this kind of news.”
Already low prices, then, may decline further. Research the best car deals with U.S. News’ car rankings and reviews.
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