Saab finds a buyer

Posted by: David Welch on June 16, 2009

General Motors found a buyer for its long-struggling Saab business. Koenigsegg Group AB, a consortium led by Koenigsegg Automobile AB, a Swedish producer of super-exclusive sports cars. The performance carmaker won the bidding, with the deal expected to close in the third quarter. GM, Koenigsegg, and the European Investment Bank will provide funding for new models.

Is Saab worth saving? Saab has a couple of decent models, but the Swedish brand has a narrow niche of buyers both in Europe and the U.S. That has been the company’s problem. Saab has fiercely-loyal buyers in the U.S., especially among the college-professor crowd in the Northeast. But GM never found enough of them and Saab was a perennial money loser.

Just look at these ugly sales numbers: Saab sales dropped 52% globally in the first quarter. In the U.S., Saab sales were down 55% through May, to 4,600 cars. No one can make a business out of that.

Koenigsegg will have to get Saab some new models pretty fast. Saab only has the 9-3 and 9-5. GM hasn’t exactly poured investment capital into the brand. The company says there are some new models in the works. But it’s hard to imagine the lineup getting much bigger anytime soon.

What’s more is that Koenigsegg wants to pull 9-5 production into Saab’s plant in Trollhaetten, Sweden. There’s a pitfall there, too. GM struggled with exchange rates exporting out of Sweden. Between the currency problems and the lower prices Saab gets for its premium cars, it’s hard to imagine the company making money, unless the buyer makes big changes.

So why would Koenigsegg want it? Maybe some Swedish car guys want to preserve the hometown marque. While I can appreciate the sentiment, this strikes me as a deal that’s similar to when the Phoenix Consortium, a group of British investors, took MG Rover off of BMW’s hands in 2000 and tried to revive it. Rover was the last English car name that wasn’t owned by Americans, Germans, or Malaysians. But Rover was too far gone and by 2005 it was insolvent.

It will be up to Christian von Koenigsegg, founder of the company, to avoid the same fate. Saab will have one thing going for it: Koenigsegg will probably care more about investing in the name than GM ever did. That, at least, is a start.

Reader Comments

ventsy

June 16, 2009 3:21 PM

Saab are overpriced. $45k for 9-3 convertible? I can get a BMW for that price.
Saab could potentially find a niche market with young buyers, the way Scion has. But they have to lower their price to be in the 20s not 40s.

ANA

June 16, 2009 3:29 PM

Of course Saab sales are down this year there has been a big question mark over their future which will have affected consumer confidence greatly! But now it seems like they are secure. Well done Saab.

New owners will probably want to make Saab succeed rather than treat them as an unpopular step-child.

Saab_N_inAL

June 16, 2009 4:13 PM

My SAAB has spent way too much time in the shop for repairs. The electrical system is terrible. The paint is cracking and chipping at an alarming rate. To top it off, the maintenance crews were not exactly helpful. Buying the extended warranty was the smartest move I have made in a long while. That should speak volumes...

Here is just a tidbit of advice: Reclaim the quality of the earlier SAABs or just fold up and go away.

Andrew

June 16, 2009 4:57 PM

Actually you somehow missed the *private* investors that are financing this deal!

Koenigsegg is not the money behind this, he has backers from both Norway and the US.

The other investor behind Koenigsegg, Bard Eker, is putting his money where his mouth is too!

There is a whole lot more to this deal than GM and some Swedish state backed *loan guarantees* from the European Investment Bank!!!

Rodman

June 16, 2009 6:01 PM

This story is disappointing at best. It doesn't take much research to find out why Saab has been losing under GM. There are private investors pushing to make this happen. Think about that folks. You wouldn't do that with your money unless... right? So readers, there is obviously a missing part to this story. The proof will come in a few years once Koenigsegg cleans all the GM out of Saab.

nyongesa

June 16, 2009 8:19 PM

Saab, Volvo, Jaguar et al, where to small to survive independently and were bleeding money by the late 90's, as the Auto industry globalized. Those losses only accelerated during the tenure's of the big auto groups that owned them, despite billions spent in new platforms, shared parts, and a global distribution system, that would not have been developed without huge infusions of engineering and financial resources, from there parent companies. Now, the auto industry is even in worse shape, new major entrants selling quality products from Korea, India etc, are entering the market. Demand is in the dumps. We are to believe that a ultra-specialty manufacturer that has never mass produced anything, is going to turn around the tide time. If Koenigsegg is a fool he will try, if he is the inspired entrepreneur people claim, he will turn Saab up market a la Bentley, or small and towards the future, a la Tesla (a much better solution all round). Either way, the Saab of yore, long in ICU at GM, is gone. This is simply the pulling of the plug.

LAO

June 16, 2009 9:37 PM

Cleaning the GM out of Saab sounds like a great idea. My almost pure Saab 900S is great -- hoping it holds out until the soul is back in the cars.

Gavin Horne

June 17, 2009 6:02 AM

I am glad to hear we have a buyer for what i think is potentially one of the best marques in cars. I love my Saab but liked my older car better just because it was all Saab not GM influenced the build quality has dropped. But saying that I would not change it for any other car Saab is not popular good I dont want to be the same as everyone else I like to be different long live Saab cars.

Dave

June 17, 2009 5:24 PM

SAABS had a real bad reputation in the nintys worst car to own they are absolutly terible to work on was shocked when i found out that gm bought them glad they are going to be rid of that name and i do wish best for the company as they were fun cars to drive

Randall Smythe

June 17, 2009 5:37 PM

I've owned SAAB 900s, Turbos, and now a 9-5 Aero and I bought them all as used cars. I loved them all, but the Aero just rocks. I hope the brand can be saved and improved by the new investors, but if not i will drive this Aero until the wheels fall off.

rob sindle

June 17, 2009 5:52 PM

at last! a buyer that cares about saab. gm brought them and screwed them over! typical gm. saab 9-3 now has a vauxhall vectra chassis!

Tony Vallar

June 17, 2009 7:29 PM

Why does every story about SAABs start that loss making GM brand. If GM would have used the car as it should have instead of just retagging other cars and saying look a new model. The honchos at GM had no idea what they had. Yes its a niche car but when done right that could have been a big niche. The next generation 9-5 and the new 9-4 will help but they need a great new 9-3 and with K=segg I think we will see one hellava new car. Maybe build a 9-1 as an entry level to lure in 20 something to a great thing.

Saab Technician

June 17, 2009 8:53 PM

I'm glad that Koenigsegg has bought Saab. I'm been working on them at a Saab dealership for about 8 months now and I really love them. Yes, they do all have some of the same problems, but I have found that many of the owners that complain about them don't take very good care of them either. If people would just change their oil more often a lot of the engine problems probably wouldn't exist. Anyways, they're fun to drive and easy on gas as long as you can keep your foot out of them. Hopefully now that they are back to being Swedish owned, they will have a chance to prosper.

dick lague

June 17, 2009 10:35 PM

GM has invested millions in the new 95. How did this reporter miss that? Journalism demands research. The new 95 is ready to roll and is a terrific car.....too bad you never heard of it.

The current 95 is a terrific car, but it was a big secret under GM. They could have not done a worse job with this brand.

Writer's note: The 9-5 is mentioned in the blog post. That gives Saab a sprawling lineup of two cars, neither of which sell in big numbers or command strong prices compared with other premium brands.

jester

June 17, 2009 11:15 PM

I work at a Saab dealer. Hopefully this all works out. They definitely need to get back to their roots to succeed. They also need to lower the outrageous cost of replacement parts. Radio $800,window motor $300,brake pads $130,radiator $400-$600,AC compressor $900. These are average list price just for the part not labor. And the list could easily go on.

nyongesa

June 18, 2009 12:21 AM

Most folks still seem stuck in the 80's. The car industry has no independent mass manufacturers with less than a 1,000,000 units annual sales, for a reason. None of them can compete at those scales. All those airbags, and technical innovations that are standard fare now, require a large integrated group to deliver competitively. Saab, now a brand, mind you, with a factory that cranks out 100,000 units a year of one or two models, is a concept nobody takes seriously who studies the car industry for a living.

So!, the question is why is koenigsegg buying Saab?, the answer is likely to produce something different than anything we see from Saab today. Koenigsegg brings back Saab's original penchant for innovation, leverages Sweden's considerable engineering strengths, and builds upon a local customer base that has the money and instinct to buy an innovative automotive technology, such as new gas electric, or perhaps electric or hydrogen vehicle, then this would all make sense. Northern European leadership in forging a way forward in environmental transformation for our planet would re-affirmed.

Jim

June 18, 2009 12:33 AM

I have owned 2 Saabs, both big bodied 5 doors powered by 4 cylinders. A surprisingly useful combination. Still have the 2005 Aero Wagon, a very nice car. Would buy another like this at a reasonable price, especially now that they offer AWD. I agree they got pretty pricey and increasingly lost panache as GM influence grew. Hope new owners can make something similar.

chris lorraine

June 18, 2009 1:24 AM

I have had three saab 9.3 Aero droptops over the last few years and i have had no real trouble with any of them.But i have noticed that under GM the quality of the build suffered so i am glad that at last SAAB looks like it will finally have someone who cares about the brand. I would rather drive a SAAB than a BMW3 which in england is the car most likley to be driven by a *%#! or Audi A4 which is a lovely car if you like driving a brick.

Ashwin

June 18, 2009 5:51 AM

I Have a SAAB 9 3 2.0T 2006 which drivers incredibly well compared to any other GM, Ford, Japanese / Korean brands that I have driven. The problem is that they are competing with the Germens which is a losing battle from all sides.

SAAB has to get rid of the GM interior, change the suspension as it literally sucks and perhaps put the 95 engine in the 93 to begin with.

In the long run, they have to redo the whole car, with new engine, better design handling if they want to compete with the Germens.

W Boykin

June 18, 2009 8:28 AM

I too own a Saab 9-3 convert and love it. Had a S back in the day; once again great car. Low maintenance once you find a good mechanic and get away from the dealer repair shop. GM is just stupid! they put no money into the brand to promote it and they wonder why it continued to lose money, Duh! No they sell it and in fact it was one of the few energy efficient lines in their company along w/ Saturn. Now whats GM's goal; to build fuel efficient cars and what do you do? Sell off two of your more fuel efficient lines! I wish I could be that dumb and still own a business

Gene

June 18, 2009 8:30 AM

I bought my 95 - rag top new which now has 274,000 miles. I have had very few repairs. I still go between oil changes without adding any oil. When (and if) this car wears out I would strongly consider another SAAB.

Andy

June 18, 2009 10:33 AM

Agree with Randall above. I love driving my 2003 9-5 Aero, and will keep it until it falls apart or something better is available. However, the failures (mostly under warranty or, in one case, GM reimbursed me even though the failure occurred 5 months after the warranty) were staggering: throttle, AC valve, gas tank, Information Center, passenger-side view mirror motor, direct ignition casette, and a bunch more I can't recall). I like VW but it has no competing product, and BMW is too commonplace unless you can afford a M5. Good luck, SAAB.

James

June 18, 2009 11:50 AM

OK now I have a SAAB 9-3 convertable. It's the Aero package. The top works faster and better than BMW M3 and the performance it fantastic. At 120 mph the car sticks to the road with no rise or sliding around. While the GM influance was growing in the car they are still by far understated elegance and incredibily safety. I have owned two other before the drop top. I'm sold and if you have never compared the performace in the Aero package, 2006 and up, you'll be suprized at how well they perform.

Eric

June 18, 2009 12:22 PM

Why couldn't they bill it as the IKEA of cars - uniquely Swedish style at a reasonable price-point. Striking good looks and fun to be around whether the sun is up or down. Something that looks conservative and cautious, but gets playful on the back roads.

I miss my 2002 9-3, but make the most of my 2007 9-3. If I wanted a BMW, I would have found one, but I wanted something practical but still a joy to drive. Saabs come so close to that mark - they just need someone to care about execution. Get the details right and do not make the buyer feel the cost-cutting. Still provide clever touches and integrate the parts-bin parts so they're cohesive, not wedged in (i.e., the redesigned interior with GM-sourced radio).

Please, no more BMW clones. Do not take that path. There are plenty of potential customers out there who see BMW as ultimate driving machines and ultimate ego trips simultaneously. Build a good looking car with spirited dynamics - be lighter while Acura/Honda grows fat, allow road feel where Toyota apes 1970s Buick, avoid early 2000s Audi-style price increases for early 2000s Audi-quality products.

The niche opportunity knocks - not everyone wants to conform to what their neighbor has - take steps to offer an alternative now before the Koreans figure it out (as they almost have, so put some technology-sharing in place ASAP)!

Good luck, Saab. I hope to be a long-time customer and supporter!

Lucas

June 18, 2009 8:12 PM

I loved my Saab until I gave it up for a Mini Cooper. Just as the Saab, Mini is a niche car company, backed by BMW. Had GM been more serious about developing Saab's niche market, Saab could have had a fighting chance to be successful.

I was so excited when the short-lived Subaru Impreza WRX rebranding was coming to a close, and there was much buzz of a brand new 9-2, designed from the ground up using GM platfom and parts, especially in light of the sleek 9-X concepts. But of course, project was canceled. GM decided instead to rebrand its SUV into Saab.

Then GM can't seem to decide what to do with Saab -- every year rumors of a new vehicle design close to completion and market. Every year, nothing. GM simply does not understand how to exploit niche markets.

With hope, Saab will come back with all of its unique qualities and innovation that its loyal buyers and enthusiasts have been waiting for all of these years.

saabdan

June 20, 2009 9:42 AM

I am very excited that koenigsegg has bought SAAB. I may be that niche buyer a physician in the Northeast but I have never had a problem I had a 2001 9-3 se a 2007 9-3 aero and getting a 93 900 conv turbo 5spd next wk from a local saab repairman. All that said although Koenigsegg is a super exoctic they have already done a great deal of R&D that can filter thru and replace the GM don't know how

E. Peter McLoughlin 3010

June 20, 2009 12:55 PM

I have owned SAAB's for 31 years - 11 of them. Great fun cars all. O.K. quality problems for many years, but if you did moderate meintenance(yes, oil changes!!) they were O.K. Currently, I own two. a 1989 900 4D, which is like new with 255Km on the clock, but it is, technicaly, showing its age. Also, my 2008 Aero is a 9.5 wagon - my third wagon. Fantastic piece of machinery. In a full year not even one loose screw. Goes like a scared cat and, what's more is a blast to drive.
I am delighted that CvonK bought the works with his team. That'll be a great mix and bodes well for the marque. Probably a production of 150M that will reflect all the quirky advantages SAAB had in years gobe by.

Skol, it was a great week for SAAB!

E.P.M.

JERRY THOMAS

July 7, 2009 8:34 PM

I HAVE A 2008 SPORT -COMBI 9/5 .BEST CAR I HAVE EVER DRIVEN.I'M 65 AND HAVE OWNED OR LEASED MORE CARS THAN I CAN REMEMBER.WHEN I LEASED THIS CAR IT CAME WITH FREE MAINTENANCE.WITH A LOT OF DEALERS OUT OF BIZ I MUST DRIVE MY CAR OVER 600 MILES FOR THE FREE SERVICE T/Y GM CALL AND ALL I GET IS WE DON'T KNOW GGGRRR!!!

Colin Rosen

November 15, 2009 7:03 AM

I currently own a 9.5 which is almost three years old. When I bought it at the beginning of 2008 it had been a demonstrator with just under 6000 miles on the clock. It had pretty well every extra. This is the SEVENTH SAAB in a row totalling almost 20 years of happy motoring that I have owned and can honestly say that I believe they are a superb car, regardless of who owns the company. I have spent very little on repairs other than regular servicing which is comparable with other similar marques. Long may they continue.

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Want the straight scoop on the auto industry? Our man in Detroit David Welch, brings keen observations and provocative perspective on the auto business.

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