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Saab is bleeding badly and owner Spyker is worried

By Rigval on 18 Apr 2011

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Saab is in deep trouble according to its owners Spyker. The Swedish car manufacturer could seriously bite the dust even after the takeover by Spyker early last year. In fact, Spyker had to let go of a major shareholding of its luxury car manufacturing arm to a UK based investment company to inject some extra capital into Saab but even this little maneuver has not stopped the bleeding. Spyker's annual report had stated that Saab's future isn't certain if they do not secure new funding. I think Saab has caused the owners of Spyker to lose out big time. It had to sell off major shares in Spyker cars and now it reveals that Saab is bleeding badly.

This statement is surprising as I remember writing about the Spyker-Saab deal in February 2010 where Spyker bought the beleaguered company from General Motors for a sum totaling US$74 million in cash and another US$326 million in deferred shares. Spyker took a 400 million Euro loan for Saab and another hundred million Euro loan elsewhere as backup. 400 million Euros is just part of the operating costs of Saab. Of course at that point of time Spyker wanted Saab to sell 120,000 cars per year and the bad news is Saab only managed around 80,000 or so units. It sold more cars in 2009 and obviously, selling less cars meant that Saab is in a real bad state. There was even an issue at the Saab Trollhattan plant which had to be temporarily shut down for about a day or so due to suppliers stopping the supply of parts. All of this isn't confidence building if you know what I mean.

According to the annual report, Saab is losing tons of money due to trying to set up new distribution networks and sales/marketing operations. While this spending of money was necessary and budgeted for in the Saab turnaround cum business plan, Spyker did not anticipate that the actual cash needed was higher than planned. There was also talk that a Russian billionaire is interested in Saab and is willing to invest 500million Euros into Saab. But this is mere speculation and nothing is solid as yet. And why someone is willing to add more money to a sinking ship is beyond me. As if Spyker's foray into Saab isn't a lesson to others already.

All this has basically shown that what I said in my earlier articlewritten way, way, way back in December 2009 where I asked a simple question on Saab and its extinction at that point of time and whether it really matter to any of us?

I basically asked and said - “And what does Saab give us that we can’t get from any other car? I still don’t know. If you do know, you must be a Saab owner and therefore you’re biased. If you’re a Saab owner and you’re feeling angry at this article, you shouldn’t. You should treat this as an early warning and sell your car as quickly as possible and buy something that isn’t a Saab before it is worth lower than the value of scrap. And don’t get any ideas that your Saab will be a collector’s item one day. If it isn’t a Ferrari or a Bugatti, it may be better if you actually sell it and save yourself the pain and suffering in the long run. “

Now do you know what? I think I am still sticking to what I said back then. I still wouldn't give two hoots if Saab kicked the bucket. They've not shown me anything within the last year or so that would make me weak in the knees, make my jaw drop or drool all over like a rabid dog in heat. Aside from a recent concept car called the Phoenix (which is too much of a concept car – too overstyled and clearly on a wheelbase that's too short. It is also inspired by marketing nonsense like Saab's aeronautical heritage – Saab automotive has not been a part of Saab aviation since decades ago), no Saab has made any sort of proper headlines in the last few months that would make a motorhead jump for joy or have an orgasm or that sort of pleasure. What is interesting is whether or not Saab can last another year or will they end up in the graveyard of automotive brands?

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Written by Rigval
Born in 1972. Married with a kid. Loves B-road drives and have driven cars from the 1950s to date.

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Pocus Apr 18 2011 02:48 PM
What is that will the production version of this car be called? Saab Odyssey?
A5SB Apr 18 2011 06:06 PM
There really is nothing much about Saab that is worth looking forward to at this time. It's not so much as getting the marketing and distribution network up, they got to have something to sell, something which gives the company a reason to exist.

There is something about Swedish designs - Volvo and Saab being one example that is a little too esoteric that they can't really find mass market support. If Saab wants to reverse it's fortune, they have to start building cars that appeals to the current taste and mass market, rather than cars that appeal to eccentrics.

Aspri Apr 19 2011 12:05 AM
I think Volvo understands the importance of being a little more mainstream as one can see from their recent efforts in the 60 series. They are not unattractive nor are they overpriced. Certainly lacking in badge credentials when compared against the usual suspects but still not to be ignored. I think it's the legacy that they are trying to disengage from and they are moving in the right directions at the moment. Wearnes, for eg, try their darn best to go the extra mile for their customers. I think Volvo will outlive Saab by a long time as long as Geely doesn't mess with their DNA.

Saab, on the other hand, hasn't quite got it yet. Esoteric is a brilliant word to describe them. They try to differentiate but failed. Didn't come up with anything in the recent 95 to excite anyone too much. I don't find the AD trying their best to woo their customers (even the SE sounds resigned about how many they can sell). I think if that's representative of the attitude of ADs for Saab, you would conclude immediately why they are not successful.
Babyt Apr 19 2011 01:21 PM
design and sell cars not so expensive and comparable to koreans. lol
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