It seems Saab has been saved. The white knight in this highly publicized story is Spyker, a Dutch car manufacturer which sells really exotic cars that seems to be bought and driven by no one in particular. 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. The really fantastic thing is that Spyker's CEO had to buy out the company's largest shareholder, a Russian bank tycoon, to go through with the deal. This could show a lack confidence by the bank tycoon in going through with the deal as a shareholder and that he had decided to cash out before things start getting worse. I mean, if you read the Reuters report on the deal, you will know that Spyker has not been profitable since 2000.
Sometimes, ambition gets the better of a company and Spyker may have dug its own grave by purchasing Saab. As I stated earlier, no one actually buys the car even if it is quite good. You can find quality in other marques that have better quality, driving pleasure and even resale value. Trying out a Saab and then liking a Saab is one thing. But after that drive the person then plonks out a wad of dollars and buys a Saab is seldom, or almost never done. The guy who buys Saab must be a person who ignores all basic car buying rules and just loves being different, extremely different. In this case being different means that he has to ignore the build quality of an Audi, the institution that is Mercedes Benz, the driving pleasure of a BMW and the soul of an Alfa Romeo. He must be actually insane.
Even the bad news of the company winding down has effected people who wanted to try out this brand. In comparison, if there were rumours that a terrorist group intended to blow up AAA Airline's aircraft the first thing that may drop is the price of AAA Airline's shares in the stock market. This is exactly the same thing. It may take a few years for people (who don't read or watch the news) to realize that Saab is still around. And don't be surprised that some actually don't.
Anyway, Spyker has also stated that is has the financing to carry out all operations including enough cash to finance new model development. Saab has lost a total of 400 million Euros in 2009 and 300 million Euros the previous year. Spyker as stated has not been profitable and even with financing, things are not as rosy as you think. Spyker took a 400 million Euro loan for Saab and another million Euro loan elsewhere as backup. 400 million Euros is just part of the operating costs of Saab. If the company can lose 300- 400 million Euros in a year, that would mean that the company operates close to double that amount per year. We can say that Saab managed to recoup only half the amount spent, which is a terrible way to do business.
We may be watching another Delorean (as stated in the article) or another Rover, which went bust due to a takeover by a consortium who basically bled the company to death. This arrangement may allow Saab to continue for a while, but I do not see this having a fairy tale ending in the long run. Imagine this as a conclusion to this article; Spyker,a company that has not been profitable since 2000 and it has decided to buy over another very unprofitable company with the hope that it can turn both around by having a symbiotic business plan. There is a slight lack of logic if it were put in that simplified way.
Saab, Spyker, cars, happy ending
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Every car, every brand, has their own character. Not everybody buys cars for practical reasons like build quality, brand image, resale value.
Sure, Saab owners are different. But there's nothing wrong with being different. Their cars may not be the best in class, but that's through no fault of their own. I truly hope the new 9-5 succeeds, and that the Saab brand can rise again.