General Motors has issued an official announcement saying that it will gradually shut down Saab, following a breakdown in the negotiations with Spyker after "certain issues" arose in the deal.

A previous deal by Koenigsegg to buy up Saab feel apart in late November, and General Motors then reiterated that it will shut down the 72-year-old Swedish brand if it is not sold by end of 2009.

General Motors’ Europe President Nick Reilly said, “Despite the best efforts of all involved, it has become very clear that the due diligence required to complete this complex transaction could not be executed in a reasonable time. In order to maintain operations, Saab needed a quick resolution.”

“We regret that we were not able to complete this transaction with Spyker Cars. We will work closely with the Saab organization to wind down the business in an orderly and responsible manner. This is not a bankruptcy or forced liquidation process. Consequently, we expect Saab to satisfy debts including supplier payments, and to wind down production and the distribution channel in an orderly manner while looking after our customers,” he added.

This means that consumers will never see the 2010 Saab 9-5 sedan and 9-4X crossover. Both vehicles had drummed up a lot of excitement for the future of the brand. Meanwhile, Spyker shares fell 48 cents, or 22%, to 1.71 euros on the Amsterdam exchange for the biggest decline since October 2008.

General Motors has assured that it will continue to honor warranties through other brand dealerships to current Saab owners around the world.

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