The whole thing reeked of desperation.
When Dutch sports car maker Spyker Cars NV emerged as the white knight in a last-ditch effort to save Saab Automobile AB, the business media covered the negotiations in that deadpan “we-won’t-tell-you-what-we-really-think” tone that every good reporter learns in journalism school.
Consider the circumstances: Spyker, a ten-year-old maker of hand-built sports cars, has never turned a profit. Last year, the company produced 43 cars and lost nearly $36 million. Do the math: That's a loss of $825,00 on each car produced.
And that was a good year. In 2007, the company lost $3.9 million on each car produced.
It gets worse. A man named Vladimir Antonov, chairman of Russia’s Konvers banking group, owns a large stake in Spyker. Vladimir is the son of banker Alexander Antonov, who was shot five times in the stomach, chest and finger as he left his house on March 11. Antonov lost his finger but survived the attack.
At the time, the Russian newspaper Kommersant speculated that the mafia-style hit was related to the Kaliningrad Seaport, a business venture that involves both father and son. Anybody want to speculate how they made their money?
As we speak, General Motors has announced that the Spyker bid fell short. GM is winding down Saab’s operations, and Swedish authorities are preparing to help a flood of newly unemployed auto workers.
To be sure, Spyker has not given up on its bid, even though it appears all of GM's deal makers are off for the holidays, noshing on fruitcake and putting the memory of Saab (and Hummer and Saturn and Pontiac) into their recycling bins. Media reports speculated that Spyker had lined up last-minute financing from Marcel Boekhoorn, a Dutch billionaire. Boekhoorn publicly denied it, but it all seems immaterial in any case. Spyker won't buy Saab; the famous Swedish car company can now fade away into the world of automotive trivia.
But let us suppose that Spyker actually did have the money, management and stable ownership needed for a long-term turnaround project like Saab. Even then, a successful Saab rescue would have been a long-shot at best. Here’s why:
Saab can’t profitably export vehicles outside Europe. The company’s assembly plant is located in Trollhattan, Sweden. Because the Swedish krona is a strong currency, it is difficult – perhaps impossible – to sell Saabs at a profit in the United States. Other European automakers like Daimler AG, BMW and Volkswagen insulated themselves from currency fluctuations by building assembly plants in North America. Saab doesn’t have the money.
Saab isn’t the only European automaker to come to grief over currency fluctuations. Sweden’s other storied automotive brand – Volvo Cars – is up for sale in part because it can’t profitably export cars to North America.
Saab is too small. Last year, the company sold about 93,295 vehicles, accounting for a small percentage of total GM sales. Saab can’t spread R&D costs for the 9-3, the 9-5 or any other model across half a million units in the fashion of a Volkswagen, Toyota or Ford.
Sweden doesn’t want to be the owner of last resort. Despite our stereotype of Sweden as Europe’s experiment in socialism, that nation’s current government is conservative. If an automaker doesn’t step up to buy Saab, the government won’t fill the void. Don’t expect an Obama-style rescue.
It’s a sad end for a storied brand. While I never cared for the company’s “Born From Jets” slogan, that ad campaign actually does have some basis in reality.
In 1944, the Swedish Aeroplane Co., an aircraft manufacturer for the Swedish air force, decided to diversify into the auto business. Sixteen engineers built a concept called Project 92, which morphed into Saab’s first production sedan in 1949.
Saab’s durable vehicles were designed to survive Swedish winters, and they spawned a list of industry innovations. With its streamlined steel body and smooth underside, the Saab 92 had a 0.32 coefficient of drag – one of the most aerodynamic vehicles of its time.
In 1958, the GT 750 was the first production vehicle to boast factory fitted seatbelts, and in 1967 the Saab 99 featured crumple zones in the front and rear.
Saab’s reputation as a cold-weather brand found a receptive audience in the northeast United States, and in 1989 General Motors bought 50 percent of the company for $600 million.
General Motors acquired the rest of Saab in 2000, but it soon became clear that GM had no idea how to nurture Saab’s quirky reputation. In 2004 they launched the Saab 9-2X, a rebadged Subaru Impreza which wags soon dubbed a “Saabaru.”
Then there was the Saab 9-7X, a thinly disguised Chevy Trailblazer. To establish the truck’s Swedish credentials, GM’s brain trust put its ignition near the floor. Oh yeah, that’ll do the trick
Sure enough, Saab has not made any money since 2001. Reuters reports that it lost $392 million in 2008, with a similar loss expected this year.
In 2009, GM put the company up for sale, and the vultures started to circle. Swedish sports car maker Koenigsegg Automotive AB placed a bid for Saab, but backed out in November when negotiations started to drag.
Then Beijing Automotive purchased the tooling and technology for the old Saab 9-3 and 9-5, which it will use to launch its own car brand in China. And Spyker showed up with its Russian backers
Which leaves us with one last question: Now that Saab dealers are unloading their inventories, should consumers take the bait? At first blush, the answer seems to be yes. The 9-3 and 9-5 are perfectly good cars, and the discounts are the auto industry’s version of a yard sale.
If you can find an unsold Saab 9-7X – a vehicle with a list price of $43,400 – you can get it for as little as $30,000. Saab dealers are offering discounts of $12,000 or so for a 9-3 with a starting price of $30,360.
Okay, so the price is right. The warranty is solid, too. A GM spokesman tells me the company will honor the warranty, no questions asked. And if a Saab dealership in any given area shuts down, another GM dealership will handle any warranty repairs. After the warranty expires, GM no longer is obligated to stock repair parts. But aftermarket parts suppliers will step up and sell parts.
Industry analyst Jesse Toprak of the online pricing guide TrueCar.com says buyers shouldn’t be worried about the warranty or the availability of parts. “If a Saab fits your needs, the price definitely cannot be better,” Toprak said. “If you want to keep the car for five years-plus, they are one of the best buys we’ve seen in a long time.”
As of Nov. 30, Saab had only 2,095 vehicles in stock, so don’t dither. And if you do purchase one, you’ll own a piece of automotive history. Most likely, this is Saab’s last roundup.
Read More about Saab:
- Beijing Autos To Buy Saab Technology
- Research New Saab Cars on AOL Autos