As a new January 7th deadline looms just what is the deal with Saab?

The headline writer makes an interesting point, just what is the deal with Saab? While the brand itself could be described as “niche” is winding down the company really the only viable option?

It’s true to say that the design and aesthetics of a Saab can be described as, how can I put this, somewhat idiosyncratic but the brand certainly does have a very enthusiastic and loyal following. In fact Albert Muniz, professor of marketing at DePaul University in Chicago named the distinct characteristics of Saab ownership as “Snaabery” and Rüdiger Hossiep, a psychologist at Ruhr University in Germany, found that Saab drivers were over 10 times more passionate about their cars than the average Volkswagen driver.

Like Marmite you either love them or hate them but is there really nothing that parent company GM could have done to turn things around? The decision probably ends up saying a lot more about GM than it ultimately does about Saab as it leaves us believing that the lack of ingenuity displayed by the board in the past decade may, in fact, have been endemic.

There seems to be an element of GM just, first and foremost, cutting costs which might be considered a knee jerk reaction to recent adverse events, which is probably putting it mildly. But in reality the sums almost certainly just don’t add up.

Some may argue that Saab was unprofitable long before GM first became involved, buying a 50 percent stake in the company in 1990 for US$600 million, but they must have seen something in the brand. So we can presume someone back then at least had a vision for Saab and it’s fair to say that there have been profitable periods under GM stewardship. In fact 1995 witnessed the first profit for seven years and subsequent performance encouraged GM to buy up the remaining shares for a further US$125 million in 2000, thus taking full control.

Now we will witness, like a car crash in slow motion, the long drawn out demise of a much loved (by a vociferous minority) brand. Prior to the announcement by GM that they were “winding down operations” we had the unlikely Koenigsegg takeover discussions and then the announcement that GM would “eliminate” the brand in 2010 if a buyer was not found before the end of 2009. There still appears the equally unlikely prospect of a takeover by Dutch sports car manufacturer Spyker backed by Russian and Arabic investors, which has been given more time to conclude some sort of deal.

So all may not be lost as the new “deadline” for the future of Saab has been reported as being extended to January 7th so who knows? There may still be a stay of execution and as the Saab wind down is expected to take several months GM have also said they might entertain inquiries about Saab at any time during the wind-down process.

Meanwhile, somewhat unsurprisingly, there has been an orchestrated backlash by disgruntled Saab owners and enthusiasts (which according to the boffins is one and the same thing) as the troops are rallied to protest to their government representatives and descend upon GM’s various HQ’s but in reality it’s probably all too late.

The cold hard economics, as far as the bean counters at GM are concerned mean that Saab is just not viable and as far as vested interests are concerned GM would obviously much rather let the Swedish government make the investment required to sustain a non-viable enterprise to save Swedish jobs, which doesn’t look like it will happen.

It seems that despite a loyal following and strongly recognisable brand there just aren’t enough people in the world who want to buy the cars and the 61 percent decline in US sales in 2009 may have been the tipping point.

It does make the casual observer wonder what GM doesn’t like about the offers they have received that would lead them to think that winding down is the better option but the disposal of IP rights for the 9-5 and 9-3 models to Beijing Automotive might provide a clue.

So long Saab, it’s been an oversized steering wheel and hunt the ignition barrel blast.


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