Saab future under threat as buyer Koenigsegg drops out

By Chrissie Thompson, Automotive News

Detroit, Michigan -- General Motors Co.'s deal to sell its Saab brand collapsed when the buyer pulled out in a move that threatens the Swedish luxury brand with closure.

GM had been aiming to close a deal by the end of next month to sell Saab to a partnership led by tiny Swedish supercar maker Koenigsegg Group AB and backed by China's Beijing Automotive Industrial Holding Ltd.

"We're obviously very disappointed with the decision to pull out of the Saab purchase," GM CEO Fritz Henderson said today in a two-paragraph statement announcing Koenigsegg's decision. "Given the sudden change in direction, we will take the next several days to assess the situation and will advise on the next steps next week."

The development marks another setback for GM in its bid to shed brands as part of a more narrowly focused sales strategy after emerging from a bankruptcy in July backed by more than $50 billion in U.S. government financing.

GM also had an agreement to sell Saturn to Penske Automotive Group Inc. Penske pulled out at the last minute on September 30 because its proposed automaker partner, Renault SA, had decided it couldn't make enough money supplying Saturn with vehicles.

GM still has a plan to sell Hummer to China's Sichuan Tengzhong Heavy Industrial Machinery Co. GM is also winding down Pontiac. That will leave it with four U.S. brands: Chevrolet, Cadillac, GMC and Buick.

GM also had planned to sell a majority stake in its European Opel brand to a consortium led by Canadian supplier Magna International Inc., but the automaker decided earlier this month to keep Opel.

GM's 13-member board is scheduled to meet next Tuesday in Detroit for a regular monthly meeting and will consider the question of what to do with Saab, one person familiar with the situation said.

The brand has no other bidders, so a wind-down of Saab is likely, the person said. But ultimately, it's up to the board.

Koenigsegg said in a separate statement that it had withdrawn from the sale process, about five months after the two sides had reached a preliminary deal.

"The time factor has always been critical for our strategy to breathe new life into the company," Koenigsegg said.

Koenigsegg makes about 20 CCX and CCX-R supercars annually at its 45-person headquarters in Angelholm, on Sweden's southwest coast.

From Automotive News (A Crain publication)

www.koenigsegg.com