Blog : Endgame – Saab files for bankruptcy

If you’re a car nut, then you won’t be mourning, too much, the passing of former Czech president Vaclev Hável. Or, for that matter, Kim Jong Il. It’s Saab that has finally died as it files for bankruptcy after GM, which still licenses key technologies to the Swedish firm, vetoed its sale to Zhejiang Youngman Lotus Automobile.

GM has a JV with SAIC, the Shanghai automaker, and believes that if those technologies were to find their way into the hands of a small upstart Chinese rival, it wouldn’t be to its advantage. Saab, which had been teetering on collapse since March, when it first stopped production, decided to call in the receivers today.

GM had issued a statement at the weekend, saying, ‘Saab’s various new alternative proposals are not meaningfully different from what was originally proposed to General Motors and rejected … Each proposal results either directly or indirectly in the transfer of control and/or ownership of the company in a manner that would be detrimental to GM and it shareholders. As such, GM cannot support any of these proposed alternatives.’

Swedish Automobile, the parent company of Saab, responded, ‘After having received the recent position of GM on the contemplated transaction with Saab Automobile, Youngman informed Saab Automobile that the funding to continue and complete the reorganization of Saab Automobile could not be concluded.

‘The Board of Saab Automobile subsequently decided that the company without further funding will be insolvent and that filing bankruptcy is in the best interests of its creditors.’

GM, in the two decades in which it owned Saab, failed to turn a profit with the brand. However, its parting gift, the new 9-5 saloon, was heralded by some fans as a return to form for the company. Hopes were high for it, and the 9-4X crossover, helping Saab back into a position of strength.

It’s easy to do a post mortem now, but the failure could be levelled at GM’s misunderstanding of the Saab brand. It may have been sensible to shift Saab models on to Opel platforms for economies of scale, but, in doing so, the cars lost some of their character. The lowest point was when GM created a rebodied Subaru Impreza and called it the Saab 9-2X, which fooled few buyers—one has to remember that Saab buyers tended to be well educated. Saab never fitted well in a business which targeted the mainstream: its own cars were always bought by people who enjoyed their quirkiness and the fact they did not follow convention.

GM only understood this when it was far too late, as the last two models demonstrated.

When GM itself had to file for bankruptcy protection in the US in the late 2000s, Saab, Pontiac, and Saturn were the victims.

When Saab was sold to Spyker, its boss Victor Muller invested heavily into the business to try to turn it around—but he, and other investors, would have lost tremendously today. Saab fans will likely remember Muller favourably—after all, he put his own money into the business and shared his supporters’ passion—but in a world where break-even points are at hundreds of thousands of units, Saab’s 30,000 in 2010 were never going to be enough. MG Rover Ltd. collapsed with 2004 sales of 115,000 in 2005.

As hindsight is 20-20, Saab and Youngman might be accused of wishful thinking, believing it to be unencumbered by GM’s IP rights. However, the American business held the right of revocation over key licences that make up Saab’s 9-3, 9-4X and 9-5 models.

It’s not the first time intellectual property has got in the way of car businesses. One of the most famous examples was BMW arranging with Rolls-Royce trade mark owner Vickers plc to license the brand for motor cars, as Volkswagen negotiated to buy the Rolls-Royce Motors business. And all Volkswagen really had to do to find this out was visit the Rolls-Royce website home page at the time: right at the bottom, stated clearly, was the message that the Rolls-Royce brand was licensed from Vickers plc.—Jack Yan

This article originally appeared at Jack Yan’s blog.

Jack Yan


  1. So sad that the only thing, really, in the way of SAAB’s rescue was business pure and simple. No respect for such a great marque what so ever.
    I hope you’re happy GM.

  2. Very sad indeed to see Saab finally call in the receiver. A great marque and one with a special place in my family’s motoring history.

    Comparisons with Rover – It had something special, a unique appeal but insufficient funds for new model development. Like Rover it could achieve amazing results from its limited resources. However, like Rover nobody with financial clout could see the potential and/or manage, develop it effectively.

  3. I own a 92x Aero. Best Subaru ever built. Great looks, better interior, and sti steering to make it better than the wrx estate.

    Yeah, not a SAAB, but a good job with what they had. The 97x is the lowest point: a rebodied Chevy Blazer. At least Subie shares a rallying heritage.

    The 92x was cheaper used–and still cheaper to insure–than a wrx wagon/estate. What a bargain.

  4. What a sad day for SAAB and it`s fans. I live in Norway not far from Trollhettan, and i know that this will have a huge impact on the region.The southwest of Sweden is the region in Europe that relies most on automotive industry.Even more so than regions around VAG plants in eastern Europe.
    And also the Trollhettan plant is state of the art, one of the most efficient and modern assembly plants in Europe.
    But i must admit that i`d lost hope even before this news,
    GM would never give their technology away to a competitor just to be “nice”.

  5. @Scott

    I’ve heard of Subaru owners importing 9-2X interior parts as they’re nicer than the usual Scooby fare.

    Wasn’t the first time Saab had badge engineered a car, Saab 600 anyone?

    What a shame. Didn’t even know the new 9-3X existed, and according to a local dealer’s website, the 9-5 SW was on it’s way. The renderings for the new 9-3 looked great in an updated traditional 900 way, and the 9-1 was to be their DS3 MINI competitor.

  6. I think the lowest point was the Saab 9-7x. At least the Subaru is in itself a technically interesting car with a clearly defined identity.

  7. GM never understood SAAB and their customers. I think they only bought the company because they saw Ford buying up Jaguar, Volvo etc. They acquired SAAB but didn’t know what to do with it.

  8. GM have acted like BMW – buying a foreign firm, later dumping it and putting thousands of workers not in their own country on the dole. Peugeot not much better closing Ryton. All three know they’ll do all right. Plenty of British people wiling to buy BMWs, Peugeots and Vauxhalls regardless.

  9. A very sad loss if thats Saab vanishing in to history also. he new Models look superb and if I could afford one it would be my car of choice over all others!

    GM did not get Saab or what it stood for and the cars became a bit nasty when they were Vectra based.

    You wonder how companies like Kia, Hyundai and the likes can be on the up and companies with real history, heritage and know how can be getting it so wrong (GM)?

  10. I live in the Chicago burbs. In a local mall they have a brand new Saab that has been sat there for months as a prize in a competition. Wonder what will happen to it?

  11. The reality is that there was little market left for Saab cars for a number of reasons. They were ending up well below the break-even point of any hope of profitability, and too many of their cars were basically badge engineered GM cars. One tweak is that some early production new model ones made in mexico will end up going to the auction houses her in the USA. Probably they will not bring in any decent money. No one needs to go broke in the car business and GM had to make a decision to not hurt themselves in China with their lack of morality as to stealing IP.

  12. I think GM’s decision to protect its IP rights in China is entirely understandable and any company would have taken such an action. I wonder if SAIC looked at buying SAAB? Given their relationship with GM it might have made sense and GM might have felt more comfortable with a SAIC-owned SAAB.

    SAAB got too small years ago before GM bought them. Sadly GM failed to grow SAAB and make it a stronger company. The 9-3 was a sales success initially but GM should have built on that success by bringing new models to market sooner. Clearly GM management weren’t the best. They screwed up GM in the US and just about all their foreign operations (SAAB, GM Europe) ended up as basket cases.

    @8 – BMW’s ownership of Rover was disastrous but, on the otherhand, MINI has thrived under them. It’s too simplistic to argue that foreign ownership is to blame for companies closing in the UK. If UK operations are successful then they’ll stay open, if not (and Rover is a prime example of this) they are always in danger of being shut down. In the 1970s, BLMC cut loose their Belgian, Italian, Spanish and Australian offshoots because of lack of viability. Any company will do what it has to do to survive.

    @9 – Hyundai and Kia are thriving because their products are well made, competitively priced and backed by tremendous warranties. They are volume manufacturers but their cars feel more like so-called premium cars. They give people what they want (hatchbacks, saloons, people carriers etc.) and, like Skoda, can rightly claim to be manufacturers of happy customers. GM in the US failed because it ended up making its money in the finance business (car leasing, HP etc). They didn’t pay enough attention to their product and assumed that people in the USA would just keep buying GM vehicles no matter what. The problem was the Japanese manufacturers built better cars faster and cheaper than GM and those cars were more suited to their customers needs. Heritage counts for nothing if the car isn’t right.

  13. @David, yep unashamedly, even the brochures said ‘Saab-Lancia’.

    The 9-2X was a bit more sneaky, it was sold as a Saab but was blatantly an Impreza estate with a new grille!
    A bit of an interesting proposition though, as both marques had rally heritage.
    Then there was the 9-7X, a GM SUV with a Saab grille, and the shortlived 9-4X.

    I didn’t realise the 9-3X existed until the last week!

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