The mind-boggling auto industry has kept us all guessing as of late, and now GM has just confirmed that Koenigsegg has backed out of talks to purchase Saab. Of course, at this fork in the road GM is no stranger to deal falling through, and if you require proof just seek out a Saturn dealer.
GM and Koenigsegg have been in talks for quite some time, carefully pouring over the implications of what is to become of Saab. In the end, the restructuring of Saab simply proved too costly for a boutique carmaker. Koenigsegg most likely had difficulty acquiring sufficient funds to persuade the government of Sweden that it could succeed in sustaining Saab for more than a few years.
During good times, automakers can be very capital-intensive, and an investment like Saab seems risky during these difficult times. Automakers from every angle are seeing changes, from Saab to the more exotic cars, and banks are hesitant to invest it seems. Add to this idea that there is a high cost of doing business and manufacturing cars in Sweden, be it Saab or Volvo, and the end result is less than surprising for troubled GM.
All hope is not lost, however, as two more candidates have re-emerged with interest in Saab. China’s Beijing Automotive (BAIC) and Wyoming-based merchant bank Merbanco have reiterated their interest in acquiring the struggling Saab, having held out during negotiations with GM.
GM CEO Fritz Henderson had the following to say about the death of the deal,
“We’re obviously very disappointed with the decision to pull out of the Saab purchase. Many have worked tirelessly over the past several months to create a sustainable plan for the future of Saab by selling the brand and its manufacturing interests to Koenigsegg Group AB.”
It will be interesting to see who sails in to sop up this Saab story. Craving more on Koenigsegg?
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