Car maker Saab on the brink of collapse

Iconic Swedish car marker Saab is on the brink of collapse after a deal to buy the brand from its struggling owner General Motors collapsed overnight.

Swedish car maker Koenigsegg had been set to buy the company and revitalise the brand, but pulled out of the deal citing issues with the length of time it had taken to get the sale over the line.

The collapse of the deal could be bad news for Saab’s Australian operations. The brand is operated by GM Holden via its local subsidiary, GM Premium brands, and there are 14 Saab dealers in Australia.

A Holden spokesman esays the company will need to wait until next week before new developments emerge.

The collapse of the deal leaves GM’s President and CEO, Fritz Henderson, with few options.

“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,” he said in a statement.

There are three real options – closing the company down, trying to find a private bidder or try and sell it to the Swedish Government, which had been prepared to back the Koenigsegg bid with a big loan.

But most car industry commentators are tipping GM will have little option but to close the doors. There does not appear to be a new bidder waiting in the wings, and Sweden’s government is refusing to take the company over, despite pressure from local unions and the company’s 3,400 Swedish employees.

One possible lifeline could come from China’s Beijing Automotive Industry Holdings, which was part of the Koenigsegg bidding group. It has said it will re-evaluate its position, but has not given a firm indication it will make a fresh bid.

GM’s board is set to meet next Tuesday to consider its options for Saab.