General Motors' announcement on Friday that it will wind down its lossmaking brand Saab Automobile brings an end to the iconic Swedish brand after six decades of car manufacturing. GM said in a statement Friday it had failed to reach an agreement with Dutch sports car maker Spyker on a sale of the division, just three weeks after another luxury car maker, Koenigsegg of Sweden, withdrew its bid for Saab.
The Detroit auto giant acquired Saab 20 years ago, but the take-over was never much of a success for either party. In 2008, Saab, which currently employs 3,400 people in Sweden, posted a net loss of 3.0 billion kronor (241 million euros, 341 million dollars at the time). It last made a profit in 2001, the only year it was in the black in almost two decades of GM ownership.
An ageing product line and a collapse in demand owing to the tightening of available credit hurt Saab's sales in recent years. In 2008, Saab made up 1.1 percent of GM's global sales, selling 93,295 cars world-wide, compared to 133,000 two years earlier. The automaker last brought out a new model eight years ago, the 9-3 in 2001, while its other flagship car, the 9-5, was last replaced in 1997. It is currently in the process of launching its new 9-5 model.
In the highly competitive auto industry, the average life cycle of a new car is five to six years. Saab started life in 1937 as an aircraft manufacturer - something which became evident in the aerodynamic, sporty shape of its first concept car designs. The company built its first prototype cars in 1947 with the first production version rolling off the assembly line two years later.
It main production headquarters are in Trollhaettan, a town of just 55,000 inhabitants in south-west Sweden. Saab's glory years came in the 1980s when a weak Swedish krona helped boost sales in its export markets, the US and Britain, where it gained a reputation for its turbocharging technology. GM bought 50 percent of Saab Automobile from Saab-Scania in 1990, snapping up the rest of the company a decade later. The US auto giant wanted a premium marque to add to its wide range of brands, while Saab would gain better economies of scale by being part of a larger company.
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