By on November 17, 2009

(courtesy:saabhistory.com)

Swedish business site di.se has done some numbercrunching, and figured out that GM has lost SEK 35,000,- (eq aprox $ 5,100, at the current exchange rate) on each Saab sold the last 8 years. As many of TTAC’s readers have pointed out in various comments, GM never made money on Saab. Truth is; they lost a total of SEK 39 billion (3.9 billion Euros) during their ownership, according to di.se’s analysis . The last 8 years has been heavy; a loss of SEK 32,2 billion, or 35.000,- kronor on each Saab sold. That’s $ 5.100,- on each car. This year alone GM has had to take an SEK 6.2 billion cost on the ailing carmaker, SEK 5.2 of those are amortization of debts.  This is why it’s crucial for Koenigsegg Group that the EU commission rules that Swedish government’s guarantees on Koenigsegg’s loan from the EIB are not subsidies. But since Saab has been on life support for so long, it would be almost impossible to defend Saab as a healthy company, and without the Swedish government’s guarantee, the financial plan from Koenigsegg Group will fail. Maybe they can argue that when it comes to Saab, there are no subsidies, just business as usual.

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27 Comments on “GM Lost $5k On Every Saab Sold In The Last 8 Years...”


  • avatar
    superbadd75

    Saab’s dead body has been dragged along for several years now, please just go ahead and bury it now. It’s over.

  • avatar
    gslippy

    If they had only sold more cars, they could have made up the losses through volume. :)

  • avatar
    dlfcohn

    No doubt Saab proved a poor investment for GM.
    Here is the thing though: be careful how much weight you put on estimates for profits and losses, such as the one reported here.  Major corporations regularly find it convenient to pool losses in one jurisdiction, one subsidiary, or another.  Likewise, they sometimes prefer to pool profits elsewhere.   There are in fact countless ways that a profitable company can be made (in accounting terms)  into a loss-making one, or a loss-making one into a bigger loss-making one, when it suits the needs of management and the dominant shareholders.  The reason behind this is usually taxes, or more precisely, the desire not to pay them, but there can be others as well.

  • avatar
    John Horner

    While dlfcohn is correct about the ways companies move numbers around, I highly doubt creative accounting has been required to show losses at Saab. Just look how much cash on the hood has been required to move the meager number of cars they have sold.
    Want a new Saab 9-5? Expect a discount of at least $9,000 off MSRP!
     

  • avatar
    Rusnak_322

    They should have paid me $4k to not buy one.

  • avatar
    CyCarConsulting

    For any hope of survival, Saab really needs some styling engineers, not some pipe smoking professor, who in his spare time, makes drawings of cars he would like.

    • 0 avatar
      psarhjinian

      I don’t think you can blame the pipe-smoking professors for anything since the 99/OG900.
       
      Everything since has had someone else’s sticky fingers in it.  Sometimes this wasnt’ so bad (the FIAT-cosponsored 9000, the 9-3SS up to 2006, the 9-5 wagon to 2005), but the more recent examples (the post-facelieft 9-5) are what happens when your school of design is limited to slapping brand-cliché detailing on a platform not suited to it.

  • avatar
    snabster

    These losses are suspiciously high.
    During GM’s period of full ownership, SAAB introduced one new car (the 9-3 in 2003) and some of the developmental  expenses were done before GM took full ownership in 2000.  The 9-2 and 9-7 were quick and dirty rebadges.
    I’m not going to pretend GM did well with the SAAB brand, but I have a suspicious that internal corporate tax-shifting accounting and an unfavorable exchange rate vs the dollar, pound and euro (three biggest export markets) are the primary villains here.
    I am far more worried about the lack of pipeline (no new 9-3 until 2015?), crippled reputation due to bankruptcy, and massive trimming of the dealers in the US as barriers to a SAAB rebirth.
     

  • avatar
    another_pleb

    Saabs are known the world over for their robustness, high-performance, flexibility, agility, ease of repair and low purchase price compared with similarly specced competitors such as the F-16 and Eurofighter. The cars on the other hand…

    Nice Viggen in the background though.

  • avatar
    AJ

    How ironic, as I have a socialist neighbor that has told me that she doesn’t believe in businesses making a profit. Hum… Maybe this is why she owns two Saabs?

  • avatar
    Robert Schwartz

    It is a good thing GM did not sell more SAABs.

  • avatar
    FreedMike

    Here’s the problem with Saab: they hit it big with performance buyers in the ’80s because of turbocharging. No one cared that the cars were ugly and weird – for the time, they went like stink, and very few others did, so they sold. Then something bad happened: everyone else caught up. In the meantime, the cars still remained ugly and weird.

    Not sure what GM saw in this company in the first place, aside from a place to sink some SUV profits…

  • avatar
    vww12

    Wow, at some point some marketing genius spent the $$$ to fly a Viggen on US airspace?
    No wonder things turned out as sadly as they did.

  • avatar
    Aardvark

    SAAB, RIP.  If GM genuinely lost that much money on Saabs, it serves them right.  They managed to take a quirky and authentic brand and turn it into the same crap they were selling here in the US with only a slight Scandinavian accent.  Saturn/Saab — no problem, just change the badges. 

    Ford may not have brought greater glory to Volvo, but at least they didn’t screw up the brand so much that only a sucker would buy one. 

  • avatar
    MikeInCanada

    I was hoping to see the after effects of the Viggen in the picture dropping a JDAM on the RenCenter.  Danger Close!

  • avatar
    saabista63

    There hasn’t been – uh – too much of an opportunity of SAAB-bashing lately, so I can imagine it was high time to – oops – do it again: SAAB is too quirky/not quirky anymore, therefore bury it NOW!
    Some people will never get it …  why some other people still like SAAB. That’s the bad news.
    The good news is: They don’t have to. There is millions of other cars around for them, some less and a lot even more ugly than any SAAB has ever been. There were not even 100.000 SAABs built in 2008. There will be a lot less this year. I really don’t see what kind of threat SAAB is for the automotive industry, for the planet or mankind. And even if some SAAB owners are socialists: If I remember correctly, the Berlin Wall came down twenty years ago.
    So, folks, put down your guns and let our favourite brand be what it is: quirky, ugly and strange. We wouldn’t like it any other way.

  • avatar
    cwallace

    Psh, I lost way more than that in depreciation and bizarre system failures on my Saab.

  • avatar
    ChristyGarwood

    I quote TJ “…figured out that GM has lost SEK 35,000,- (eq aprox $ 5,100, at the current exchange rate) on each Saab sold the last 8 years. ” 

    Why would the current exchange rate be used to determine a loss for what was sold over the past eight years?  Wouldn’t the real financial impact be calculated using appropriate exchange rates as they varied over time?

    If anyone is interested in what Saab owners think of their vehicles, check it out on Kelley’s Blue Book some time.  Anecdotally, I can say that whenever anyone gets in and drives a 9-3 or 9-5 with a four cylinder turbo, they are always pleasantly surprised at how fun those cars are to drive.  Acceleration off the line is great, cornering is awesome, highway driving is like floating on air – and for some reason those engines just find their own groove around 80-85 mph.  And yet FE is a good 30 MPG highway. 

    Full disclosure – I am a GM employee whose hubby has bought 3 9-5 Sedans over the past nine years (he likes to drive new cars) and I bought the 2008 9-3 Convertible. 

    But my anecdotes above are from men who live/ drive in Manhattan, Long Island, New Jersey, SE Michigan.   Just like most GM vehicles, went a person gets in and drives a Saab, they like it.

    • 0 avatar
      bill h.

      ChristyGarwood–knowing of what you speak, I can only say that when it comes to car “discussions”, one never lets the actual driving of a car get in the way of one’s prejudices about a marque.

    • 0 avatar
      Thor Johnsen

      @ ChristyGarwood:
      The article was originally produced by swedes and all amounts were stated in swedish kronor – SEK – so I exchanged them into Euros or Dollars to make it easier to relate to for US- and wolrdwide readers. That’s why the “current exchange rate” was mentioned.

    • 0 avatar
      majorfrn

      Bill H you cracked me up:
      “ChristyGarwood–knowing of what you speak, I can only say that when it comes to car “discussions”, one never lets the actual driving of a car get in the way of one’s prejudices about a marque.”
      Exactly.  There are good reasons (besides random mental issues) why people drive Saabs.  I can afford a BMW, etc. no problem.   I just like Saabs.  My 9-5:   Totally hits its stride at 80-90.  65 is just loping along. Rock solid freeway ride and handling.  Excellent braking. Built like a tank.  Great city car.  Excellent mileage for its class.  Vast trunk. Interior finish durability second to none.  Great ergonomics including some of the most comfortable seating you’ll find in any car.
      It is also an appealing car to anyone interested in pure design.   Becomes very obvious when you spend some time in one that a LOT of thought goes into the details.  Interiors don’t feel cheap or cold…etc.
      Yes, unfortunately maintenance costs are high…until that gets fixed Saabs will  have a tough go of it in the mainstream market.  Good luck to them.
       
       

  • avatar
    mpresley

    I owned a 9-3.  It was  a lot of fun.  My MG Midge was a lot of fun too, but I’m glad Leyland is dead, too.

  • avatar

    Lests not forget the badge-engineered abominaiton that was the Saabaru. How much did that cost Subaru in lost WRX sales and brand degredgation?

  • avatar
    50merc

    Accounting trickery can shift income from one year to another, but not perpetually unless Sweden’s tax authorities are completely hapless.
    Saab’s history of losses exemplifies the old saw, insanity is doing the same thing over and over, while expecting a different result. GM’s “Board of Bystanders”–how very true.


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