- The Washington Times - Wednesday, June 17, 2009

Sweden wants Saab back.

General Motors Corp. agreed Tuesday to sell the luxury carmaker to a consortium led by Koenigsegg Group AB, a Swedish company that sells only about a dozen custom sports cars a year.

For GM, it would be yet another sale of a unique brand that lost its cachet in the auto giant’s mass-production culture. The deal would return Saab to Swedish control for the first time in nearly 20 years.

“Saab is a brand that is sort of iconic with a small core of consumers,” said Jeremy Anwyl, chief executive officer of the car-shopping site Edmunds.com. “GM, for good or for ill, has not demonstrated expertise in nurturing these niche brands.”

GM agreed to sell its Hummer and Saturn brands to different buyers earlier this month.

GM bought half of Saab for $600 million in 1990. It purchased the rest 10 years later for $125 million.

Saab dealers were pleased by news of a sale.

“We’re happy,” said Jenny Trostel of Anderson of Hunt Valley, a Baltimore-area dealer of GMC, Buick, Hummer and Saab.

“Having a new owner will help us with new product and hopefully will get us back with the part of the market where we need to be” - competing with Lexus, Toyota and Volvo, she said.

The preliminary deal, expected to close in the third quarter, includes $600 million in financing from the European Investment Bank, which is backed by the Swedish government. Other financial details were not disclosed. GM and the Koenigsegg consortium would provide additional funding, GM said.

A person briefed on the deal told the Associated Press that GM would get nothing initially for Saab, but would be paid $150 million - capital Saab had left over from GM’s ownership - on top of the value of Saab’s assets if the new company turns a profit. The person declined to be identified because the deal has not been closed.

Koenigsegg sells a limited number of $1.2 million high-performance sports cars per year. It was founded 15 years ago by CEO Christian von Koenigsegg, an entrepreneur and sports car enthusiast who was 22 at the time.

The company has just 45 employees and custom builds its “supercars” at a former air force base near Angelholm in southern Sweden. Customers fly in on private jets and take test drives on the runway. The cars have top speeds of up to 245 mph.

Most of Mr. von Koenig-segg’s customers come from oil-rich Middle Eastern nations, according to Swedish media reports.

Saab has more than 4,000 employees worldwide and sells cars in about 50 countries. Sales have been in steady decline, dropping below 100,000 cars last year. The company sold just 783 cars last month, a 64 percent drop from a year ago.

Saab CEO Jan Ake Jonsson said the deal would help the brand to reach its potential “through an exciting new product lineup with a distinctly Swedish character.”

Mr. von Koenigsegg, in an interview with Swedish news agency TT, rejected widespread concerns that the group may have insufficient resources to purchase Saab.

“It’s a misunderstanding. It’s not the small car company Koenigsegg that is taking over. We’re a strong acquisition group,” Mr. von Koenigsegg said.

Norwegian holding company Eker Group, which would have nearly a 12 percent stake in Saab, and San Diego-based investor Mark Bishop, with 22 percent, are also members of the consortium.

The unique Saab brand probably was not right for GM, and vice versa, from the start.

GM’s preference for “platform sharing” - building different car brands on the same chassis - clouded the “essence” of Saab, Mr. Anwyl said.

“The best Saabs that exemplified that were back in the ‘80s, featuring very advanced engineering in terms of engine technology and turbochargers,” he said.

“People with more of an engineering bent could appreciate some of the subleties that Saab offered back then. Interestingly enough, they are the kinds of engines that might be coming back into vogue today with the new [fuel-effiency] requirements and fuel prices,” Mr. Anwyl said.

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