Koenigsegg Cracks, Pulls Out of Saab Deal

The holiday season isn't getting off to the best of starts for GM. Swedish supercar builder Koenigsegg has "terminated" the deal to repatriate Saab, leaving General Motors 0 for 3 when it comes to the selling of its non-core divisions. This includes the Penske-Saturn non-deal, along with Magna's non-purchase of Opel — although the latter was more of a case of GM reneging on the sale.

In the case of Saab, Christian von Koenigsegg, founder of the eponymous OEM, is reported in the "Wall Street Journal" as saying, "Unfortunately, delays in closing this acquisition have resulted in risks and uncertainties that prevent us from successfully implementing the new SAAB Automobile business plan."

Now, color me cynical, but I have to wonder if this is somehow related to some other recent news about Saab; namely that, when one takes into consideration GM's initial costs to buy the brand back in 1989, it turns out the General has lost more than $5,000 per vehicle on every Saab it's sold. Coincidentally, I think 1989 was also the last time the Saab 9-5 received any kind of serious update.

Kidding! But the truth of the matter is nearly as bad: The 9-5 was introduced in this country in 1999, not 1989, and its last significant redesign was ... never. The much-improved 2010 model is/was supposed to bring the big Saab into the 21st century with a thorough modernization program, but whether it actually goes on sale now is anyone's guess.

GM's handling of the Saab 9-3 was a little better, but Saab's wasn't. The current-generation 9-3 was one of the first vehicles built on GM's global Epsilon platform. Now, that platform was, in theory, going to help GM integrate its global manufacturing processes. It would put GM's mid-size vehicles in Europe and the U.S. on the same platform to save money, but allow room for fine-tuning in local markets.

It was a half step toward what Ford is doing now by introducing its own global products — like the Ford Transit Connect, Ford Fiesta and next-gen Ford Focus — here in the U.S. There are two big differences though. On the perception front, there remains a hard kernel of criticism about the General's strategy of rebadging Opels and selling them in non-European markets as products from Chevrolet, Buick and, until recently, Saturn.

But when you really think about it, this is exactly what Ford is doing with its European products — except for the actual rebadging part.

Okay, there is one more difference: When the Epsilon platform came to Sweden, Saab did more than just fine-tune it for the local market. Instead, the Swedes made significant revisions to the platform, revisions so extensive that the result was no longer compatible with other GM products. This came to a head in the Pontiac G6 hardtop convertible, which was supposed to fit on the Epsilon platform as modified for the 9-3 convertible, but suddenly didn't.

The launch of the G6 convertible was delayed, conflict with Saab grew and GM's initial foray into global manufacturing suffered a significant setback. It may also have led GM to decide the next Saab products would be a bit more tightly controlled by the team in Detroit; certainly the Saab 9-2X, a slightly warmed-over Subaru Impreza, and the Saab 9-7X, a lightly redone Chevrolet TrailBlazer, didn't offer much in the way of true Saab quirkiness.

And then the GM spotlight — and resource bank — moved on to the General's many other divisions, and the brand languished in sales obscurity until the 9-3 Turbo X debuted on the auto show circuit in 2007. With Saab's first turbocharged V-6 and a sophisticated all-wheel-drive system, the production version of the car came thisclose to giving Saab a credible entry in the European sport-sedan segment.

Of course, that was also right around the time the auto industry began to collapse.

Flash forward to today and General Motors simply does not have the cash necessary to build on what little momentum the current 9-3 and next-gen 9-5 have been able to develop. And I guess neither does Koenigsegg. Or the Swedish government.

On the other hand, Beijing Automotive Industry Corporation might. BAIC invested $400 million in Koenigsegg earlier this year, with an eye to getting in on some of the Saab action. In fact, it appeared that BAIC would begin producing the old 9-5 in China for its home market once the 2010 9-5 went on sale elsewhere. As things stand now, the Chinese company is "evaluating" the situation before taking any next steps, but it's well known that BAIC is interested in expanding westward.

BAIC got its start as the Chinese partner to Western OEMs looking for a foothold in the world's largest auto market, and has more recently been involved in the bidding for Opel and Volvo.

Plus, it's important to remember that saying "BAIC is interested in expanding westward" is a bit misleading. It's the Chinese government that's desperate to reinvent its domestic auto industry into a global player, and the easiest way to achieve that is not by reinventing ye olde wheel but by buying someone else's.

It's been a tough road for the Chinese, though. The HUMMER deal is still hanging fire, and now it looks like the Volvo-Geely deal may fall through, too.

There's also a new report that Brilliance — another major Chinese OEM — is signing up Saturn dealers in this country as a prelude to either buying the brand or bringing over its own products, but my thoughts about this are now on par with my thoughts on electric vehicles: It sounds good to me, but I'll believe it's happening when I see the first one motoring down the road.