Bankrupt Saab Suspends Warranty Coverage

It has been a long time coming, but Saab’s curtain call seems to be just around the corner. Yesterday, Saab filed with the Swedish courts for bankruptcy proceedings. Today, Saab North America announced that all Saabs sold from December 19th forward will not have warranty coverage. This move follows a significant period of financial turmoil for the brand as they continue to struggle after being sold by General Motors in 2010. It is not known at this time what will happen to Saab post bankruptcy, but suspending warranty coverage is not a promising sign of Saab returning to produce cars any time soon.

Initially killed by GM post bankruptcy, Saab was rescued by small time supercar manufactuer Spyker in 2010. From there, they debuted the GM-developed 9-5 and the refreshed 9-4X. Saab even hired ex-Pininfarina designer Jason Castriota to pen an evocative supercar for the 2011 Geneva auto show in order to garner some marketing steam for the reinvigorated brand.

However, the champagne had barley been popped before reality set in. First and foremost was their weak product lineup. Although Saab had two new products, their bread and butter sports sedan the 9-3 was ancient, and a predecessor was years away. A smaller mini competitor, the 9-2 was penned as well but also too far away for viability. Sales were shrinking, and most of Saab’s customers fled the brand long ago for more prestigious marquees, such as Audi.

A search for viable financiers also hinder Saab’s second chance. This lack of capital caused them to teeter on the edge of bankruptcy for months as they struggled to pay suppliers and workers. Production was halted, suppliers sued, as Saab continued to look for financial backers. One source was Russian financier Vladimir Antonov, but that deal was struck down by Swedish courts for Antonov’s alleged connections to the Russian mafia.

Saab then looked to China to find such a partner. Talks sputtered for months, and the most recent deal was struck down by former parent General Motors. GM feared that the technology they developed for the 9-5 (the Epsilon II platform that underpins many GM products) would be stolen right from under them by Saab’s Chinese partner. After those talks fell through, Saab had no choice but to declare bankruptcy.

Saab is not officially dead, but a call to void all new warranties is a less than promising move. Saab has a storied, and an interesting product, but it was neglected for far too long to be able to compete with other luxury brands. Customers loved it when they had to price car insurance. In the end, they was just no place for them in the marketplace.

  

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