Koenigsegg Plans to buy SAAB

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Swedish sportscar maker in bid to save SAAB
June 13, 2009 - 10:54AM

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Koenigsegg Automotive, which takes a year to sell as many cars as General Motors Corp. does in a minute, is betting it can succeed where the US automaker failed for two decades: turning around Saab Automobile AB.

The Swedish maker of sports cars that nudge 400 kilometers (249 miles) an hour on the speedometer and carry a $US1.2 million ($1.5 billion) price tag is the preferred bidder for the Trollhaettan, Sweden-based company, according to a person familiar with the plan. GM, which is under bankruptcy protection, has put Saab up for sale.

Buying Saab catapults Koenigsegg into the mass market from a niche of hand-built super cars made from composite materials such as carbon fiber at a fighter-jet hangar in southern Sweden. Koenigsegg had 45 full-time employees last year, or about 1 per cent of Saab's workforce at the Trollhaettan factory, also in southern Sweden. Koenigsegg has capacity to make seven cars at a time, while Saab churns out more than 100 vehicles every day.

``It's quirky and Swedish, and those are the brand values that Saab needs to return to,'' said Paul Newton, an automotive analyst with IHS Global Insight in London. ``GM hasn't handled Saab well. It's a damaged brand, but there's potentially great value there.''

GM bought Saab from Sweden's Wallenberg family in two steps starting in 1990, betting the brand would widen GM's appeal with buyers seeking European turbo-charged, aerodynamic cars. Saab remained unprofitable throughout most of the GM ownership, as competitors including Lexus populated Saab's niche and buyers balked at GM's push to share components across different units.