Bailout Blues: GM lost $5,100 US on each Saab it sold

Perhaps this is why potential saviours Koenigsegg wants to double the price of Saabs.

According to the Swedish government and their consulting firm KPMG, parent Government Motors had lost $ 5,100 US on each Saab it sold during the last eight years.

I’ll let the business press figure out whether or not this is all a bit of creative accounting to make sure Saab gets the EU to approve the Swedish government’s guarantee of a loan to Koenigsegg group. But it makes you wonder how Saab can survive moving forward.

The only good news? GM has hard a time selling Saabs. Imagine the losses if it had sold more.

Even with up to $10,000 discounts, only 41 Saabs were moved last month in Canada—less than the number of Panameras Porsche moved. In fact, for the first 10 months this year, Saab Canada sales are down by half.

Look. We all know under GM’s watch Saab’s so-called premium products became nothing more than gussied-up, mainstream Opel Vectras. But that’s the game Honda’s Acura, Toyota’s Lexus, and Nissan’s Infiniti plays as well. Now please, you can’t tell me Honda loses over five grand on each Acura TSX (nee Euro Accord) it sells.

So what of this KPMG report?

Do you really think what few Saabs were sold really cost GM $5,100 US each?

And if so, does Saab have a future selling cars for profit?

[Source: di.se via TTAC ]

Comments

[RP]

I'd like to know how they came up with that figure. Also, Saab was probably never selling enough to cover its fixed costs, so if they sold more, the loss per vehicle would be less. GM fumbled the ball with Saab right from the start. They didn't sell because they didn't keep them competitive. If they had invested the money Saab needed in the first place it could have been a success.

The Koenigsegg led Saab has cleared a lot of long term debt after coming out of bankruptcy. One hopes this will make it easier for them to make a profit and keep prices down at the same time.

[Swade]

John,

The report also found that Saab was not in any financial trouble in the time that it examined (which was the whole purpose of the report). As RP notes in the comment above, there's also no rationale given for the supposed losses.

Many commentators on other sites have asked the question that you've failed to ask here - why? There are currency issues in selling from Sweden into the US, for sure, but there's also the GM issue.

Call it creative accounting, call is the wonderous world of conglomerate business. Whatever you call it, GM didn't mind if Saab showed continual losses.

Saab have had a very efficient plant for the last 5 years and achieved highest ever sales during that period. Something smells, and it smells more like the Detroit River than herring.

[Scoobs]

And we all know that Toyota and Honda make a profit on every Prius and Insight they sell, Right?