Saab suffering as production slows

  • Firm attempts to reassure customers as production stops
  • Lack of money means parts suppliers withholding orders
  • Saab insists customers will not have to wait for their cars

Saab's chairman Victor Muller is insisting his company "is not on the verge of collapse" following claims it may go bankrupt within a matter of days.  

Last week, production at Saab's Trondheim factory was halted several times as parts ran out after Saab failed to pay its suppliers. Partial payments were made and production was restarted. However, production was later halted again as several suppliers withheld deliveries due to lack of payment.

Despite these problems, a Saab spokesperson told us that anyone who has ordered a car from the company should see no delays in it being ready and if they did it would be a matter of days.

If the company was to go under, existing Saab customers need not worry about any warranty or maintenance issues - the majority of parts are made and supplied by third party companies, which will continue to manufacture spares. At the same time dealerships have obligations to make sure that any warranty issues are resolved.

Even in the worst-case scenario, like the collapse of MG Rover, dealerships covered affected cars with third-party warranties or paid for any repairs that were necessary. Additionally, many Saab dealerships are multi-franchise branches and will remain open and in a position to service cars.

Louise Wallis, from the Retail Motor Industry Federation, commented that "Saab dealers will do everything to ensure their customers are not left in the lurch."

Spyker, which took control of Saab in 2010, has suffered heavily from taking on the company. It sold 20,000 fewer cars than initially expected and had to sell its own sports car company in order to cover debts related to Saab.

It also made a loss of £190 million in 2010, and expects to make a further loss in 2011. Saab hopes that the launch of the all-new 9-3, and several other products, will result in a profit for 2012.

Spyker says that there is enough money to cover Saab's immediate needs but there are question marks over the long term future of the Swedish automotive manufacturer, given its considerable outstanding debts which already total more than £350 million.

Saab had no official comment on the matter, yet said that there had been interruptions to production and that they were working through financial issues.