Saab and Volvo for sale: any buyers?

Saab and Volvo are up for grabs because their owners, General Motors (GM) and Ford respectively, can no longer afford to keep them. But there are important differences. GM is desperate to sell Saab and raise the funds it needs for survival. Ford’s position isn’t so dire: it can probably hold out for a better deal.

GM would have gone bust without the emergency loans it received from the US government at the end of 2008. In exchange, they have to show that they have a survival plan by February 17th, or else it has to pay the US taxpayer back in March (which it can’t).

I’m sure GM wishes it were selling Volvo rather than Saab. Volvo is much bigger and more profitable. Saab has been something of a flop for GM (their boss has described buying the business as a ‘financial disaster’ but it probably seemed like a good idea at the time). According to one report, owning Saab may have cost GM up to $5 billion, and GM loses as much as $5,000 on every Saab it sells in America. GM once saw Saab as a potential rival to BMW.

Volvo, which Ford acquired in 1999 for a hefty $6.45 billion, has been a disappointment rather than a disaster. The company has been modestly profitable for much of the time Ford has owned it. But the losses have been mounting, especially in America because of the weak dollar. In 2007, when it had its best-ever global sales performance, Volvo still lost $164m.

So which car firm would want to buy up either brand? There’s no one rushing up with their wallets open, unsurprisingly in these exceptional times.