Saab struggles to break even

Saab only just survived sliding into insolvency in early 2010. But its worries aren’t over. Recently the firm has had to stop its assembly line because unpaid suppliers had halted shipments of parts and materials.

The company is now owned by a Dutch entrepreneur who unexpectedly bought the business from General Motors. He insists that the firm will soon break even (it ran up huge losses under GM) according to The Economist.

Saab have a whole host of new models including a “crossover-utility vehicle” (an ordinary car made to look like a rugged off-road vehicle) and have set up new distribution arms in China and Russia, two big markets hungry for fancy cars. The idea is help Saab gain enough momentum to push its total sales to around 80,000 a year, the point at which it should break even. Last year the company, having hoped to sell about 50,000 cars, managed to shift only 28,000.

It’s a race for Saab to hit this level of sales because until they do so, losses will only grow. The firm’s owner is looking for other new shareholders who can help him provide enough finance to tide the company over until break even is achieved. However, Saab still has more than €200m left from a loan provided last year by the European Investment Bank (the European Union’s development bank). The company appears to be gaining strength; its sales in America, in particular, seem to be recovering quickly. But it is in a race against time: models need to start flying out of the showrooms before it runs out of money.