Saab U.S. dealers running out of cars on output cuts image

Saab Automobile AB dealers in the U.S. are running out of new cars after the Swedish carmaker cut production to conserve cash and prepare for its first new model in seven years.

“We have about 10 Saabs left, and they won’t last long,” said Ivan Goodwin, sales manager at Jim Ellis Saab in Atlanta. “It’s going to be a big problem, but there is nothing we can do about it.”

Saab, which General Motors Co. is selling to an investor group led by Swedish sports-car maker Koenigsegg Automotive AB, has slowed assembly to retool its Swedish factory to build the new 9-5 sedan starting next year, spokesman Eric Geers said. The company said last week it will eliminate more than a third of its U.S. dealers. Those that have received notice that they will remain open say they may be limited by a lack of inventory.

The time it takes for Saab to deliver the new car and ramp up production of other models is crucial for dealers, whose sales have slumped since GM said in February it would cut ties by the end of 2009 and Saab filed for bankruptcy protection. Saab has also held back assembly as it waits for Koenigsegg to take over and a loan from the European Investment Bank to arrive.

“Our stockpile isn’t very large anymore as we’ve worked hard during the reconstruction to reduce it,” Geers said by telephone from Budapest, where Saab is showing the new model. “When we close the deal and change owners we can start producing again for real as we then will have financing.”

Sales Slump

Saab is struggling in the U.S., which it has identified as one of its four most important markets, announcing last week plans to close 81 of 218 U.S. dealerships. Saab sold 21,368 cars in the U.S. in 2008, or 23 percent of all deliveries. The carmaker has yet to identify which dealers will be shut, though the dealers have received letters letting them know their status.

Saab’s 10-month sales slumped 62 percent to 7,441 cars in the U.S., the world’s largest auto market. The automaker sold just 513 cars in the U.S. last month.

Source: Bloomberg