Europe's worsening debt crisis, the rising fear of a global double-dip recession, a slowdown of China's growth, and rising raw material costs mean tough times for even the most successful automakers, and for a struggling brand like Saab the troubles could deliver a fatal blow.
It has been a brutal year for the Swedish brand, which has now won a reprieve after a Swedish court granted it protection from creditors while it awaits funding from Chinese investors.
How did Saab end up in this mess? There are three key reasons.
1. Product: No brand can survive with a portfolio consisting of two lines. Add to that, the 9-3, launched nine years ago, is long overdue for an update, as was the 9-5, which was sold for 13 years – two life cycles – before the new generation arrived last year.
2. Brand: To fix the problem mentioned above, Saab's former owner General Motors launched the 9-2X, a rebadged Subaru Impreza a.k.a. the Saab-aru, and 9-7X, a rebadged Chevy TrailBlazer. This move upset Saab's core customers, who cherish the brand's quirkiness, and it did not win any new customers.
3. Production: Doing business in Sweden is costly. Wages are high. Taxes are high. Muller said the company's break-even annual sale level was 80,000, a number that must make GM executives shake their heads in disbelief as this is only half as much as in the past.
Today, more and more dealers and customers are losing faith in the brand. That would be a tragedy for Saab's 3,700-person global work force, of which 3,500 are based at headquarters in southwestern Sweden. Saab's 900 dealers and 800 suppliers also would suffer.
What would make a shutdown even more frustrating to Saab fans is that the company is not far from reversing its product problem.