2013 Audi A3

Future for Swedish carmakers looks bleak without aid

 
2 1,332 views Dec 8, 2008

Brand sales are difficult in the U.S. and Europe, where there has been little interest thus far

Brand sales are difficult in the U.S. and Europe, where there has been little interest thus far

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Swedish carmakers Saab and Volvo are in dire straits due to the poor financial performance of their respective parent companies General Motors and Ford. When compared to one another, however, Volvo's future is decidedly rosier due to the fact that it has more models, better research facilities and a better financial history than Saab. Nevertheless both companies are in trouble and are under review by their Detroit parents, with the possibility of selling the companies not completely ruled out.

Part of the problem is the lack of cash coming into the brands. Any bailout money that the two Detroit manufacturers receive will stay in the United States, meaning that both Swedish companies need to look for partners to help them stay in business. Potential owners include the likes of Renault and Volkswagen, although no official word has been forthcoming. European firms aren't the only potential suitors, one German analyst revealed to Automotive News Europe, predicting that "either brand could be attractive to a Chinese carmaker looking to acquire a recognized brand name as well as European technology”.

The loss of the brands would not just affect the two Detroit companies, however, as the many Swedish employees would be put out of a job. The CEO of the European suppliers association stated that the loss of Volvo alone would have a devastating effect on the Swedish economy as thousands of jobs at Volvo would be lost and a flow-on effect would be felt throughout numerous areas of industry.

For this reason, the Swedish government may play a role in helping these two American-owned but Swedish based companies, as bailout money from the U.S. Congress will not be able to be used overseas. Currently, GM's Opel division based in Germany has requested the German government lend it financial aid and there may be similar plans to petition the Swedish government to help its own domestic auto industry.



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Comments (2)

  1. ma_LisaV avatar LisaV Posted: 12/8/2008 9:41am PST

    Disagree that Volvo future is rosier because it has more models.
     
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  2. By  r4 card Posted: 2/6/2010 2:13am PST

    I think Saab deserves a future. With there recent concepts along with the new 9-5 and the 9-4X I've been hoping for a big come back, I mean, they seem poised and ready, right?!?! After years of watching GM BUTCHER Saab to oblivion and now just when Saab seems to be making some stride and regaining some identity it would be such a pity to not give them a fighting chance. Their designs are such a breath of fresh air when compared to everything else.
     
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