US dealerships face inventory problems as Saab suspends warranty coverage

Article by Christian A., on December 27, 2011

Detroit-based Saab of Troy, the largest Saab dealership in the U.S., has around 60 Saab units as of last week and at least another 50 in his loaner fleet, according to Tony Malouf, the dealership's general manager for more than ten years. That is around $4 million worth of inventory.The showroom of the dealership, which is part of the 11-dealership Elder Automotive Group, may be filled with 2011 Saabs but it doesn’t have a lot of customers. But Malouf remains positive even as the automaker is likely heading toward liquidation.

Early last week, Malouf sold two units even with Saab's Dec. 19 bankruptcy filing. He related that the dealership interest has gone up because customers see it as their last chance to purchase a Saab.

Malouf further narrated that the automaker has suspended warranty coverage on all units sold in North America as of December 19. Dealers were instructed to sell the vehicles "as is."

The automaker is also suspending the processing and payment of all warranty claims. However, former Saab-owner General Motors revealed that it would honor warranties on all models which were sold before February 2010. This was the time when Victor Muller's Spyker Cars NV purchased Saab from GM.

Additionally, Saab's 188 dealers in the U.S. were also advised that all factory incentive programs and payments to them have been suspended. This means that the dealerships have to shoulder the cost if they want to stick by the fire-sale deals they got draped over the Saabs on their floor.

Malouf stated that they are still reviewing their alternatives regarding how to unload the inventory. He is also seeking jobs elsewhere in the dealership group for the almost 40 employees working in the Troy store and another smaller Elder-owned Saab dealership in Detroit. [source: Autonews]

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