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 United States, 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.

A court in Sweden has granted Saab’s bankruptcy petition and has appointed two receivers to administer its assets. Severely affected in the carmaker’s financial hit are dealers, including 188 in the US who are hoping to be compensated for their losses. Tim Colbeck, chief operating officer of Saab Cars North America told dealers of Saab’s liquidation on a conference call.

Saab is currently waiting for the Swedish court for further directions for its liquidation. The Saab National Dealer Council is also working with the National Automobile Dealers Association to determine their customer liability.

Saab sought court protection in September while working out a potential rescue deal with two Chinese companies. Negotiations eventually failed and ended in December after previous owner General Motors rejected the proposed rescue deal over fears that Chinese rivals will have access to its technology.

If you liked the article, share on:

Comments

Recommended

It has been nearly eight years since Toyota entered a new era of sports cars when it officially unveiled the production version of the Toyota 86 – also known as...
by - February 27, 2019
The new Audi TT RS – yes, the top version of the German carmaker’s facelifted TT model series – is now officially here. If you could remember, the range-topping TT...
by - February 18, 2019
Nearly half a year ago when McLaren Automotive unveiled the McLaren 600LT Coupe, the British carmaker is now introducing a version that lets its passengers enjoy the thrill of an...
by - January 25, 2019
German carmaker Volkswagen is now making the latest evolution of the new Volkswagen Golf GTI -- the new Golf GTI TCR. First unveiled as a concept at the annual GTI...
by - January 24, 2019
It has been three and a half years since BMW unveiled the sixth generation of the BMW 7 Series. Thus, it is really about to give the 7 Series a...
by - January 17, 2019