Saab Bankruptcy Leads to Warranty Concerns

SAAB, a company that was once renowned for style and sophistication, a thinking person's car, is now in its death rattle.

After its parent company, Swedish Automobile NV, applied to a Swedish court to put three critical parts of the enterprise, Saab Automobile, Saab Powertrain and Saab Automobile Tools, into bankruptcy, the status of warranties on new Saab cars sold here remains under a cloud.

There are about 50 unsold new Saabs in local dealerships and in the Australian distributor's stock, on top of sold Saabs still under warranty.

Last year, Saab sold just 14 cars Australia-wide from eight dealerships. This year it faired better with the release of a new 9-5 model in April, which boosted the brand's sales tally to 139 cars so far.

As the Swedish court is yet to appoint an administrator, it was too early to know how the factory-backed warranty applied, the managing director of the local distributor Saab Cars Australia, Stephen Nicholls, said.
''The new car warranty provision is held by the factory in Sweden, which is one of the entities that's gone into bankruptcy,'' he said.

''At the moment were seeking clarification from the factory how that's going to work.
''That is something that's a question mark.''

Saab spare parts supply is secure, as the global parts distribution company, Saab Parts AB, continues to trade normally, Mr Nicholls said.

Production of Saabs in Sweden has halted and there are no further shipments en route to Australia.
A similar warranty concern confronted Rover and MG buyers when the British group became insolvent in 2005.

In Australia, Rover and MG warranties were honored after dealers rallied to find a reinsurer willing to take on the risk - an approach Saab might follow.

''That's a logical alternative that would be evaluated, but we're not doing anything on that front at the moment,'' Mr Nicholls said.

Mr Nicholls said he expected that Saab would maintain eight dealerships, its 20 authorised repairers and the six staff at Saab Australia.

''Our plan is to cut our costs locally, restructure a little bit, and carry on supplying parts for the dealers,'' he said.

Already the cars are being heavily discounted, with one online retailer slashing $11,000 from the Saab 9-3 model and $16,000 from the Saab 9-5.

The Australian Competition and Consumer Commission was still researching the issue last night after being approached for comment.

Read more: http://www.smh.com.au/national/saab-bankruptcy-leads-to-warranty-concerns-20111220-1p41t.html#ixzz1h5NjGAlj

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