Saab 80.000 cars sales forecast is no longer feasible,"loss of €79 million

The roller coaster that is Saab has taken another turn, and unfortunately for the Swedish brand, the future doesn’t look so bright. In spite of a tentative agreement to let Russian banker Vladimir Antonov invest 30 million euros in Saab’s parent company Spyker in return for a 29.9 percent stake, the investment still needs to be approved by the European Investment Bank, which means the Swedes are still short on cash and cannot resume full production.

Today, Spyker reported a loss of €79 million before interest and tax for its first quarter earnings, while the company’s CEO, Victor Muller, said that Saab will not meet its sales target this year.

"It is unclear at this time what the consequences of the recent production stoppages and funding issues will be for our full year 2011 forecast but it is realistic to assume that realizing our 80.000 cars sales forecast is no longer feasible," Muller said in a statement.

Production at Saab’s Trollhattan factory in Sweden has ceased since early April after many suppliers stopped delivering parts for not being paid.

Ironically, March 2011 was the best sales month for Saab Automobile since becoming an independent company with the Swedish automaker reporting sales of 9,674 cars in Q1 2011 compared to 3,630 in Q1 2010, an increase of 167%.

Despite the economic setbacks, Muller still believes Saab can be turned into independent premium car manufacturer and is now looking towards China for a backup plan.

“In the mean time we have opened up alternative routes to fund the company mid- and short-term including but not limited to discussions with Chinese car manufacturers, the discussions with some of which had already been ongoing for several months,” said Muller.

“We are hopeful that these discussions will result in a solution very shortly so we can resume production. We will make it our top priority to restore the confidence of our suppliers, dealers and partners and apologize to them as well as to our dedicated employees for the disruptions that occurred”, he added.

Saab Roller Coaster Continues as Cash Gets Tight

Saab just can't seem to catch a break. After moving from the General's formerly overcrowded pocket into the hands of Spyker, the once-quirky brand is now doing all it can to bring production back online after failing to pay suppliers.

The gist is this: Saab received 400 million Euros (~$580 million) from the European Investment Bank so it could keep on ticking. Sweden guaranteed the loan, meaning whatever Spyker's resolution calls for must get the go-ahead from the Man.

Saab hopes Sweden will release some collateral, but in order for that to happen its loans must be reduced. According to Reuters, the first hit would be cutting money from IEB loans intended for green tech.

Bo Lundgren, Sweden's Debt Office Chief, says, "We can to some extent consider reducing the collateral which in turn would leave them able to use the collateral to obtain financing...But that is on condition that they scale back the amounts being guaranteed and reduce the volume of loans and that we on the margin improve our safety margin."

Saab has a few other cards up its sleeve, however. For one, the brand may sell off real estate and then lease it back. Another potential solution comes in the form of Spyker Cars owner Vladimir Antonov. He's the Russian investor who was run out of Spyker by General Motors for alleged shady business dealings, and he's got funds.

Regardless of how Saab fares, higher-ups in Sweden's government want people to know that they will not simply assume responsibility for organizing the company. Anders Borg, Sweden's Finance Minister, says, "It is very much up to those who are responsible for Saab to sort the problem out...It is not going to be solved by the taxpayers lowering their demands for clarity and good governance."

Keep checking back as the Saab survival story continues.

By Phil Alex