Saab's troubles hit UAE dealer

Gargash Motors, the exclusive distributor of Saab cars across the Emirates, has been left in limbo after the cash-strapped car brand filed for bankruptcy

An employee works on a Saab car in a factory in Sweden. Bloomberg News

Gargash Motors, the exclusive distributor of Saab cars across the Emirates, has been left in limbo over scant inventory after the cash-strapped car brand filed for bankruptcy protection this week.

Swedish Automobile, previously called Spyker, has struggled for several months to run its Saab business as the company awaits a much-needed cash injection from investors.

Tara Doddihal, the marketing manager for Gargash, says the dealership was set to receive a new batch of Saabs during the summer, which never materialised.

"It's absolutely frustrating because when Spyker bought Saab it was jubilation and we thought it was back on track," she said.

"We thought we were going to get some cars."

Saab has experienced a tumultuous couple of years after it was rescued from closure at the hands of General Motors and bought by Swedish Automobile early last year.

But Swedish Automobile, based in the Netherlands, has gone from white knight to requiring a rescue itself after filing for bankruptcy protection on Wednesday.

Production at Saab's plant reportedly ground to a halt in April as many suppliers stopped offering parts until they received payment.

Saab employees were not paid last month and received late payment of salaries for June and July.

Gargash has not received a new Saab since last year, but had hoped to receive an undisclosed number before the summer was out.

"We are crossing our fingers because we think they are really good cars," said Ms Doddihal.

She said Saab owners in the UAE should not be worried about the availability of parts and that Gargash's aftercare service could take on any model.

"Even now, when things are in such a terrible state, when we request technical support, the Saab technical people are available and giving us support on a regular basis," said Ms Doddihal.

Saab's standstill has left Gargash Motors in a predicament because it continues to operate its Sheikh Zayed Road showroom with only second-hand cars and to pay staff who look after the Saab brand and sales.

Ms Doddihal said the continued supply issues had dented profits and the company now relied on its partnership with Alfa Romeo to boost sales.

"It has definitely affected us. We cannot close the showroom or lay off staff," she said. "We have done little marketing things, but not much, because we cannot afford to spend when we cannot recoup that."

A number of investors are believed to be looking at investing in Swedish Automobile to revive the ailing car brand, including two Chinese car companies, Pangda Automobile Trade and Zhejiang Youngman Lotus Automobil.

Saab said in June both companies had signed binding agreements to take a combined majority stake in Swedish Automobile for a total of €245 million (Dh1,257.9m), but no money had changed hands.

The two investors are awaiting approval from Chinese authorities before they can proceed.

Swedish Automobile's share price has fallen nearly 80 per cent this year.