General Motors (GM) says it is closing its Swedish venture, Saab Automobile AB, as talks to sell the loss-making brand to Dutch automaker Spyker Cars collapsed yesterday.

Last month Sweden's Koenigsegg Group had called off plans to acquire the brand.

The Zeewolde-based sports car specialist, Spyker and the Swedish government, which was in talks with GM Saab said that the sale was too complicated to be completed in a short time.

"We worked 24/7 for three weeks, but the complexity of the transaction in combination with the strict deadline simply did not allow us to complete the transaction," said Victor Muller, CEO of Spyker in a statement.

Sweden's minister for enterprise, Maud Olofsson put the onus on GM for not doing enough to save Saab during the 20 years it controlled the brand during which its losses mounted. Olofsson said at a news conference in Trollhattan, Sweden, yesterday, "It's GM who took this decision on their own grounds, and they have to answer to that by themselves."

The GM board had put a month-end deadline to conclude a sale and with deal collapsing, GM said it would shut down Saab operations, including its production hub in Trollhattan, Sweden, starting in early January. It said Saab would satisfy debts, including supplier payments and honor warranties.

This setback to sell Saab comes after Swedish luxury car maker Koenigsegg Group abandoned its plan to take over Saab last month since the Swedish government failed to guarantee €400 million loan passed by the European Investment Bank in time. (See: Swedish carmaker Koenigsegg calls off Saab acquisition)

GM required the €400-million funding commitment from the European Investment Bank (EIB), which was to be guaranteed by the Swedish government in order to push the sale through.

GM bought a 50-per cent stake in Saab in 1989 for $600 million and took over the full ownership of the company for $125 million in 2000. Despite the efforts to make the unit profitable, Saab has been loosing money in the recent years.

The company employs 3,400 people mostly in its Trollhattan plant in Sweden and has a dealership of 220 in the US including 1,100 worldwide.

The company sold 92,000 cars in 2008 and reported a loss of $384 million. According to Autodata Corp., Saab sales slumped 55 per cent during the first five months of 2009 compared to last year whereas GM's overall drop was 37 per cent.

This month, GM sold certain portion of its Saab 9-3, current 9-5 and powertrain technology and tooling to China's state-owned Beijing Automotive Industry Holdings Co. Ltd (BAIC) for an undisclosed sum. (See: GM sells parts of Saab to Beijing Automotive)

BAIC, the holding company of Chinese automobile and machine manufacturer, Beijing Automotive Import & Export Corporation will also acquire turbine engines and gearbox technology from Saab, as well as some of the brand's manufacturing equipment, while Saab will assist BAIC to integrate this technology into future BAIC vehicles.

GM, which emerged from bankruptcy in July 2009, has been trying to sell the Saab and its other brands like the Pontiac, Saturn and Opel for about a year as part of its sweeping restructuring plans, which included refocusing its US brands from eight to four - Chevrolet, Cadillac, Buick and GMC.

GM has already begun winding down Pontiac and Saturn, while the sale of the Hummer is still awaiting approval from the Chinese regulator.

In October, Penske Automotive Group, the second largest publicly-traded automotive retailer in the US by revenue, called off a deal to acquire the Saturn brand as it could not arrive at an agreement with a third-party contract manufacturer to supply vehicles for the brand, (See: GM to close Saturn as buyout deal collapses)

GM finally, abandoned plans to sell the Opel brand to a consortium led by Canadian car-parts maker Magna International. (See: GM says 'No' to Magna; decides to keep Opel)