Tiny Scandinavian Supercar Company Buys Saab

Saab is going back to Scandinavian owners, and will probably be all the better for it. The Swedish newspaper Svenska Dagbladet reported today that Koenigsegg, a tiny niche maker of ultra-fast sports cars, has signed a letter of intent to buy the venerable brand from General Motors.

GM never seemed to know what to do with Saab, and its attempts to make the car less quirky and more friendly to the company’s parts bin (Saabs with OnStar!) ultimately diluted the brand’s effectiveness, both in the U.S. and abroad. Saab owners treasured the automaker’s aircraft roots and liked having the key on the floor. New model introductions stagnated under GM’s watch, especially as the parent company’s fortuned tumbled.

Koenigsegg was founded in 1994 by Swedish entrepreneur Christian von Koenigsegg but much investment comes from outside. Among the owners, Svenska Dagbladet reported (in Swedish) are Norwegian dealmaker Bard Eker of Eker Group (he has 49 percent). Eker and Koenigsegg reportedly have other Norwegian and North American investors in their bid for Saab.

Koenigsegg is hardly a big player. Ever seen one? Neither have I. The $14 million company made a modest $150,000 profit in 2008 after two losing years. The company’s handcrafted cars can top 240 mph, but only an elite can afford the $1.2 million price of admission. There are reportedly only nine of them in the U.S. Jeremy Clarkson of Britain’s Top Gear tested the flagship CCX:

According to Reuters, the deal is expected to be finalized in the early summer. It is in the nature of David swallowing Goliath, but that’s been a trend lately: Chinese Sichuan Tengzhong is buying Hummer; Fiat is buying up Chrysler and Canadian parts maker Magna is consuming Opel.

The main problem with deals like this are their scale, Nomura analyst Michael Tyndall told Reuters. “I’m concerned it doesn’t have the scale or expertise to exist as a standalone business,” he said.