NEW YORK( TheStreet) -- Swedish car-maker Saab Automobile is going into liquidation, following a failure to get a last-ditch investment from Chinese automaker's Pang Da and Zhejiang Youngman. Like with Hummer, a formerly General Motors (GM) -owned division, Saab will be wiped away after failing to receive Chinese support.
Saab's parent Swedish Automobile filed a liquidation plan in a Swedish District Court, according to a Monday statement, which may make the once GM-owned division disappear. The liquidation of Saab is similar to the discontinuation of Hummer, Pontiac and Saturn brands, which failed to get investor support after GM sold the brands as part of its 2009 bankruptcy process.
The liquidation of Saab -- and a similar discontinuation of Hummer -- also shows that formerly GM-owned brands have struggled to find foreign buyers, in contrast to Ford (F), which sold its Volvo brand to China's Geely Automotive for $1.8 billion in 2010 and its Jaguar and Land Rover brands to India's Tata Motors (TTM) for $2.3 billion in 2008.
Previously, Saab Automobile was looking to be sold to Chinese automobile companies to ward off bankruptcy threats. In October, Saab said in a press release that its entered into a sale 'memorandum of understanding' with Chinese automakers Pang Da and Zhejiang Youngman for $142 million. As part of the sale, Saab expected the acquirers to also provide long term funding to Saab Automobile and needed a key approval from General Motors.Saab's China sale effort stalled as a result of veto provisions that General Motor's retained in the auto maker. In November, GM said it could veto any sale proposal to protect its key Saab patents and its auto-making relationships in China. The company said it would oppose a sale unless it could be convinced doing so would not "negatively impact G.M.'s existing relationships in China or otherwise adversely affect G.M.'s interests worldwide," the New York Times reports. Through joint ventures, General Motors is the largest car seller in China and counts the region as one of its largest and fastest growing markets. For more on General Motors see 6 auto stocks that could accelerate and George Soros's portfolio. The effort for a lifesaving sale was the second for Saab in two years' time to ward off a liquidation and resume its car making business.
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