John Symes struggles to sell the dozen or so Saabs he has in stock. If all else fails he plans to put them into a rental fleet to offset his losses somewhat, he says.
“When rumors of a bankruptcy floated around a year ago, our Saab sales stopped almost immediately,” says the owner of Symes Automotive a Pasadena, CA, dealership that also represents Cadillac, Toyota, Scion and Land Rover.
Saab dealers are gearing up legally to take on Saab’s North American importer. They want compensation for losses incurred as representatives of the bankrupt brand.
Symes and 162 other dealers think Saab North America should make good on warranty claims, incentives and co-op funds. The dealers claim Saab products also lost value due to lack of warranties and as bankruptcy talk grew last year.
Nick Letsios is part of that legal fight. He lacks other brands to fall back on. He bought a single-point Saab franchise in December 2010, a year before the bankruptcy.
His store, Mayors Auto Mall in Woodside, NY, is stuck with vehicles that customers shy away from because they lack warranties, he says. “It’s horrible. We’re getting no traffic whatsoever. I’m surviving on used-car sales.”
He adds, “I’m going to have to take a substantial hit. I can’t afford to write off 40% of the cost, like some bigger dealers. It will put me out of business.”
As an incentive, Letsios is offering potential car buyers discounts on repairs, but it isn’t doing the job.
The few customers he has seen are “bottom-feeders” looking for deep discounts. He’s seen dealers advertising new models $19,000 below sticker price. “That’s the only way customers will look at them, if it’s a fire sale.”
Two other Saab dealers will close soon, Letsios says.
“It’s a company I invested greatly in, and I will be forced to look for alternate franchises if I want to continue the business.”
For a time, Saab dealers were hopeful the brand would see new life with a new buyer. “It was like waiting for Santa Claus,” Symes says. But now, “I’m not exactly waiting at the mailbox for news.”
He’s not bitter, and lauds Dutch entrepreneur Victor Muller for trying to save the auto maker.
“I don’t think there is a bad guy in this,” Symes says. “Victor Muller put together a great vision for Saab. But there wasn’t enough cash coming across the bridge.”
Yet, dealers who filed a court petition want someone to pay for their losses, including General Motors, Saab’s former owner.
George Glassman of Glassman Automotive Group in Southfield, MI, did not join the legal action.
He says he saw the writing on the wall six months earlier and got rid of his Saab inventory, although at drastically reduced prices. Glassman’s dealership group includes Hyundai, Kia and Subaru brands.
GM sold Saab to Muller in 2010. Although GM says it will honor warranties on Saabs sold during its ownership of the brand, some dealers claim GM should cover warranty work on models sold after 2010, as well.
Glassman doubts that will happen: “Game over. GM’s done. They already sold the company.”
