Spyker group’s mounting losses prompts Saab to cut production

It is a big amount of money that goes into the making of a car. There is a shortfall of $39.9 million being faced by Spyker Group who are the new owners of the Saab Company. The shortfall has occurred due to the taking over of the Swedish marquee. Reports indicate that the company has therefore decided to cut down production for this year.

It would not be a complete stop of production though but much less number of Saab would be available in the market this year. The cut in production would be in the tune of 22 percent than previous year’s figures. From 45,000 the reduction would get the numbers to 30000 or 35000 this year. The plans of Spyker to make Saab the niche factor of their company therefore does not hold good as of now.

Future plans of the company are to build up the brand in slow pace with production being increased to 80,000 units in 2011 and 120,000 in 2012. This would however be possible only after Spyker has made good the current shortfall.

There is also the dependent factor that the car is able to reach the consumers in China and Russia which is facing a boom in car ownership desires and therefore the car would hold more demand and cost in these markets.

Source: motorauthority