Saab, the struggling Swedish carmaker that is being cut loose from General Motors, yesterday won bankruptcy protection from its creditors as it tries to mount a survival plan. The loss-making division has until early April to devise a plan and creditors must approve any scheme before it goes ahead.

Saab, which is for sale, said it was looking for a partner and/or investors to raise funds. It is also in talks with the Swedish Government but ministers have said that it needs to produce a viability plan.

Swedish reports said GM could pump $400 million (£280 million) into Saab if the Swedish Government guaranteed loans of $590 million. But analysts said that this would not be enough to steer the company back to profitability. Saab made a loss of SKr3 billion (£242 million) last year and expects a similar loss this year.

Saab’s management attempted to put a brave face on. Jan Ake Jonsson, managing director, said: “Today is the beginning of a new chapter in Saab’s history. We are recreating Saab Automobile as an independent unit.” But he conceded: “The road ahead will not be easy.” The carmaker is pinning some of its hopes on the launch of three models this year.

Saab said that its protection from creditors, called a reorganisation in Sweden, would create short-term stability while it attempted to find a long-term solution.

GM said this week that it would cut financial support to Saab by the end of the year as part of the US carmaker’s efforts to become viable and secure $30 billion in help from the US Government.

Saab employs about 4,100 people in Sweden, where it has one factory. The 3,000 staff at Saab’s 87 UK dealerships greeted yesterday’s bankruptcy filing with resignation as much as concern.

Gary Clay, managing director of Concept Saab, which runs dealerships in Coventry, Birmingham, Leamington Spa and Cardiff, said: “We are concerned, but not surprised, as we understand the reason for it. We’re philosophical.”

Richard Williams, owner of Bristol’s Williams Automobiles, which was set up by his grandfather in 1911, said: “I’m confident that the Swedish Government will step in and, if they don’t, that another car manufacturer will buy it.” Some 58 of the company’s UK dealerships sell only Saabs, with the remaining 29 also selling combinations of Vauxhalls and Chevrolets. Large-scale redundancies are not expected as Saab is likely to continue manufacturing as administrators work to sell or restructure the group.

Mr Williams said that even if Saab was not bailed out or sold, most dealers should be able to survive. A typical dealership made about 70 to 80 per cent of its revenues from servicing cars, with the remainder of its income coming from the sale of new and used cars. The split between revenues from selling new and used cars varied, but on average it was about 50-50, Mr Williams said.Mr Williams said dealerships would need to find another marque within two to three years to survive, adding that this was perfectly feasible because carmakers such as Hyundai and Kia were keen to expand their presence in the UK.

UK car output slumps

Fresh calls for government help for the British car industry came yesterday after figures showed that production slumped 58 per cent in January compared with the same month last year. The dramatic fall to 61,404 cars comes after all car manufacturers took extended Christmas shutdowns to reduce supply to a plunging market. Carmakers, unions, the Conservatives and the AA all pressed the Government, which has set out a £2.3 billion aid package, to do more. Union leaders repeated warnings that swift action was needed.

Times Recommends

• Toyota recalls 437,000 cars including Lexus
• Myners says bonuses are bleeding pension funds
• Japanese company faked safety reports on seats