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  Saab has struggled globally and locally, with sales plummeting in recent years. Australian sales have dipped 34 per cent this year with the company selling just 653 vehicles.

One of Europe's most respected carmakers, Saab, is teetering on the edge of collapse.

One of Europe's most respected carmakers, Saab, is teetering on the edge of collapse.  Its future is in doubt after suitor, Swedish sportscar maker Koenigsegg cancelled plans to acquire the struggling brand.

Scott Whiffin, a spokesman for Saab Australia, which operates under GM Premium Brands locally, said the company and the 14 local dealers were still digesting the news.  "It wasn't something that was being anticipated," he said.

"What's happening now is that the GM team at the pointy end of this process have said they'll take a couple of days to work it through.  "So we won't see any next-step type developments until at least next week."

Whiffin said the local operations would continue business "as usual".  "Warranties will continue to be honoured, servicing arrangements remain unchanged and there will be no issues with receiving spare parts," he said.

The decision by the Koenigsegg Group AB has shocked General Motors executives.  US reports are suggesting that when GM meets next week the 60-year-old brand will be wound down. 

"We're obviously very disappointed with the decision to pull out of the Saab purchase," GM President and CEO, Fritz Henderson, said."Many have worked tirelessly over the past several months to create a sustainable plan for the future of Saab by selling the brand and its manufacturing interests to Koenigsegg Group AB.  "Given the sudden change in direction, we will take the next several days to assess the situation."

Koenigsegg head, Christian von Koenigsegg, said delays in completing the deal "have led to risks and uncertainties that prevent us from successfully carrying out our business plan for Saab Automobile".  Saab has struggled globally and locally, with sales plummeting in recent years.

Local sales have dipped 34 per cent this year with the company selling just 653 vehicles.  Globally it sold just 93,300 cars last year with Europe accounting for the bulk of sales.  Along with Saab, GM has been offloading its underperforming brands.

In September a deal to sell its Saturn division to the Penske Automotive Group fell through and GM axed the brand.  It has decided to hold on to its European Opel group but the sale of Hummer to Chinese heavy-equipment maker Sichuan Tengzhong Heavy Industrial Machinery Co is still pending.

GM acquired a 50 per cent stake in Saab in 1989, buying up the balance in 2000.