GM's plan to sell its Saab division appears dead after a Swedish specialty automaker backed out of a deal to buy the unit.

A Swedish group has backed out of buying Saab, putting the Swedish carmaker's future in doubt. (Hector Mata/Associated Press)

The future of the troubled brand was cast into doubt Tuesday after General Motors Co. said Koenigsegg Group AB had decided to end the deal announced in June because it had trouble arranging financing.

Financial details of the planned Saab acquisition have never been disclosed, but Koenigsegg said in August it lacked about $417 million US to conclude the transaction.

Anthony Faria, a professor of marketing at the University of Windsor, told CBC News the development has to be a "very big disappointment" for GM, not only because of the lost revenue from the sale but also because it now must bear more wind-down costs in addition to those for the Saturn and Pontiac brands.

"They're going to have to work out some sort of deal with Saab dealers, they're going to have to work out some sort of deal with Saab employees and they're going to have to write off their investments in Saab, which is all going to hurt GM's bottom line," assuming it doesn't find another buyer, he said.

GM tried to unload the Swedish brand as it restructured under Chapter 11 bankruptcy protection earlier this year.

The apparent death of the Saab deal comes on the heels of GM's shocking decision earlier this month to back out of a proposal to sell its European Opel and Vauxhall operations to a consortium led by Canada's Magna International Inc.

'This comes at a bad time for GM' — Prof. Anthony Faria

"This comes at a bad time for GM," Faria said. "It is going to be some additional cash outlays for GM on top of GM recently paying off the German government some initial loans to Opel."

GM also will also have to bear part of the estimated $3.5 billion to $4 billion in restructuring costs for Opel, and "that is going to be a cash drain on GM," Faria said.

The Detroit automaker came under fire for backing out of that sale after European governments had arranged millions in bridge financing and concessions.

And in September, a deal that would have seen auto dealer and former racer Roger Penske buy GM's Saturn brand fell through.

GM chief executive Fritz Henderson said the automaker is disappointed in the Saab decision and will take several days to figure out what to do.

Financing problems

A person briefed on the deal said Tuesday that Koenigsegg informed GM of the decision Monday, and Saab's future is now unclear. GM's board will have to decide the company's next move, said the person, who asked not to be identified.

Koenigsegg Group, a tiny maker of high-priced exotic sports cars, stated Tuesday that it came to the "painful and difficult conclusion" that it couldn't complete the deal.

"The time factor has always been critical for our strategy to breathe new air into the company," it said. "Unfortunately delays in the completion of the deal have resulted in risks and uncertainties that stop us from carrying out the business plan."