General Motors Co. will wind down Saab after talks to sell the brand to Dutch carmaker Spyker Cars collapsed, the company said Friday.

The future of the Saab brand in in doubt after Swedish and Dutch carmaker backed out of talks to purchase the line from GM. (Hector Mata/Associated Press)

"Despite the best efforts of all involved, it has become very clear that the due diligence required to complete this complex transaction could not be executed in a reasonable time," GM Europe president Nick Reilly said in a statement. "In order to maintain operations, Saab needed a quick resolution."

The company thanked the Swedish government and Dutch officials at Spyker for their diligent work in trying to hammer out a deal, but expressed regret that it must now begin the process of winding up the brand.

"We will now proceed with the wind down as quickly and fairly as possible," GM vice-president John Smith said Friday.

The process will officially begin in January but the company declined to suggest when it might be completed. It did say that 3,400 jobs would be lost and 1,100 Saab dealers would be affected. The company held out a glimmer of hope that a sale to an outside buyer could still come together, but it is no longer actively working in that direction.

"I suppose it is possible that during the wind down process, someone might come forward for all or some part of Saab," Smith said. "I can't rule it out, but the clock starts now."

'We will now proceed with the wind down.'— John Smith, GM vice-president

GM first put the Saab brand up for sale in January as part of its restructuring. A requirement of that restructuring was that the company must downsize its brands to four from eight. On Friday, GM reiterated that its ongoing focus remains on its four remaining core brands — Buick, Cadillac, Chevrolet and GMC.

GM was earlier in talks to sell Saab to a consortium led by the Swedish sports car maker Koenigsegg Group AB, but it turned to Spyker after Koenigsegg withdrew from the talks in November.

Speculation has since been rampant on the future of Saab. Earlier this week, GM chairman and CEO Ed Whitacre told reporters he had "a sense it's possible" that the sale to Spyker would go through, but conceded the brand would close by the end of the year if the talks fell apart.

The automaker will continue to honour Saab customer warranties should that happen, it said Friday.

"Owners of Saab products should feel comfortable that their warranties will be honoured," Smith said.

Earlier this week China's Beijing Automotive Industry Holdings — originally part of the Koenigsegg consortium — announced it had agreed to buy some powertrain technology from Saab.

The company has given no details of costs or timing of that purchase, but BAIH president Wang Dazhong said as part of the deal, Saab wanted his company to import and sell Saab brand vehicles in China, which this year became the world's biggest auto market.

Analysts have said the Saab powertrain deal might enable BAIH to build a passenger car to call its own.

With files from The Associated Press