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The future of Saab's factory in Sweden has been thrown into doubt by General Motors Vice Chairman Robert Lutz.

"Who knows where Saabs will be built in future? There is nothing that says Saabs have to be made in Sweden," Lutz said.

Saab's plant at Trollhattan, Sweden, is operating at just 59 percent of capacity, according to consultant PricewaterhouseCoopers. The plant assembles the Saab 9-3 and 9-5.

General Motors has struggled to make Saab profitable since it bought 50 percent of the Swedish automaker in 1990 and assumed full ownership in 2000. Saab's losses in 2002 were 450 million euros, or about $551.5 million at current exchange rates. Last year's figures are not available.

Lutz said GM Europe will restructure radically its production capacities to improve utilization of its plants, a move that is likely to affect Saab.

"We like Saab, we like its design, we like its customers," Lutz said. "But Saab's problem is that its product line has been too narrow. That is why we have to do things differently."

Lutz added that Saab needed new models but was too small to develop them alone while it had total annual sales of just 130,000 and huge annual losses.

The 9-2X sport hatchback, which goes on sale in the United States this month, will be produced by Subaru in Japan. It is the first Saab to be built outside Sweden.

Saab's new 9-7X SUV, based on the Chevrolet TrailBlazer, goes on sale in the United States next February. It will be built at GM's plant in Moraine, Ohio.

"Saab has been trying for 20 years to reach sales of 150,000 units a year -- the critical volume it needs to be profitable," said John Lawson, from London-based analyst SmithBarney.


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