By Kevin Krolicki and David Bailey

DETROIT (Reuters) - A deal for General Motors Co <GM.UL> to sell Saab collapsed on Tuesday when the buyer pulled out, in a move that threatens a 60-year-old Swedish auto brand with closure after mounting losses.

GM had been aiming to close a deal by the end of next month to sell Saab to a partnership led by the Swedish luxury car builder Koenigsegg and backed by China's Beijing Automotive Industrial Holding Ltd (BAIC).

Koenigsegg, a tiny Swedish company that hand builds sports cars that sell for $1 million, said it was pulling out of the deal because of the risk of delays in closing five months after reaching a preliminary deal with GM.

That came as a surprising setback for GM, which has been working to shed brands as part of a more narrowly focused sales strategy after emerging from a bankruptcy in July, backed by over $50 billion in U.S. government financing.

Closure of Saab and its Trolhattan, Sweden, production hub also would threaten over 3,000 jobs and scuttle a plan spearheaded by the Swedish government to help finance a restructuring of the company.

Financing the Saab sale had been seen as a major challenge for Koenigsegg even after Chinese state-run BAIC said in September that it would take a minority stake in the company.

BAIC said it was disappointed the deal had fallen through and was reviewing its options but remained committed to becoming a more global company.

"With regard to Koenigsegg's withdrawal, we will carefully evaluate this project anew and make appropriate arrangements," BAIC said in a statement.

A tentative deal reached by GM to sell its Saturn brand to Penske Automotive Group Inc <PAG.N> also collapsed at the end of September, just before it was expected to close.

NO SWEDISH BAILOUT

Chief Executive Fritz Henderson said GM would take the next few days to consider the options for Saab. "We're obviously very disappointed with the decision," he said.

GM's 13-member board is scheduled to meet next Tuesday in Detroit for a regular monthly meeting and the question of what to do with Saab will now lead the agenda, said one person with direct knowledge of the situation.

There are no other bidders for the brand, meaning that GM's only options would be to restart the sale process or opt for closure, the person said.

Because of the pressure GM faces to focus on its remaining four core brands -- Chevrolet, Cadillac, Buick and GMC -- a wind-down of Saab operations is likely, the person said. Sweden effectively ruled out a state bailout for Saab, saying the brand's future would have to rest with finding a new private-sector buyer.