Saab joins forces with Chinese partner

SAAB Automobile has signed a strategic partnership with small but ambitious Chinese motor company Hawtai Motor Group that will not only help the struggling Swedish company to revive production at its stalled home factory at Trollhattan but also get the brand into manufacturing in the huge Chinese market.

Hawtai has agreed to spend €120 million ($A163m) to buy a stake of up to 29.9 per cent in Saab parent company Spyker Cars NV in return for the rights to build and distribute Saab vehicles under joint-ventures in China, as well as share technology.

As well, Hawtai has agreed to lend Saab €30 million ($A40.7m) in the form of a convertible loan.

The Saab-Hawtai tie-up was announced today in Beijing by Saab chairman Victor Muller and Hawtai vice-president Richard Zhang, just 24 hours after Spyker announced it had secured a €30 million short-term loan that would, along with financing from the European Investment Bank (EIB), help kick-start production at Saab’s Trollhattan factory, possibly within a week.

The Saab production lines ground to a halt last month when unpaid parts-makers refused to deliver components until cash-strapped Saab settled their bills.

Announcing the deal, Mr Muller said: “The partnership with Hawtai allows Saab Automobile on the one hand to continue executing its business plan since we secured the required mid-term financing subject to meeting certain conditions, whilst on the other hand it allows Saab Automobile to enter the Chinese car market and establish a technology partnership with a strong Chinese manufacturer.”

From top: Hawtai B11 (first four pics), Hawtai B21, Saab 9-5, Saab 9-3.

In other promising news for Saab, former major shareholder in Spyker, Russian bank owner Vladimir Antonov, has been given clearance to invest in Saab from Sweden’s National Debt Office after previously being disallowed following claims he was connected with Russian mafia.

Mr Antonov, chairman of Conversgroup, has been cleared of any wrongdoing by an official Swedish government investigation, paving the way for him to become a shareholder in Spyker and thus secure Saab’s future.

However, an initial plan to raise cash by selling the property under Saab’s factory and head office might yet fall over if the company cannot meet a number of stringent conditions imposed by the EIB.

Saab’s latest partner, Hawtai Motor – a partner of Hyundai in China until last year – is best known for its SUVs based on Santa Fe and Terracan platforms, both of which are still sold under those names in China.

With capacity for 350,000 vehicles a year at two plants, Hawtai is one of China’s smaller motor manufacturers, but it is backed by the large Hawtai Group industrial conglomerate that has interests in a wide range of industries, including paper, chemicals, electricity, forestry and logistics.

Hawtai reportedly has ambitions to launch its products in Australia, with an executive telling Australian journalists at the recent Shanghai motor show that it was intending to develop right-hand-drive vehicles suitable for markets such as Hong Kong and Australia.

Founded just 11 years ago, Beijing-based Hawtai Motor recently launched a new large luxury sedan, the B11, joining its mid-sized sedan, the B21. Both are powered by a choice of four-cylinder petrol and diesel engines.

The company has announced planS produce a new SUV, the B35 Boliger, which has been described as a “mini-Cayenne”, to join the old Santa Fe and Terracan.

Its newer, self-developed models are all said to be contenders for the Australian market, with a Hawtai reportedly saying the company was interested in launching its products here but had yet to approach potential importers or address safety and emissions standards.

While Hawtai has been sourcing petrol engines from Mitsubishi and fellow Chinese motor company SAIC, it claims to be Asia’s leading clean-diesel engine producer under the OED sub-brand.

Chinese reports suggest it has bought technology from Italy’s diesel specialist VM Motori for its Chinese-built range of three-cylinder, four-cylinder and V6 diesel engines, ranging from 1.5 litres to 3.0 litres.

The latter produces 184kW of power and 500Nm of torque, but so far has not surfaced in any of the company’s five vehicles.

So far, the top-of-the-range diesel is a 2.0-litre four-cylinder producing 110kW of power and 310Nm of torque.

As well, Hawai makes ZF-based, old-tech five-speed manual and four-speed transmissions at its factories. A six-speed auto is said to be in development.

Its web site says it plans to build an industrial complex at Erdos, in Inner Mongolia, to lift vehicle production to 500,000, engine production to one million units and transmission volume to five million per annum. It also has a plant in Shandong province.

Meanwhile, Spyker has posted a net loss of €76.3 million ($A103m) in the first quarter of 2011 due the travails of Saab.

The company said it had sold 9393 vehicles in the quarter – up 167 per cent on the same period last year, when it was still sealing the deal to buy Saab from GM.

Saab’s Q1 revenue reached €257 million ($A348m), up from €43 million ($A58.3m) in the same period last year.

Last year, Saab lost €218 million ($A298m) for the 2010 calendar year and said it expects another loss in 2011 before returning to profitability in 2012.