Saab and Hawtai form strategic tie-up
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SAAB Automobile Tuesday formed a strategic partnership with China's Hawtai Motor Group, which will allow the Swedish firm to secure a capital lifeline and expand in the world's largest auto market.
The tie-up will allow the Dutch Spyker Cars NV-owned Saab to access 150 million euro (US$222 million) from Hawtai and produce its new Saab 9-3 sedan in China starting in 2013, said Victor Muller, chairman of Saab and chief executive officer of Spyker.
Hawtai will pay 120 million euros for a 29.9 percent stake in Spyker and another 30 million euros in a convertible loan which will mature in six months. The deal is still subject to approval from the Chinese government and other debt holders.
"A car maker without a China strategy is definitely dead," Muller said in Beijing.
The partnership will help Saab to stay afloat after its plant in Trollhattan in Sweden was halted for nearly a month due to cash-flow problems. Saab eventually got short-term funding through a 30-million-euro convertible loan deal with Gemini Investment Fund Ltd that will allow it to restart output within a week.
Richard Zhang, vice president of Hawtai, said the deal will offer his firm access to innovative technologies and an international network.
Analysts also agreed the cooperation will benefit both companies.
"Only China has ideal partners that own sufficient cash and strong government support for Saab," said Ye Sheng, associate research director at Ipsos's China in Shanghai, "Hawtai also needs advanced technologies."
But Ye said the plan to produce domestically may not position Saab as a competitive auto player in the short term due to stiff competition.
Founded in 2000, privately-owned Hawtai is a small auto maker specializing in making SUVs, clean diesel engines and auto transmissions. Its two plants in Rongcheng, Shandong Province, and Erdos in Inner Mongolia, produce 350,000 vehicles annually.
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