By on May 12, 2011

Saab’s deal with the Chinese automaker Hawtai has failed in a predictable manner, as the struggling Chinese partner apparently didn’t receive government approval for the deal. Saab-Spyker’s announcement of the deal’s collapse explains [via AN [sub]]

Since it became clear that Hawtai was not able to obtain all the necessary consents, the parties were forced to terminate the agreement with Saab Automobile and Spyker with immediate effect. The parties will continue their discussions about a possible cooperation, however now on a non-exclusive basis

This isn’t the first time that the Chinese takeover of a Western brand failed due to the Chinese government’s insistence on industry consolidation, as the Hummer-to-China deal failed for similar reasons. Meanwhile, we should have seen this coming a mile away…

According to one of the earlier reports of Saab’s flirtation with the Chinese industry,

Saab was talking to a wide range of Chinese automakers about a tie-up to help the carmaker weather its current crisis. He did not name those potential partners, but described them as “niche players and big boys.”

But Muller added that teaming up with a large manufacturer was more difficult for a smaller brand like Saab. Partnering with a local niche player would give Saab a stronger voice.

Though Muller may have had his reasons for picking a smaller partner from China’s vast auto industry, he should have studied his history first. The Hummer deal was axed by the Central Government not only because it represented an anti-environmental image, but because the proposed buyer (Sichuan Tengzhong) wasn’t one of the large automakers favored in China’s industry consolidation scheme. The strange part? According to a separate AN [sub] report, Muller has been “doing his homework” on the Chinese industry for six months, saying

In September we put together a working group to inventory the Chinese market. That related to importation, potential partners for distribution, potential partners for manufacturing. We have been at it for half a year

And yet they didn’t pick up on Hawtai’s struggles, and therefore its lack of credibility as a potential partner. Sure, they might have assumed that the Chinese Government would have been receptive to tying a company that had over-gambled on diesel engines in a market where you can hardly buy a gallon of diesel with a struggling European brand… but ultimately, the Chinese government almost always defaults to macro-solutions over micro-solutions (a natural product of trying to govern a billion people). Saab should have known that Beijing would not approve the Hawtai tie-up.

But, like the good newly-converted Chinese evangelists they are, Saab-Spyker is moving on from the Hawtai mis-step, and is pursuing a deal with the larger, more export-focused Chinese OEM Great Wall, according to Automotive News [sub]. According to AN’s sources

The two sides have never stopped talking and have been in touch with each other despite the Hawtai/Spyker deal. It could be mutually beneficial if Great Wall and Spyker team up eventually. The Chinese partner has the cash that Spyker needs, while Saab’s technologies and its network in Europe are valuable for the Chinese side

And though that relationship could materialize into something solid, as Great Wall is considered one of China’s flagship automakers, it still leaves Saab back in a short-term scramble for cash. The firm says that it will restart production once its EIB loan drawdown is approved, but it’s still got a long, rough road ahead of it…

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15 Comments on “Saab-Hawtai Deal Fails: Chinese Consolidation To Blame?...”

  • avatar

    Keep Spyker talking long enough and SAAB may go bust. Then the Chinese can do an MG Rover and lift and shift the lot back home.

    In may way’s I can’t help but think SAIC would be the best partner for Saab. SAIC could sell MG’s through the Saab network and Saab would get investment. Plus what would SAAB rather have sitting next to a Saab 9-5? An MG 6 or a Great Wall….

  • avatar

    Well, at least the Hawtai folks got a trip to Sweden and a nice tour of the factory before their government put the kibosh on the deal.

  • avatar

    Sheesh, SAAB can’t catch a break. It’s as if it’s on a coin-operated life-support machine, and they keep running out of change. Meanwhile, the patient gets more and more brain(read: brand)-damaged.

  • avatar


    With the right Chinese car company, this might work. All the high end car marques seem to be salivating over China these days. A deal between Saab and a Chinese car company would give Spyker cars a higher profile in China. You already mentioned the Saab dealer networks would be attractive to a Chinese company eager to export.

    Which Chinese car company makes the highest quality products today?

  • avatar

    Word on the street in Beijing is that the deal did not come with the proper IP, that Saab licenses the platform from GM, and that the government won’t allow the purchase of just a brand without the IP.

    • 0 avatar

      This can’t be correct. You mean to tell us that Saab, as a brand in and of itself, doesn’t have an intrinsic appeal worth tens of millions of dollars, and even more yuan? What’s the world coming to? This entire situation should have been put to rest two years ago. Like Ted Nugent and Old Yeller, sometimes the most humane thing is just to shoot it in the head.

  • avatar

    My doubts about the viability of this deal are now confirmed.

    I’m not buying the “consolidation” story. Both Hummer and Saab are bad deals, as was Saturn (Penske passed on this one), and this is what due diligence reveals to a potential buyer.

    The Chinese may have lots of money, but they’re not stupid with it.

  • avatar

    Actually, something smells here. That alleged ‘No’ came too fast. This is not the way it works in China. They ask for clarification, additional documentation, and take their old time.

    And also, with a deal of that size, matters are usually cleared verbally beforehand.

    • 0 avatar
      Domestic Hearse

      Exactly. There would normally be weeks — months — of approval processes for the granting of a marriage blessing by the Chinese government. Maybe the Chinese government has other plans for Saab. Preordained marriage, as it were? A more favorite son in the wings for the bride?

      Or maybe, like Tstag says above, why not wait for Saab to expire (where else they gonna go? Antonov isn’t going to be allowed to be a White, er Black Knight), then pick up the brand for pennies on the dollar? However, once that happens, will there be much in the form of a dealer network in the USA (heck, those stores are lucky to be writing 1-2 Saab deals a month as it is).

    • 0 avatar

      You have to realize that Saab had previously been looking for suitors when GM was selling them, including when companies like BAIC were considering a purchase. So Beijing likely had already done plenty of research into Saab and now that they’re in even worse shape than before it’s not hard to believe that the government would immediately reply with a resounding no. If it wasn’t worth buying back then the fact that the technology is even older now makes it absolutely not worth it.

      • 0 avatar
        Paul W

        Some speculate that Muller shot himself in the foot by wheelin’ and dealin’ with too many Chinese partners, leaving everyone confused (over who gets what in terms of IP rights, production, setting up a Saab sales network, etc) and betrayed. The CEO of Youngman accuses Saab of not following Chinese rules – only ONE application per foreign car manufacturer is allowed to be processed at the same time by the NDRC. It seems to be a hot mess.

        Hilariously, when news of the deal breaking down first surfaced, Antonov waved it off as nothing but a rumor to discredit Saab.

  • avatar

    What kind technology SAAB constantly talks about is going to bring to table? All they have is older GM platforms/engines and Buick Lacrosse clone already sold in China as a Buick. All SAAB can offer is the name. That is what poor aristocrats do – they do not have money but have name and ready to sell it to new rich former plebs. Well, marry me and become princess or countess.

  • avatar

    And where it came from? SAAB was developing all this years secretly from GM brand new platform what costs billions of dollars to do and it is even competitive? If it is so easy to develop new platform why all this consolidation around the world?

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