By on May 3, 2011

As expected, troubled Saab has been thrown a lifeline by China’s Hawtai. Spyker announced today that its Swedish unit Saab has secured €150 million ($222.5 million) in funding from Hawtai. The Chinese company will be able to produce and sell Saab cars in China.

Hawtai will invest €120 million for a 29.9 percent stake in Spyker and provide a €30 million ($44.6 million) convertible loan to Saab. If the convert is exercised (which is pretty much a given – it matures in 6 months with a 7 percent interest rate) it converts at €4.88 a share, says the Wall Street Journal.

On Monday, Spyker entered into a 30 million euro ($44.6 million) convertible loan agreement with Gemini Investment Fund with a six month maturity. It is no coincidence that the terms are the same. Under the best of circumstances, the Gemini loan will be paid back with the Hawtai money.

Victor Muller received a serious haircut in the deal. His company Tenaci Capital will convert €42 million of its current €57 million loan to Spyker into share capital in Spyker at €4.88 per share.

According to Automobilwoche [sub], the new Saab 9-3 will be rolling off Hawtai lines as soon as 2013. The paper is not convinced of the deal. It says Hawtai has rescued Saab “for the time being.”

The transactions are subject to approval from certain Chinese government agencies, the European Investment Bank, and the Swedish National Debt Office.

About Hawtai

Hawtai and Huatai are one and the same. As explained by Carnewschina, “Huatai is the Chinese name, Hawtai the English-international name. Both names are used at the same time, just like Rongwei/Roewe, Qirui/Chery and so on. Before 2009 Huatai simply used Huatai as its international name.”

Rongcheng Hawtai Automobile Co Ltd was founded in 2000 and started making small SUV’s. The company is headquartered in Beijing, with manufacturing in Shandong Province and Inner Mongolia.

From 2002 until 2010 Hawtai/Huatai had a joint venture with Hyundai to make the Santa Fe and Terracan for the Chinese market. Later, Hawtai/Huatai produced the trucks under its own name, licensed by Hyundai. At the Beijing Auto Show 2010, Hawtai/Huatai showed the B11 and B21 sedans and the B35 SUV. The B11 went on sale in 12/2010. The B35 was renamed Baolige and will go on sale in June. The B21 will follow by the end of the year.

As Chinese carmakers go, Hawtai/Huatai is small. However, the company is owned by a sizable conglomerate  with large expectations and deep pockets.

Hawtai/Huatai had shown intensive interest in exporting its cars. Saab branded cars could be the key to overcoming the many obstacles awaiting a Chinese exporter. Hawtai is heavily invested into clean diesel technology and is therefore very much interested in exporting to Europe.

From the perspective of a Chinese car company, a going European car company provides instant access to overseas markets, certified technology, brand recognition, respectability. Even damaged goods like Saab can become a treasure in Chinese hands.

 

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11 Comments on “Saab To China...”


  • avatar
    gslippy

    I remain skeptical. That ‘sizeable conglomerate with large expectations and deep pockets’ must see something good that GM and Spyker didn’t.

    In terms of selling cars, Saab’s salvation won’t come from the US market – it’s too steep of a climb at this point.

    • 0 avatar
      aristurtle

      Saab becoming a midrange-luxury marque for the Chinese market? Hey, the name has more starting credibility than Buick.

      • 0 avatar
        Lorenzo

        Actually, Buick has a long history in China as a luxury car. The last emperor of China owned one, and the first President of China, Sun Yat Sen, also owned one. Buick made a smart move in sending engineers to train mechanics to maintain the Emperor’s car, and that expertise kept a lot of cars owned by the wealthy running. The Chinese never forgot the cache the brand had.

    • 0 avatar
      th009

      Spyker still has large expectations, just not deep pockets.

  • avatar
    Mr Carpenter

    Seems to me that the Hawtai/Huatai company is the “Chinese equivalent” of Mitsubishi but with an emphasis on diesels instead of electrics.

    There’s even a tie-in with a Mitsubishi tie-in; Hyundai (which Mitsubishi shared technology with through license until early this century, after Hyundai initially assembled Fords from 1967-1976).

    I think the Chinese government is pushing for consolidation and the purchase of outside brands; I believe this is Hawtai’s planned method of staying independent – buying into and selling Saabs.

    If all goes smoothly, then Saab will remain a small niche player worldwide, unlike the GM brands which all have died (most especially I’m thinking of Saturn, which really gave GM something “different” to market for ahwile – but they were not intelligent enough to capitalize on it).

  • avatar
    CraigSu

    Bertel, please correct me if I’m wrong, but doesn’t current Chinese policy dictate that in order for a foreign make to be sold in China, they are required to have a partnership arrangement with a China-based manufacturer? IOW, Buicks, BMWs, etc. sold in China are also built in China? If so, then Saab would have needed to go this route anyway to enter the Chinese market, except without the investment funds if they had been more solvent.

    • 0 avatar
      Paul W

      You only need a Chinese partner if you want to produce and sell domestically (producing and exporting is less problematic). I think.

      If you’re just looking to sell an imported product that’s fine, but they’ll slap on a hefty (!) import tax.

      Saab has already tried to sell cars in China. It was a total failure. If I remember correctly, they topped out at 800 cars/year.

  • avatar
    KitaIkki

    SINO-Saab

    SINO = Swedish In Name Only

  • avatar
    kid cassady

    Hautai’s focus on clean-diesel technology will be a huge benefit for Saab if they’re doing more extensive tech sharing. Saab desperately needs a good diesel powertrain to make the 9-4X a viable choice in European markets.

  • avatar
    CraigSu

    The SU website has more details of the Hawtai deal for those who are interested. Sounds like a good partner for the Chinese and Euro markets.

    http://www.saabsunited.com/2011/05/what-the-deal-with-hawtai-means-for-saab.html


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