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December 24, 2009

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BAIC eyes benefits in Saab tech

BEIJING Automotive Industry Holding Co said it paid US$200 million to buy technology from Swedish car maker Saab as the Chinese firm drives up its effort to accelerate the development of its self-branded vehicles.

BAIC plans to use Saab's technology to build three to four vehicles and three turbo engines over the next three years.

The Beijing-based firm agreed to buy the vehicle platforms for the Saab 9-3 and 9-5 models and other tooling and powertrain technology from Saab early this month before United States-based General Motors Corp announced it would shutter its Swedish car unit.

The purchase of the technology would be "a wise option" for BAIC, said John Zeng, an auto analyst with consulting firm Global Insight in Shanghai.

"Considering the intellectual property rights and technology it acquired, the deal is worth its price," said Zeng. "Saab's technology is valuable for Chinese auto makers."

But Zeng expressed doubts "whether BAIC would be able to make good use of the technology in its own models."

After years of doing assembly work, BAIC, the Chinese partner of Hyundai Motor Corp and Daimler AG, is among Chinese car makers looking at overseas acquisitions to get technology.

BAIC, which has 20 billion yuan (US$2.93 billion) from the Bank of China, earlier teamed up with Koenigsegg Group AG to buy Saab. Koenigsegg later pulled out of the bidding.


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