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December 15, 2009

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Home » Business » Auto

Beijing Auto seals deal to purchase Saab assets

BEIJING Automotive Industry Holding Co yesterday announced it has clinched a deal to buy some assets under the Saab brand from General Motors Corp.

Beijing Auto, China's fifth-largest auto maker, said it would use Saab's technology in the making of its own brand vehicles after acquiring the Saab 9-3 and 9-5 models as well as other tooling and powertrain technologies.

The purchase of Saab's assets may signal that Beijing Auto has little chance to bid to buy all of Saab, leaving the Swedish car maker a step closer to liquidation that may affect more than 3,000 jobs in Sweden.

But John Zeng, an auto analyst at consulting firm Global Insight in Shanghai, cautioned that Beijing Auto may find it difficult to integrate Saab's technology into the production of its own brand vehicles.

"Whether Beijing Auto would make good use of those technologies for its own brand vehicles depends on localization efforts. But it would also be very difficult," Zeng said.

Beijing Auto earlier said it remained keenly interested in Saab after Koenigsegg, a small Swedish car builder partly owned by Beijing Auto, pulled out of a tentative deal to buy it last month. But now its plan to drop the bidding for the whole of Saab may make it more difficult to sell GM's money-losing Swedish unit, Zeng noted.

GM yesterday said it is now focusing on selling the rest of the Saab to another firm, with sports car maker Spyker Cars NV emerging as a frontrunner, Bloomberg News said, citing people familiar with the situation.

Beijing Auto, the Chinese partner of Hyundai Motor Corp, plans to launch its own brand vehicles as part of the government push to improve its own auto industry to make it globally competitive.

The company plans to launch new models under its own brand starting in 2010, including sport-utility vehicles and passenger cars developed from Hyundai and Mercedes-Benz models.

It has a 10-billion-yuan (US$1.46 billion) financial subsidy from the Beijing government, of which 3 billion yuan will be spent on rolling out its self-brand vehicles.

The firm is also working on clean energy vehicles.


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