SHANGHAI -- When Hawtai Motor Group Co., a little-known automaker that specializes in SUVs, said last week it would invest in Saab Automobile AB, Hawtai left some questions unanswered.
What does Hawtai really want from Saab? Where did it get the money for the deal and what could that mean for Saab's future?
The May 3 agreement to form a joint venture between Hawtai and Spyker Cars NV, the Dutch sports car maker that bought Saab last year, involves manufacturing, technology and distribution and allows Saab to enter the Chinese market.
The tie-up surprised industry observers here.
Hawtai is a small company with marginal sales and an uncertain path for Saab. The agreement provides 150 million euros, or about $223 million, in funding for Saab. In exchange, Hawtai will get a 29.9 percent stake in Spyker.
But few believe this is what Hawtai really wants.
"Spyker lost 79 million euros [about $117 million] in the first quarter, which means it is not worth that much money," said John Zeng, J.D. Power's Asia analyst. "I believe [Hawtai] wants Saab's technology, but the announcement the two companies put out didn't specifically say."
Hawtai's former joint venture with Hyundai Motor Co. could provide some clues about Saab's future.
Hawtai started building the Terracan and Santa Fe SUVs under its own brand using technology licensed from Hyundai. In 2010, sales of the two SUVs totaled 81,439 units, according to J.D. Power.
Now that Hawtai's partnership with Hyundai has lapsed, will Hawtai use Saab's platforms to upgrade its own model lineup? The answer is unclear.
Hawtai says it has its headquarters and r&d center in Beijing, and two production factories in Ordos, Inner Mongolia; and Rongcheng, Shandong province. It says it can build 350,000 vehicles and 300,000 diesel engines, as well as 450,000 automatic transmissions a year and aims to raise capacity to 1 million vehicles, 1 million engines and 1 million automatic transmissions by 2015.
Which leads to the second question: Who are Hawtai's financial backers?
"Hawtai sells a small number of vehicles a year and that makes me wonder where it got the money," said Yale Zhang, former head analyst with CSM Worldwide and now managing director of Automotive Foresight in Shanghai.
Each province in China is eager to cultivate its local auto industry, and would be happy to offer financial support to local automakers that expand through acquisitions.
Zhejiang Geely Holding Group Co.'s $1.8 billion purchase of Volvo Car Corp. illustrates the point. The city of Daqing in northeast China and the Jiading district in suburban Shanghai invested in the deal, hoping to gain a Volvo plant in return.
Hawtai could borrow money from the Inner Mongolian government or Shandong's provincial government, the areas where Hawtai has its two assembly plants.
Meanwhile, Saab plans a global public relations blitz to introduce its new Chinese partner and its other likely new investor, Vladimir Antonov from Russia.
The plan will include Saab Chairman Victor Muller and will target major media and auto shows. It will be similar to an effort last spring by Muller to show that Saab is alive and making vehicles.
"If and when Antonov gets involved, we want to include him," said Michele Tinson, a spokesman for Saab Cars North America. "We want people to meet him and know who he is. Obviously we want to include our Chinese joint-venture partners as well in our tour."
The global public relations campaign is on hold until the European Investment Bank approves the transfer of Saab assets to Antonov. Additionally, several government agencies must approve the joint venture with China's Hawtai Motor Group.
Tinson said the company is hopeful the media blitz will start in several weeks.
Production of the new Saab 9-3, due to start in October 2012, will begin in China in 2013 for sale in the local Chinese market. Saabs produced in Sweden will be sold in Europe and elsewhere.
Hawtai said the companies would set up a joint venture with a sales target of 100,000 to 200,000 cars per year in China.
Is Saab's latest plan clear and is China an obvious answer for the Swedish brand?
Said CSM's Zhang: "Obviously neither side has told us the whole story."
Paul McVeigh and Rick Kranz contributed to this report