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China cash will help Saab

Saab has now formed a strategic alliance with the Hawtai Motor Group.

The Swedish brand has struggled for cash since it was sold by General Motors to the Spyker sports car company and its entreprenurial owner Victor Muller, but has now formed a strategic alliance with the Hawtai Motor Group.

The Chinese company is investing a total of $203 million in Saab through a 29.9 per cent shareholding and a loan that matches an earlier financial boost from the Gemini group in Europe.

The new money means Saab's production line at Trollhatten will begin operating again next week after a shutdown triggered by component companies that had not been paid.

"Production is going to re-start at the earliest on Monday, and the latest on Tuesday," Saab chairman, Victor Muller, says in a telephone hook-up from Europe.

He believes Saab now has the cash it needs to go forward, as well as a strategic partner that will produce the 9-3 in China and also handle distribution of other Saab models in the world's fastest-growing car market.

"All things being equal, I hope we've seen the last of the growing pains," says Muller.

He is enthusiastic about everything from the prospects of Saab's much- needed baby car, the 9-2, to the potential for a large SUV for China, but says it is too early to get into detail.

"We're currrently putting together a business plan for the joint venture."

Muller says Saab was approached by a dozen companies about some sort of partnership, but Hawtai was chosen because it is a similar size to Saab and has similarly aggressive management and growth plans.

"We have been courted by at least a dozen individual mnaufa for cooperation in China.We chose this one for many reasons, but one in particular is that it is a very entreprenurial company. Their size is very attractive. So they are a very equal partner."