Chinese concern about the Saab deal- Can Saab – Hawtai survive in a star studded Chinese market?


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Saturday, 07 May 2011
Saab's business with the Chinese Hawtai has led to questions in the Chinese media. Experts are cautious about the marriage, the authorities also feared that this may lead to a brick wall.

The Hong Kong-based TV station Phoenix notes on its site that Saab is not Volvo and has no partnership brand and market position.
"The established Chinese car companies are not interested in Saab, therefore, Saab had to end up with Hawtai to make up two companies that both are in need to get out of a difficult situation. But the question remains whether there are chances that the agreement for the two companies would be implemented”


The Television station points to its, the Commission on Development and Reform Commission, NDRC, which approves major transactions between Chinese and foreign companies.
Like when Tengzhong Heavy Industrial tried to buy the Hummer, the agreement between Hawtai and Saab is similar - not reported to the NDRC in advance, and therefore not approved. It is therefore difficult to say whether this project will be approved. Then with will be another hike-up for further, establishment of a joint venture for the manufacture and sale of Saab Cars to be more difficult, according to the Chinese.

Recently, there has been the talk of very strict control on approval of joint ventures for the manufacture of complete cars.

Even now there is the talk of a very long queue for approval of joint ventures projects such as  with Changan Mazda, Guangzhou Automobile and Mitsubishi, Changan and PSA Peugeot Citroen, and Volkswagen plant expansions in Nanhai as well as Jiangsu are all waiting for approval. To then Saab Cars, which does not have that much advanced technology, would be allowed into the manufacture and sale in China is less likely according to the Chinese.

Assessors in the car business think that Hawtais and Saab's agreement on strategic cooperation may suffer the same fate as Tengzhongs purchase of Hummer, and ultimately not be anything at all, according to Phoenix.

Even the South China Morning Post questioned whether authorities would approve the deal.
The newspaper Global Times points to automobile market experts Jia Xinguang who also said that the cooperation is of major concern.

China News engine journalist Cheng Yuan believes that the new Swedish-Chinese constellation can get the tough times as competition increases in the Chinese market.
 As such the question becomes whether companies Hawtai and Saab can make it in a start studded market and if they can even survive.
By Team

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