SHANGHAI -- When Hawtai Motor Group Co., a little-known automaker that specializes in SUVs, said Tuesday that it would invest in Saab Automobile AB, Hawtai left two questions unanswered.
First, what does Hawtai really want from Saab? Second, where did it get the money for the deal?
The agreement signed in Beijing by Hawtai and Spyker Cars NV, the Dutch sports car maker that bought Saab last year, surprised industry observers here. Hawtai is a small company with marginal sales.
With its 120 million euro (1.2 billion yuan) investment and its 30 million euro loan, Hawtai will get a 29.9 percent stake in Spyker and the opportunity to build and sell Saab cars in China. But few believe this is what Hawtai really wants.
"Spyker lost 79 million euros 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 today didn't specifically say."
Hawtai's former joint venture with Hyundai Motor Co. provides some clues.
Hawtai, founded in 2000, started building the Terracan and Santa Fe SUVs under its own brand using technology licensed from Hyundai. In 2010, sales of those two SUVs totaled 81,439 units, according to J.D. Power.
Now that Hawtai's partnership with Hyundai has lapsed, one might guess that Hawtai will use Saab's platforms to upgrade its own model lineup. But that is not yet clear.
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 (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 both invested in the deal, hoping to gain a Volvo assembly plant in return.
Naturally, one might guess that Hawtai can borrow money from the Inner Mongolian government or Shandong's provincial government, the areas where Hawtai has its two assembly plants.
But you won't find this information in the announcement that Hawtai and Spyker issued in Beijing. "Obviously neither side has told us the whole story in its announcement," Zhang said.
Let's wait and see what the two companies disclose in the next few days.