BAIC Pays $200 Million for Saab Tech

BEIJING — Beijing Automotive Industry Co. (BAIC) said it paid $200 million to buy technology associated with the Saab brand in an attempt to speed the development of its own models.

The nation's fifth-largest carmaker agreed to buy the vehicle platforms of the Saab 9-3 and 9-5 models and other tooling and powertrain technologies from Saab early this month just before General Motors announced it would wind down the Swedish car unit if a sale is not completed imminently.

BAIC said it plans to use Saab's technologies to develop three to four vehicles and three turbo engines over the next three years.

The purchase of technologies was "a wise option" for BAIC, said John Zeng, an auto analyst from consulting firm Global Insight in Shanghai.

"Considering the intellectual property rights and technology know-how it acquired, the deal is worth its price," said Zeng.

BAIC, which earlier negotiated a $2.93 billion credit from the Bank of China, originally said it would offer financial support to Koenigsegg Group AG for the purchase of Saab. Koenigsegg later pulled out of the bidding.

After years of assembly, BAIC, the Chinese partner of Hyundai and Daimler, is among several Chinese carmakers looking at international acquisitions to upgrade technology for self-branded vehicles.

It failed to buy GM's Opel unit in July of this year.

BAIC plans to launch its Beijing-brand models next year, including a mid- to high-line sedan and a sport-utility vehicle.

It aims to double its car sales to 2 million units over the next three years.

Inside Line says: Who would have guessed the denouement of the Swedish auto industry would take place in China? — Vivian Jin, Correspondent