China’s Hawtai May Assemble Cars in Spain

MADRID – China’s Hawtai Motor, one-time spurned suitor of Saab in Sweden, may be moving toward producing vehicles in Spain.

Paterna Mayor Lorenzo Agusti and Hawtai representatives signed a memorandum of understanding earlier this month designed to pave the way for an assembly operation in a future free-trade zone in Valencia harbor.

The plan should be viewed with some skepticism, however. Hawtai’s efforts to expand outside China have gone awry before, including its widely publicized attempt to rescue the failing Saab Automobile.

The Chinese auto maker offered to pitch in €150 million ($195 million) for 30% of the Swedish company under then-owner Spyker. But former Saab parent General Motors, which still had say over technology-sharing, blocked the deal because it viewed Hawtai as a competitive threat.

Likewise, the project to turn Valencia harbor into an FTZ remains in its early stages and is fraught with political peril. In addition, Hawtai’s proposal to assemble vehicles from complete-knocked-down kits and ship the finished product to Northern Africa and Latin America appears to make little business sense, given the high transportation costs.

Hawtai Motor is part of the Chinese industrial group Hentong and has a short history. It was founded in 2000 as Ron Cheng Huatai Automobile, then switched to its present name a few years later.

In 2002, it launched an assembly joint venture with Hyundai, but the Korean auto maker ended the partnership when it formed an alliance with China’s BAIC.

Hawtai still uses some of the technology it gained from Hyundai for its models, such as the B35 Bolgheri, a cross/utility vehicle based on the first-generation Hyundai Santa Fe.

Two luxury sedans launched in 2010, the B11 and B21, appear to be the first models completely designed and built entirely by Hawtai.