Saab Owner in Deal with Dongfeng to Make EVs, Plug-in Hybrids

National Electric Vehicle Sweden AB the Chinese-Japanese venture that owns the former Saab Automobile is partnering with Dongfeng Motor Corp. to jointly develop electric and plug-in hybrid cars in China.

Financial terms of the strategic cooperation agreement were not disclosed. The deal includes building an R&D facility and assembly plant in Tianjin and setting up a sales and service operation in China.

Reuters reports that NEVS said in June it had arranged two unnamed Chinese partners who pledged a combined 1.2 billion yuan ($188 million) to build the research center and a factory with potential capacity to make 200,000 cars per year.

NEVS has struggled to relaunch Saab as an electric-car company since acquiring the bankrupt carmaker's assets in 2012. NEVS suspended carmaking operations in Sweden in May 2014. Media reports last December said India's Mahindra & Mahindra Ltd. had filed papers in Sweden to gain control of the Chinese-Japanese venture.

Reuters notes that an assembly plant in Tianjin would enable NEVS to tap Dongfeng's extensive supply base there. Dongfeng acquired a 14% stake in PSA Peugeot Citroen last year and participates in carmaking joint ventures in China with Honda, Kia, Nissan and Renault.