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Saab, once the vehicle of choice for James Bond, has endured considerably less glamorous exposure of late.

The ailing car maker was forced to halt production at its Swedish plant a month ago after suppliers cut off deliveries due to unpaid bills.

Spyker Cars CEO Victor Muller, who saved Saab from extinction last year, is once again pulling it back from the brink with a rescue package that includes a €150-million lifeline from China's Hawtai Motor Group. Under the deal, Hawtai will receive a 29.9 per cent stake in Spyker, Saab's parent, and will enter joint ventures in manufacturing, technology and distribution in China.

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And so Saab is set to restart production at its plant in Trollhatten, Sweden this week, suggesting the crisis has been averted -- for now.

"Car makers in trouble tend to go through several stages of decay before they go away," said Philippe Houchois, a European auto industry analyst at UBS in London. "There is a long history of entrepreneurs willing to give brands another chance, with limited success."

Analysts were doubtful about Saab's prospects long before it landed with Spyker. The brand had always inspired die-hard loyalty among fans drawn to its design and powerful engines. But as that customer base began to shrink, Saab (under full GM ownership since 2000) tried to reach out to a broader market, attempting the delicate balancing act of maintaining its own identity while cutting costs through the use of common GM components. Loyal followers began to stray and Saab "lost its brand DNA," said Houchois.

"It's an equation Saab didn't get and frankly a lot of brands don't get," he said. "When they tried to branch out they got into a new set of competitors which frankly had more appeal, like BMW or Volvo. It became an 'in between with nowhere to go' kind of brand."

Spyker lost €79-million in the first quarter and said it would not meet its target to sell 80,000 cars this year. Before the cash crunch, it had predicted a return to profitability by 2012 with the sale of 120,000 vehicles.

Saab will likely produce 60,000 cars at most this year, a level that will have "serious implications for cash flow," said Martin Crum, a financial analyst at Amsterdams Effectenkantoor BV. The company will be lucky to produce and sell 100,000 cars in 2012, he added.

With new financing, Spyker may be able to reposition Saab as a premium niche brand in the same category as the BMW or Audi, but it won't be easy.

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"You need a lot of money to develop cars like that," said Crum. "In Saab's case those costs are spread out over fewer cars.

"BMW is selling a million cars a year. For them it's a lot easier to gain back their development costs."

Hawtai is the second Chinese firm to take a stake in a Swedish car company after Geely Holding Group bought Volvo from Ford last year. But the opportunities for Saab in China, already oversupplied with carmakers, will be limited Houchois suspects.

"Saab is irrelevant in China," he said. "The only way to increase volume is to increase price and premium but the Chinese are so sensitive to brands they may still worry they are seen as the guy who couldn't afford the BMW."

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