Hawtai appeared to have rescued Saab from the brink of collapse last week when it agreed to pump €150m ($211.9m) into the troubled company.
But the deal was met with scepticism in China and Sweden amid doubts over Hawtai’s ability to fulfil the agreement.
Spyker Cars, the small Dutch company which bought Saab from General Motors last year, announced on Thursday that the deal had been cancelled.
“Since it became clear that Hawtai was not able to obtain all the necessary consents, the parties were forced to terminate the agreement,” said Spyker.
The Dutch company said it would continue talks with Hawtai but on a non-exclusive basis, allowing it to enter negotiations with other potential Chinese partners.
Production has been halted at Saab’s main production facility in Sweden for the past month after some suppliers stopped deliveries in protest over unpaid bills.
Spyker said on Thursday that production would resume once fresh financing had been secured, cancelling previously announced plans to resume output this week.
This raised doubts over whether Hawtai would receive Beijing’s blessing for its plan to buy a 29.9 per cent stake in Saab.
Bill Russo, head of Synergistics auto consultancy in Beijing and former head of Chrysler in China, says deals in China “are never firm until you have all the approvals”.
“A foreign company can often be surprised by a deal they thought was done -- but is not done – because ultimately the authority is not in the hands of their partner, but in the hands of the government.”
Beijing’s central planning agency, the National Development and Reform Commission (NDRC), which must approve such deals, may have been sceptical that Hawtai had the ability to manage a loss-making foreign brand, analysts said.
Some Chinese carmakers have sought access to western technology through acquisitions and partnerships, including last year’s deal by Geely to buy Volvo Cars of Sweden from Ford.
However, Tang Nan, Shanghai-based auto analyst with Tianxiang Investment, said it was becoming tougher for foreign companies to do such deals in China.
“Chinese companies are not that eager to find global partners and foreign companies have to face this change, and be realistic if they want any deal with Chinese auto firms,” she said.
Chinese regulators last year rejected a bid by GM to sell its loss-making Hummer brand to a little known heavy machinery company, Sichuan Tengzhong Heavy Industrial Machinery.
In addition to its Chinese talks, Spyker is also in negotiations with the European Investment Bank, its biggest creditor, and the Swedish government over a proposed investment by Vladimir Antonov, the Russian financier.
Analysts were sceptical about the Saab-Hawtai tie-up because Hawtai, based in Shandong province, is a relatively small and recent entrant into the highly fragmented Chinese car industry.
The Chinese government is keen to encourage consolidation and has focused its support on a handful of bigger, mostly state-owned carmakers.
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