* SAIC Motor may take passive stake in Saab
* Ill-fated investment in Ssangyong weighs on its decision
China's largest automaker SAIC Motor group (600104.SS) may take a passive stake in Saab Automobile [GM.UL] by teaming with luxury sportscar maker Koenigsegg, a source with knowledge of the situation said on Tuesday.
SAIC, a General Motors' China partner, is interested in buying into the U.S. automaker's Swedish unit, but its ill-fated investment in South Korea's loss-making Ssangyong Motor (003620.KS) years ago, weighs on its decision, the source who declined to be identified due to the sensitivity of the issue, told Reuters.
SAIC is considering taking a stake in Saab but has not made up its mind or the size of any possible investment, said the source.
If it finally decides to go ahead, it will most likely be the parent company rather that the listed SAIC that would take a stake in Saab.
Koenigsegg struck an accord in June to buy Saab from General Motors, backed by U.S. and Norwegian investors. [ID:nLG827751]
In August, the Detroit automaker and Koenigsegg said they had a deal ready but questions regarding financing remained.
Sweden's Dagens Industri business daily reported late on Monday that a Chinese car manufacturer would be going in on the Saab deal with Koenigsegg as part owner. It quoted an unnamed source as saying that the unnamed investor had helped cover what is understood to be a 3 billion Swedish crown ($420 million) gap in financing for the purchase. [ID:nL7609350]
There was a big possibility that the SAIC Motor is the Chinese investor, the paper added.
A SAIC spokeswoman declined to comment on the speculation.
ONCE BURNED TWICE SHY
Major Chinese automakers, including Beijing Automotive Industry Holding Corp, have attempted several overseas acquisitions in recent years with mixed results.
SAIC has successfully launched a mid-range sedan line, the Roewe, developed on the basis of technologies acquired from defunct British car maker MG rover.
From January to June, sales of its own-brand Roewe and MG cars jumped 276 percent to more than 40,000 units, according to company data.
But a huge write-off for its 51 percent holding in loss-making Ssangyong, which has been under court receivership since February, dented its bottom line in 2008 and the first six months of this year.
Chery Automobile, Hunan Changfeng Motors Co (600991.SS) and several other Chinese automakers have held initial talks with European or U.S. auto brands but refrained from making any commitments, industry executives had said.
So far, Sichuan Tengzhong Heavy Industrial Machinery, a little known Chinese heavy machinery maker, is the only one that had unveiled an tentative deal to take over GM's premier off-road brand Hummer.
Geely Automobile Holdings (0175.HK) has also submitted a detailed bid for Ford Motor's (F.N) Volvo car units, a Swedish newspaper reported last month. The Chinese maker, however, did not confirm or deny the report. (Reporting by Fang Yan and Jacqueline Wong)