Saab Automobile is raising fresh hopes in its Swedish hometown as the mothballed brand gears up for another revival, more than a year after it went bankrupt.

Saab's new parent, owned by a Chinese renewable energy investor, intends to start producing 9-3 sedans and convertibles in August, according to a letter sent to suppliers and obtained by a local news daily. Sales of the diesel-powered vehicles are intended to help fund Saab's conversion into an electric-car manufacturer.

Trollhattan, where Saab is based, has had a rough time since assembly lines were halted nearly two years ago. Approximately 3,400 employees 7 percent of the city's population worked for Saab there before its bankruptcy. The parking lot at the once-bustling factory is now all but abandoned.

Small chance

The new owners aim to supply China with electric vehicles.

After adding the 9-3X wagon later this year and electrics based on the 9-3 in 2014, the goal is to produce 120,000 cars annually by 2016, according to the letter from National Electric Vehicle Sweden AB, or Nevs, which bought Saab out of bankruptcy last August. That target would come close to the brand's 2006 production peak of 133,000 autos.

"The likelihood of this project turning into a success is very small," said Ferdinand Dudenhoeffer, director of the Center for Automotive Research at Germany's University of Duisburg-Essen. "Even in China, selling electric cars is a very difficult business."

Saab's production goal exceeds the 107,200 electric vehicles assembled worldwide last year, according to market researcher IHS Automotive.

The plan hinges on China, where the government plans to set up 400,000 recharging stations in 20 cities by 2015, according to a five-year development plan for electric autos. China's goal is to generate cumulative sales of EVs and plug-in hybrid vehicles to 500,000 by 2015, which would require a sharp uptick of EV sales.

Last year, 12,791 electric cars and plug-in hybrids were sold in China, according to the China Association of Automobile Manufacturers.

"China realizes the need to meet the climate challenges through electric vehicles," Mikael Oestlund, a spokesman for Nevs, said by phone.

Earlier this month, Nevs announced that the city of Qingdao will invest US$ 307 million (1.9 billion yuan) in exchange for a 22 percent stake in Nevs. A joint venture in China was to make further investments. Nevs plans to build a second factory in Qingdao once production in Trollhattan reaches capacity.

Trollhattan trolls

Nevs is in turn owned by National Modern Energy Holdings Ltd., a Hong Kong-based company that also controls renewable power-plant builder State Power Group, which last year opened a plant in Beijing to make batteries for cars and buses.

Saab and Trollhattan are inextricably linked. In the 1980s, stickers saying "Made in Trollhaettan by Trolls" became popular among the brand's fans. Replicas are still available on a shopping website for about US$ 7.

After Saab went bankrupt, unemployment in Trollhattan soared to 16 percent, the highest level in Sweden and almost double the national average, according to the city. Youth unemployment now stands at 32 percent. The revival plan could create as many as 2,500 jobs in the factory and at suppliers and other companies in the area, according to one estimate.

Swedish parts makers are supportive, even though they suffered in Saab's bankruptcy. The return of car production to Trollhattan could boost prospects for the country's auto industry, which is currently reliant on Volvo Car Corp., now owned by China's Zhejiang Geely Holding Group Co., and truckmakers Volvo AB and Scania AB, said Fredrik Sidahl, head of Sweden's parts supplier organization FKG.

"We must have a dynamic in Sweden in terms of material and components, and a second automaker would bring that dynamic back," said Sidahl. "This market is completely dead today."