Saab owner Spyker Cars has signed a partnership with a Chinese vehicle manufacturer which has secured funding and will help restart production.

Car production at Saab's factory in Trollhättan, Sweden, had been on hold over a dispute with suppliers over the company's ability to pay its bills.

Spyker Cars announced on May 2 that short-term funding had been secured, which should allay fears of supplier companies, and announced today that it had entered an agreement with Hawtai Motor Group to form an alliance for manufacturing, technology and distribution in China.

Hawtai will take a stake of up to 29.9% in Spyker Cars investing £110 million.

Victor Muller, chief executive of Spyker and chairman of Saab Automobile, said: "The partnership with Hawtai allows Saab Automobile on the one hand to continue executing its business plan since we secured the required mid-term financing subject to meeting certain conditions, whilst on the other hand it allows Saab Automobile to enter the Chinese car market and establish a technology partnership with a strong Chinese manufacturer."

Production had been halted at Trollhättan during April, leading to potential delays in deliveries of Saabs to fleet customers in the UK.