Another Setback for GM's Hummer Sale to China

Posted by: Bruce Einhorn on February 24, 2010

Seems GM will need to find somebody else to take Hummer off its hands. The Chinese government isn’t going to approve a proposed sale to Sichuan Tengzhong, Bloomberg News reports today, citing two people briefed on the deal. The sale of the notorious gas guzzling Hummer wouldn’t be in line with Beijing’s aim to promote greener cars. “It’s only normal for the Chinese government not to approve the deal,” HIS Global Insight analyst Lin Huaibin told Bloomberg. “To allow this type of vehicle on a large scale isn’t in line with government policy.”

That’s been clear for a while, as my colleague Frederik Balfour wrote back in June. “You have got to give Beijing credit for its green stance against gas guzzlers,” he wrote. “Indeed, the government already has higher fuel emissions standards than most U.S. states, and has introduced tax breaks to encourage car buyers to buy vehicles with smaller engines.”

To be sure, the Tengzhong-Hummer deal isn’t officially dead yet, and assistant commerce minister Wang Chao told reporters in Beijing today that the ministry had not yet received an application for an acquisition. No formal application means no formal rejection yet. Hummer is a side show, though, compared to the really important Chinese auto deal, Geely’s possible acquisition of Volvo from Ford. The two had hoped to sign a deal before the Chinese New Year on Feb. 14. That deadline has come and gone and we’re still waiting. Missing out on Hummer is no big loss for China; a Volvo loss would prove to be far more damaging to Chinese ambitions to be a play in the global auto industry.

Reader Comments

Jack

February 24, 2010 12:05 PM

There's a common belief in China that anything the American are anxious to sell isn't worth buying.

ckehne

February 24, 2010 12:22 PM

It was a mistake to allow the Hummer to be built and sold in the first place. Why doesn't business in the US get it? Less is more.

jim

February 24, 2010 1:09 PM

for some of those who think hummer is high tech and a security issue: let them eat cake. no body wants it!

citracyde

February 24, 2010 1:42 PM

I'm sure their is a better buyer for this company. A entity with more foresight than the engineers at GM or the cheap equipment producers of china.

Wired magazine has continuously chronicaled what can be done with stock hummers in the name of efficiency and saving the planet. There are actually people willing and able to apply new, real technology to this platform and remove the gas guzzler stigma.

See this article:
http://www.wired.com/autopia/2009/04/hybrid-hummer-c/

Steven

February 24, 2010 1:48 PM

Many US rednecks said the company should not be sold to commie China. I bet Chinese gov is listerning to them.

Government Motor can keep Hummer now.

HAHA

Steven

February 24, 2010 2:00 PM

Missing out on Hummer is no big loss for China?

No,no, no. That's not even a lose, on the contrary, that's a big gain for China. That means China does not want to spend real money on garbage.

Russ

February 24, 2010 6:24 PM

I dun heard that the they gonna stop makin Hummers, so I wrote this here ditty, that I might not get the punching fits.

Ode to my Hum-V

Soaring eagles cried today
Cause Hum-V is goin away.
I begged GM to help it stay,
but the Chinese welched, they must be gay.

Oh Hum-V, so many memories
Like chasing possums into trees.
Flying the Stars and Bars in the breeze
while listening to 98 Degrees.

rest is at my blog:
http://www.mepreport.com/2010/02/farewell-hummer/

Rob

February 25, 2010 4:19 AM

Hey Citracyde, ever hear of a guy called Isaac Newton? F=ma? It's a fundamental law of our natural universe. All the good will and smart guys in the world can't change the fact that for the Hummer, the "m" in the equation is what it is....

Gary

February 25, 2010 10:56 AM

See
http://www.amgeneral.com/vehicles/hmmwv/

GM never owned humvee in the first place, and it is still being produced.

What GM owned was marketing rights of the name Hummer, and to manufacture and sell a pretend version based on the Tahoe platform. Typical GM marketing phony balony. The Chinese figured it out.

Frank langone

February 25, 2010 4:55 PM

I drive a H3 and I get 16 in the city and 21 on the highway. This is great milage for a larger safe comfortable suv.

The_Observer

February 25, 2010 5:20 PM

The Chinese Government has done Sichuan Tengzhong a favour. Sichuan Tengzhong is a small tool maker that is a China based and has little overseas manufacturing experience making tools let alone cars. They were going to pay GM cash for Hummer and borrow money to keep running the company in the USA. This sounds like a disaster waiting to happen.

BubbleHead

February 27, 2010 6:53 PM

With so many bubble heads here in America, why does not GM just set the Hummer on an IPO? The S&P is booming through the roof, and Dow going to 50,000 again, Hummer will be the greatest IPO in history ever.

Paul Schroeder

February 27, 2010 8:52 PM

I own a H3 and am very happy with the quality ,look , fit and finish and the fact that I get 20 mpgs with a American built beauty that I get compliments on everywhwere I take it!

John A,

March 1, 2010 10:57 AM

Good decision by the Chinese. Why would anyone want to buy Hummer? I can only suspect there is machinery, land and other assets that might have value for a purchaser. But Hummer as a car is finished.

owup74

March 5, 2010 8:10 AM

GM should not be distressed over it. There is another company who is just itching to get their hands on it what was the name of the company??? oh yeah its Raser tech. There the ones who built a couple prototypes that allowed Hummer to get pretty good gas millage using the GM Volt concept and its an American company The Chinese company who seeks to buy it has no experience in the auto industry and with Hummer hemorrhaging money it would drag them down to bankruptcy. Then the Chinese government would be spending billions bailing them out. For GM it would be a better PR move keeping it American and the company who wants the it so badly will most likely pay more for it which is more money for GM. And as for Raser who really want it last reported they had over 20,000 back orders pending the purchase of Hummer. So by time all is said and done this deal failing could really benefit every one. I do hope Hummer survives all this I got to drive one once and was thinking if they would build the seats (with extra armor underneath them) in the Military version then the VA may be able to save money on VA Compensation for bad backs from troops who drive and ride in them for excessively long periods of time. Sigh oh well just a though.

Van Doren

March 10, 2010 12:47 PM

What a disgusting car. Strictly for selfish lard-asses.
If you own one, you're a jerk.
If you own the company, you're a loser.
We all knew it. Now you know it too.
Karma! Suck on it!
HA HA HA HA HA

Curt Doolittle

April 4, 2010 9:48 AM

The H3 is an awesome vehicle. It's safe, comfortable to drive, it's great for northern winters, and hauling stuff to my rural home, and mechanically is nothing more than a pickup truck with full metal body. It gets 16mpg.

The H3 is a Jeep you can even drive on the highway.

Yes, they should IPO the company as a separate entity.

US

April 14, 2010 4:33 AM

HUMMER is a lot better than lada.

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