Chinese group buys Hummer from GM
DETROIT — The Hummer, the iconic vehicle of America’s gas-guzzling SUV era, will soon be owned by a Chinese company.
China’s Sichuan Tengzhong Heavy Industrial Machinery Co. said Tuesday afternoon that it reached an agreement to acquire the brand from General Motors Corp. for an undisclosed amount. Sichuan Tengzhong deals in road construction, plastics, resins and other industrial products, but Hummer would be its first step into the automobile business.
Tengzhong will assume GM’s existing agreements with Hummer dealers, and Hummer will keep its existing management team and remain based in the United States. Tengzhong said it expects to expand the brand’s dealer network worldwide, including to China.
"We will be investing in the Hummer brand and its research and development capabilities, which will allow Hummer to better meet demand for new products such as more fuel-efficient vehicles in the U.S," Tengzhong Chief Executive Yang Yi said in a statement.
Hummer will continue to contract vehicle manufacturing and business services from GM during a transitional period. For example, GM’s Shreveport, La., assembly plant would continue to assemble the H3 and H3T through at least 2010, GM said. AM General LLC in Mishawaka, Ind., makes the larger H2 under contract for GM.
The Hummer sale comes as GM, which filed for Chapter 11 bankruptcy protection in New York on Monday, remakes itself as a smaller, leaner automaker. In addition to the Hummer sale, GM wants to sell its Saab and Saturn brands and will phase out its Pontiac brand, concentrating on its Chevrolet, Cadillac, Buick and GMC nameplates overnight pay day loans.
Hummer was once GM’s most exciting brand. Its brawny styling, derived from the military transport the Humvee, captured the imagination of buyers ranging from Hollywood stars to weekend paint-gun warriors looking to exhibit their ruggedness and ability to afford the $55,000 vehicle. But sales at Hummer have been sliding since gasoline prices spiked last summer. For the first five months of this year, Hummer sales are down 64 percent.
Although Jim Lynch had been expecting that GM would sell, not kill, the Hummer brand, the Chesterfield dealer welcomed the news of a buyer.
"We’ve had a lot of people questioning whether the Hummer brand would be around," said Lynch, the only Hummer dealer in Missouri.
Lynch said he’ll have to "wait and see" how consumers react to an iconic American brand having a foreign owner. British brands Jaguar and Land Rover are owned by Tata Motors Ltd. of India, he pointed out. "I don’t know that it makes as big a difference as it used to," he said.
Post-Dispatch reporter Angela Tablac contributed to this report.
Filed under: news by Pascal