Will the Chinese govt block the Hummer purchase?
Various Chinese websites were commenting yesterday on Sichuan Tengzheng’s purchase of Hummer, and the possibilty that the Central Government may actually block the purchase.
For a Chinese company to buy a large overseas company, such as Hummer, then they have to prove that they can, or at least try to, turn the venture into a profit making one. The purchase of Hummer by Sichuan Tengzheng goes against a recent government plan to consolidate Chinese automakers into a ‘fighting few‘ rather than the current dispora of over a 100 manufacturers. The government is also pushing hard to make Chinese car makers produce more energy effecient vehicles, something which the Hummer is far from being.
Tengzheng is going to show a comprehensive plan to the Ministry of Commerce, the department that approves or disapproves acquisitions over 100 million USD, very soon otherwise it might not get approval for the deal. Tengzhong has reportedly already handed over 100 million USD to GM as a down payment, and expects the deal to be completed by September 2009.
Tengzhong plans to spend 500 million USD on acquiring the Hummer brand, and then plans to spend a further 450 million RMB (80million USD) on building a Hummer factory in Chengdu city. Tengzheng’s CEO, Mr. Yi Yang, plans to spend more on R&D to make the Hummer brand more fuel effecient, and to improve it’s standing in the world market.
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I think China has a huge market for Hummer , therefore Tengzheng bought over the company.. I think GM clash not because of its products but its high cost employees, strong labor union and poor productivity ( Just imagine the Camaro in Transformer 1 still not yet in production .. and the Transformer 2 is on screen soon in June ).. Product wise GM has great cars.. many GM models are legendary .. Corvette Camaroos.. Hummer etc etc ..
I think match GM products to China Productivity & its low cost employees …things clap that’s why GM China doing so well.
Plz show u r all vehicles and there features ,facilities and how much sales in year (2065)
Madhu, Im getting in my Delorean now dude, expect a reply soon.
@ Ooi,
The Chinese government is already discouraging the purchase of gas guzzlers and the Hummer will face considerable competition from cheaper and better products from the other brands, both local and foreign. Chinese car companies already have designs that resemble the Hummer and Japanese companies like Toyota, Nissan and Mitsubishi offer cheaper and better products.
People who buy light duty vehicles make decisions differently from buying machinery.
Hummer is done in America. Consumers here no longer have an interest in their vehicles. Any buyer of Hummer is getting a small company with few sales and a product not much respected at home. Good luck.
The Chinese government would do well to block the deal. $500 million is far too high for a dodo. Why they would have any more success in China is beyond me. The cars are ugly and excessive Americana. On second thoughts, they’ll go a long way in China!
Well, well, well, they are signing the last page of contract..I wish to see Hummers roar in Tibet Tankula ,Gobi desert.. running on the land of dragon.. Hummers find their 2nd home in Asia.
I don’t think the Beijing government will approve this purchase. It would be in direct contradiction to their efforts, such as the State 863 plan, to promote an environmentally-friendly auto industry. And it would be a setback for the ongoing pillar industry consolidation.
Surely they don’t want to be perceived as hypocrites, or state bureaucrats that can be easily bought off.
Whats more, efforts to make the Hummer stop guzzling gas is like trying to get Pandas to stop chomping on bamboo.
They already do dont they? The Ministry of Communications bought a fleet a few years ago for setting up communications lines in remote places.