Hummer going global under Tengzhong’s watch
Published October 11, 2009
According to Xinhua:
Tengzhong Heavy Industrial Machinery Co, the buyer of General Motors Hummer brand, will hopefully clear government approval of the deal as early as the end of this year, the companys CEO said Saturday.
The company will try to parry the unfavorable oil-guzzling image of Hummer and cultivate markets outside the United States, according to Tengzhong CEO Yang Yi.
If everything goes smoothly, we will be able to get approval from Ministry of Commerce (MofCom) in the fourth quarter (of this year) or at some point in the beginning of next year, Tengzhong CEO Yang Yi, who was in Detroit for the signing of the acquisition deal, told China Daily in a telephone interview.
MofCom said Saturday that it has not yet received application about Tengzhongs bid for Hummer.
Currently, the Sichuan province commerce office is preparing to report the situation to the MofCom, and because the specifics of the purchase agreement are unknown yet, for now (the ministry) will not give any comment, the State radio cited an unnamed MofCom official as saying.
General Motors Co signed a deal Friday to sell its iconic but tarnished Hummer brand to an investment partnership headed by Tengzhong, a privately owned machinery manufacture in southwest Chinas Sichuan province.
The deal still needs approval from the Chinese government, including the MofCom, which holds the ultimate authority over such acquisitions.
Hummers daunting oil tanks are an apparent challenge to Beijings efforts to foster energy-efficient consumption behavior. The Chinese government halved the purchase tax on cars with 1.6 liter or smaller engines earlier this year to encourage sales of small vehicles.
Yang said his company will try to make Hummer adapt to the new trend.
Tengzhong has been aware of the importance of energy-efficient vehicles.
A series of fuel-efficient vehicles, including electric models have already been under development. Environment-friendly products will be introduced to the market soon, he said, without elaborating.
Tengzhong will devote marketing efforts to areas outside the United States, where sales of Hummer plunged by 64 percent by far this year from a year earlier.
Tengzhongs track record shows little experience in passenger vehicle manufacturing. Its is a manufacturer of heavy machinery equipment, including special-use vehicles, road and bridge components and constructions as well as energy industry equipment, according to the companys website.
But Yang said this would be no problem. The company has already had several automobile-related acquisitions prior to the Hummer deal, and plans to focus more on high-end sport-utility vehicles in future development, he noted.
The funds for Hummer acquisition mostly come from Tengzhongs own assets while the rest will be financed through an investment firmÃ¯Â¼according to Yang.
The CEO refused to disclose any financial details. Sources familiar with the deal said the sale is worth $150 million.