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Chinese Purchase Of Hummer in Doubt

Chinese government opposes purchase; no other buyers in sight

By Mark Huffman
ConsumerAffairs.com

June 26, 2009
Hummer may end up an orphan after all. The Chinese government has reportedly taken steps to block a Chinese company from buying the brand from bankrupt General Motors.

In China, what the government opposes usually doesn't happen.

Earlier this month Sichuan Tengzhong Heavy Industries announced its intention to purchase Hummer and build it for the International market. The large SUV's are especially popular in the Middle East.

At the time some industry analysts cast doubt on the deal, and apparently that doubt was also shared by top officials of the Chinese government. The BBC quotes Chinese National Radio as saying the government intends to block the sale.

The report said government officials are concerned that Sichuan Tengahong Heavy Industries has little or no experience building cars. It specializes in making heavy industrial construction equipment. The government also reported environmental concerns.

GM, which introduced the Hummer in 2000, filed for bankruptcy June 1, saying it would discontinue its Hummer, Saab, Pontiac and Saturn lines as it reorganizes. Saturn quickly found a savior in the Penske Automotive Group, which intends to subcontract the building of the popular cars and sell them through its network of dealerships.

Hummer proved popular with U.S. consumers as recently as 2006, when it helped GM bolster its sagging profits. But sales tanked in 2008 as gasoline prices soared to $4 a gallon.

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