Sichuan Tengzhong Heavy Industrial Machinery Co., the Chinese buyer of General Motors' Hummer brand, expects approval for the deal by early 2010, countering suggestions that the Beijing government may veto it, according to China Daily. The company also plans to introduce more fuel-efficient models, including electric vehicles in the near future, the state-run newspaper said, citing Chief Executive Officer Yang Yi.
Tengzhong agreed to buy the brand from GM last week to add sport-utility vehicles to a product lineup that includes bridge parts and construction equipment. The company may struggle to win Chinese approval for the deal because of a government push to build more environmentally friendly vehicles, said John Zeng, a Shanghai-based analyst at IHS Global Insight.
"Whether it will be approved will hinge on how they develop the next generation of fuel-efficient models," he said. "The existing Hummer models don't fit the Chinese government's direction for fuel-efficient vehicles."
Tengzhong will own 80% of Hummer, according to a statement on GM's website, whilst Chinese entrepreneur Suolang Duoji will hold the rest. The sale is worth 150 million USD, according to people familiar with the deal – about 70% less than what GM valued the brand at in court.
Tim Payne at Brunswick Group Ltd., an external spokesman for Tengzhong, has been unavailable for comment, but the Chinese Ministry of Commerce said on October 10 that it hadn't yet received an application for the Hummer bid from Chengdu, China-based Tengzhong, according to China Daily.
Full story in English
News category: China
Published on this site: Oct. 13, 2009
Source: bloomberg.com