Tony O'Kane | Jun 3, 2009

LITTLE-KNOWN Chinese industrial machinery company Sichuan Tengzhong has emerged as GM's approved buyer for the Hummer brand. Although Hummer will be divorced from General Motors once the deal is finalised later this year, Tengzhong is adamant that much of Hummer's current business structure will remain unchanged.

There will be no corporate reshuffle, nor will Hummer's headquarters move away from the USA. As we reported yesterday, production of the H3 and H3T will continue at GM's Shreveport plant, albeit under contract and with no guarantee of continuation of the arrangement beyond 2010.

Tengzhou is, however, expected to sign an agreement with GM for the long-term supply of parts and manufacturing soon.

hummer_h2_prod_02

Approximately 3000 US jobs are expected to be saved by the deal, and Hummer's purchase by Tengzhong could be just the shot in the arm it needs. GM could scarcely justify hanging onto Hummer while the rest of its empire crumbled, and the automaking giant simply had no money to develop future Hummer products and keep the brand relevant and compliant with increasingly restrictive emissions legislation.

Tengzhou does have money, and it'll be using lots of it to keep Hummer afloat, expand it into new markets both inside and outside of China, and develop the next generation of military-inspired SUVs.

"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," said Tengzhou CEO, Yang Yi.

hummer_h3_01

Its acquisition of Hummer will be Tengzhou's first foray into the world of passenger cars, although with Hummer in its existing form already having a range of ready-to-go products and a wide network of dealers, there isn't likely to be any degradation in quality or sales and servicing support.

It's still too early to assess what impact Hummer's sale will have on the brand's Australian presence, but Holden spokesman Scott Whiffin says more information should surface soon.

"There are no immediate implications for the brand here in Australia but we'll obviously learn more as this process moves forward," Mr Whiffin said.

Tengzhong's purchase of Hummer will be finalised in the third quarter of this year. The amount the Chinese company will pay for GM's luxo-SUV offshoot has yet to be revealed.

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