Automotive News

Words of spokesman of China's Ministry of Commerce give a little hope for Sichuan Tengzhong Heavy Industrial Machinery to forward its bid for General Motors's Hummer.

Ministry spokesman Yao Jian told reporters on Monday that "it is rational and normal for Chinese companies to adopt an international outlook," according to Reuters.

"We hope Chinese companies can learn more about international rules and make prudent investments," he said.

Many media reports have run lengthy comments so far saying said little-known Tengzhong could fail to gain government approval as the deal run counter to the stated priorities to promote fuel-efficient technologies. Some others also doubt whether Tengzhong has the experience and resources to turn the Hummer around.

Actually I believe no matter its Tengzhong or Volvo or any other western brand, Chinese firms must be brave enough to take the first step. They have to learn to know what they can do and what not.

Any Chinese buyer would do well to study the marriage between Lenovo Group Ltd. and International Business Machine Corp's (IBM) personal-computer division five years ago. That's a very successful case in my view, with sales revenue of Lenovo-IBM PCs steadily increasing. The purchase of IBM improved Lenovo's product offerings which could take it years if not decades to improve.

So would the purchase of foreign auto brands. Chinese automakers could learn and leapfrog on their technology to compete with foreign makers through acquisitions.

Not to say "buying an established brand with $500 million" is already a worthy investment itself, considering the advertising budget the automaker once spent.