Hummer has a dark-horse buyer from China

Shanghai, June 3 (Gasgoo.com) General Motors' Hummer ("Bold Horse" in Chinese) is a brand of an unusual breed, and a dark-horse Chinese buyer of this American maker of gas-guzzling, military-style SUVs has taken the auto industry by surprise in China and the United States.

Sichuan Tengzhong Heavy Industrial Machinery Co., which yesterday said it was buying the General Motors SUV unit, is only four years old and has just 4,300 employees. The vehicles it makes are cement mixers and tow trucks, not passenger cars. The company is reportedly privately owned and some Chinese comments online asked whether China's military financed the Hummer takeover.

Tengzhong is based in China's mountainous southwest, far from the east coastal boom towns – the heart of China's auto industry. Most auto industry executives and experts said they have never heard of this company. Keeping Hummer's production in the U.S., the little-known Chinese company will have to go over daunting hurdles in reviving this "Bold Horse."

Soaring gas prices have battered sales of the boxy vehicles, which roar along on oversize tires and can weigh up to five tons. And there is the image factor. Hummers are based on U.S. military vehicles that gained fame during the 1991 Gulf War, a link that fuels their macho appeal, according to The Associated Press.

It is unclear whether U.S. buyers who love their attention-grabbing looks and ability to drive over boulders will be as gung-ho if their maker is an obscure Chinese company. Even Hummer-owners in China may think their cars are downgraded after their pet vehicle brand is sold to a machinery maker.

More and more Chinese people are seeing their imported vehicles of renowned global brands as the status symbol. A H3, through a specialty importer, is sold in China for as much as 900,000 yuan ($132,000), a price that is nearly 20 times the annual income of an average corporate executive in the country.

"From the point of view of supporting Chinese products, we are very glad a Chinese company is capable of buying the brand," a Shanghai entrepreneur, who owns a H3, said with mixed feelings. "From a selfish point of view, I don't really want this to happen."

However, Tengzhong plans to develop more fuel-efficient Hummers for the U.S. market, CEO Yang Yi said in a statement Tuesday. Hummer's CEO, James Taylor, said the company wants to launch an "aggressive global expansion." The company said it expects for expansion of its dealer network, including to China.

Monthly auto sales in China, the world's most populous country, has surpassed those of the United States so far this year and set a record of 1.15 million units in April. Sales of SUVs and other luxury models are growing at double-digit rates.

The booming auto market in China could help to revive Hummer, said an industry analyst. "If they come to China and are manufactured here, lower the price and improve the fuel efficiency, then there should be a market here," he said.