Hummer Purchase Raises Eyebrows in China
GM’s announcement that it will sell Hummer to an obscure Chinese machinery company called Sichuan Tengzhong Heavy Industrial Machinery Co. is raising a lot of eyebrows in China.
Tengzhong Heavy Industrial is only four years old and employs just 4,800 people in China, but that’s only the beginning. China’s state-run media has hammered the very notion of the acquisition, calling it a “snake trying to swallow an elephant.” While some claim there is a growing market in China for Hummer’s behemoth gas-guzzlers, the brand sold only 547 vehicles there last year.
The Hummer makes sense as a status symbol, certainly, but that status has been highly eroded lately, with U.S. sales plunging from more than 71,000 vehicles in 2006 to 27,468 in 2008. Global sales fell by 62% in the first part of this year, and it’s not clear where Tengzhong expects to earn its money back.
Numerous Chinese agencies will have the final say about the deal, and it could be a hard sell, considering China is trying to consolidate its car manufacturers and promote more efficient vehicles for its rapidly expanding population.
One potential theory that’s being bandied about: Tengzhong is trying to nab itself press coverage that no ad blitz could top.
Update: The statement that Hummer only sold 547 vehicles in China last year is an unfair measurement because GM does not sell Hummers in China. All of those vehicles were either grey market or brought over by third party importers.