Chinese Purchase of Hummer Won't Affect Dealer Network

Now that the purchase of Hummer by Tengzhong appears to be all but in the bag, an executive for the Chinese heavy machinery company has said that it will maintain Hummer’s network of auto dealerships throughout the U.S.

The deal appeared to be an iffy proposition earlier this summer. However, the Chinese commerce ministry seems to have dialed down its skepticism, and the opposition on state-run media has evaporated, as well.

Tengzhong has said it expects to close the deal this fall, and analysts estimate the final price as somewhere between $150 million and $200 million. This is well below the $500 million GM wanted for the brand. Hummer sold 799 vehicles last month compared to 1,877 purchased during the same period in 2008 while gas prices were at record levels.

Barring any last-minute surprises, it would appear that Hummer will become Chinese-owned well before 2010.

Tengzhong Deal Won’t Affect Hummer Sales Network: Exec (Reuters)

GM Leaves Bankruptcy: Where Do the Brands Stand?

In the tumult of GM’s lightning-quick journey through bankruptcy, you may have lost track of what will happen to all the individual brands. Therefore, here’s a quick and handy guide to where each brand currently stands as the new taxpayer-owned GM emerges from Chapter 11.

Saturn: Purchased by the Penske Automotive Group, which owns NASCAR and IndyCar racing teams, as well as the U.S. distribution arm of the Smart car brand. Saturn’s five models will become the property of Penske but will still be built by GM on a contract basis. According to reports, GM will continue production of the three best-selling Saturn models for the next two years: the Aura, Vue and Outlook. It will discontinue the Sky and Astra. By 2011, GM will stop producing Saturn vehicles, and Penske will have to find a new manufacturer — possibly Renault Samsung Motors of Korea, according to Automotive News.

Saab: Swedish supercar maker Koenigsegg led a consortium to purchase the ailing brand from GM. The deal is contingent on $600 million of financing from the European Investment Bank to be guaranteed by Sweden. The deal is supposed to close sometime in the third quarter of this year, but analysts have questioned whether Saab is big enough to survive regardless. It sold only 93,000 cars last year and has been unprofitable for a long time.

Chinese Government May Ax Hummer Deal

China’s state-run radio has reported that the country is likely to reject a Chinese company’s bid to buy Hummer from GM because the brand conflicts with the country’s environmental goals.

Tengzhong Heavy Industrial Machinery lacks the expertise to run Hummer or introduce more fuel-efficient versions of the five-ton vehicles, according to China’s National Development and Reform Commission, which is the official government entity likely to quash the deal.

None of this has been confirmed by the government yet, but in an earlier post we talked about some of the obstacles Tengzhong would face in introducing Hummer to China. Tengzhong, for its part, says the deal is on.

A PR firm representing Tengzhong points out that while the state-run radio does not like the deal, that doesn’t mean the NDRC will actually kill it.

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.

In China, a Roaring Debate Over Hummer (NPR)

Will Consumers Miss the Old GM? Not Likely

There’s been a lot of talk about “good GM” and “bad GM” and what the closure of Pontiac and sale of Saturn, Saab and Hummer will mean to the new company. We thought we’d recap the impact GM’s restructuring will have on car shoppers.

General Motors remains the largest producer and seller of cars and trucks in the United States, already selling 777,785 vehicles this year, through May.

Nearly one of every five cars purchased in the U.S. comes from GM through the Chevrolet, Buick, GMC, Cadillac, Saab, Saturn, Hummer and Pontiac brands.

Pontiac will be shut down completely by the end of 2010, with Saab, Saturn and Hummer expected to be sold off.

Those four brands combined have 18 nameplates on sale. Together, those models comprised 2.4% of the new-car market in April. That’s a drop of about 1% from the same time last year (3.6%).

Chinese Company Preparing to Buy Hummer

Chinese manufacturer Sichuan Tengzhong Heavy Industrial Machinery Company has confirmed that it is the party in talks with GM to buy the Hummer brand. GM and Tengzhong have said the deal will keep in business the Hummer plant in Louisiana that makes the H3 and H3T, as well as an American dealer network and even the Hummer headquarters and operations.

We foresee a Chinese sale looming over the brand's image stateside, however, with a negative connotation among American buyers. There is no connection between GM's Hummer brand and the military Humvee vehicles built by AM General in Indiana.

It has been widely held that any company buying Hummer would not concentrate solely on the struggling American SUV market and instead focus on expanding into the Middle East, Asia and Russia. Currently, GM doesn't sell the Hummer brand in China, though it does sell Cadillacs and Buicks there.

The new owners have stressed the importance of growing the brand in China, where a growing upper-middle class is fueling a boom in car sales. This year, China could overtake the U.S. as the largest new-car market in the world.

What do you think? Does the nationality of the buyer matter in regard to a Hummer sale? Would it weigh on your decision to buy one?

Hummer Sale Pending: H3 to Continue

This morning, GM announced it had a tentative agreement to sell its Hummer brand and keep nearly 3,000 U.S. jobs in place, including at the dealership level. The buyer and the sale price weren’t disclosed, but GM did say it would work as a contract partner during the transition, as we've previously reported.

They also confirmed that the Hummer H3 and H3 SUT would continue production during this transitional period.

While Hummer has lost its luster in the U.S., GM stressed that the sale would expand the brand's global reach.

No New Saturns or Hummers after 2009

During GM’s announcement today that Pontiac would no longer exist after 2010, the company also said it would stop producing new Saturns after the 2009 model year and Hummers by the end of 2009.

Previously, GM had said it would build Saturn through 2011. The 2009 model year is currently being sold; GM generally switches over to the new model year during the summer. This means no new Saturns — and likely no new Hummers — will roll off assembly lines after this summer.

While the end of Pontiac may be seen as a sad day to automotive buffs, the same can’t be said for Saturn and Hummer. The two brands don’t have the cachet or fanbase of the 83-year-old Pontiac. However, this accelerated timeline caught the industry off guard.

If you’re thinking of buying a car or SUV from either brand, spokesmen from both companies say that they will be fully backed by GM’s warranty until either brand is sold. That same warranty is also backed by the U.S. government for any GM vehicle sold through May 31.

Both Saturn and Hummer are in the process of being sold to new owners. There are a number of scenarios for each brand, which we detail below.

We Give Up: Hummer Sponsoring Earth Day Coverage

Seriously GM, we try and give you guys a break from how poorly you’re portrayed on the nightly news, but you really shoot yourselves in the foot sometimes. Like today, when, while on Twitter, I came across the banner of Weather.com, one of the most popular websites around.

Today’s Earth Day sponsor appears to be Hummer.

I can’t believe Hummer is still spending money on advertising, let alone ad spends for Earth Day. I can only guess GM had this purchase in place long ago and that it rotates brands in that spot, but each time I went to the site, the Hummer logo displayed. There are also Cadillac ads and promotions for GM’s Total Assurance Confidence program running in other spots on the Weather.com site, which perhaps backs up the rotating ad-spend theory. Still, perception is reality, and it looks to the average Joe, or Twitterer, like GM is throwing money away here.

Recall Alert: 2009 Hummer H3T

GM has issued a recall for 1,738 Hummer H3T vehicles from the 2009 model year due to a faulty fuel tank front support strap, according to the National Highway Traffic Safety Administration.

The strap may fracture, leaving the fuel tank supported by only the rear support strap and stone shield. If stress caused either of those to fail, the fuel tank could fall off the vehicle while it’s in motion — a dangerous situation to be sure.

Dealerships will install a new-design fuel tank front support strap to affected vehicles free of charge. Owners can contact Hummer at 800-732-5493 or the NHTSA Vehicle Safety Hotline at 888-327-4236.