George S. May Business Blog

GM sells Hummer to a Chinese non-carmaker

General Motors’ Hummer division has been sold to the western Chinese heavy machinery company: Sichuan Tengzhong Heavy Industrial Machinery Company Ltd. A bit of an interesting choice as, well they don’t make cars, but nonetheless, they are known for making construction and maintenance equipment.
Now, the NYT says that the memorandum of understanding between GM and Sichuan Tengzhong needs to be signed off on by Beijing officials, as the government has the discretion to veto any purchases of overseas firms by a Chinese company, particularly those transactions valued over $100 million. Hummer’s final price tag isn’t yet known but it is widely believed that to be under $500 million.

This is pretty surprising. If I were a betting man, I would have put my money the wealthy Indian carmaker, Tata, or another oversees carmaker. The fact that Sichuan Tengzhong doesn’t build cars is, in my opinion a bit odd. Regardless, with the massive “green” push in the United States, I think we all knew that GM would be dishing out Hummer first and it wouldn’t be to an American carmaker. Plus, in reading around I have found that Hummer’s are actually quite popular in Beijing and across China. This might end up being the most profitable place that Hummer could have gone.

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