PrintJune 2, 2009
Chinese firm reportedly buys Hummer brand
A Chinese company whose name most Americans can't pronounce* has purchased Hummer. I was wondering which GM and Chrysler brands would be gobbled up by rising Chinese auto producers. Turns out the first is a low volume product, which may make sense, especially considering the buyer is expanding from construction and heavy machinery into heavy trucks, and now heavy SUVs.
The New York Times reports that Sichuan Tengzhong, located in Chengdu, far from the coastal cities, has purchased the brand, and at least for the present, will continue to manufacture the vehicles in Shreveport.
Keith Bradsher and Nick Bunkley of the Times hint that there may be a market in China, reporting that a few Hummers individually imported by Chinese people, draw crowds. Time will tell. But my guess is that Sichuan Tengzhong is very interested in all the engineering documentation and expertise it is getting. Years ago, Shanghai Automotive Industry Corporation bought Rover, including the engineering underlying its then-current model (done by BMW, which briefly owned Rover), and has been steadily upgrading its carmaker prowess, while selling its modified version in China and overseas. You can see their website here for pictures.
The Chinese producers are going to be buying more nameplates, as they grab a bigger piece of the world auto business. Because their costs are so low and their home market so huge, it is a given that they will succeed. They are following the Japanese and South Korean industries down a now well-understood path.
Upgrading their manufacturing and engineering capabilities is only part of the story. They need to learn about car retailing in the US, servicing, and other marketing and distribution-related topics. The turmoil in the American industry, including substantial excess dealer capacity, will make entry into the American market easier for overseas producers seeking a piece of the American market. Assuming, that is, protectionism doesn't rear its ugly head.
*Chinese is a tonal language. If you ignore the tones, the name is phonetically close to sih chwan dung jung.
Upgrading their manufacturing and engineering capabilities is only part of the story. They need to learn about car retailing in the US, servicing, and other marketing and distribution-related topics. The turmoil in the American industry, including substantial excess dealer capacity, will make entry into the American market easier for overseas producers seeking a piece of the American market. Assuming, that is, protectionism doesn't rear its ugly head.
*Chinese is a tonal language. If you ignore the tones, the name is phonetically close to sih chwan dung jung.
