EVEN IN the southwest Chinese home of Sichuan Tengzhong Heavy Industrial Machinery, residents are more familiar with the Hummer brand that it is looking to buy from bankrupt General Motors (GM) than with the machinery maker itself.
Little-known Tengzhong, which makes special-use vehicles and bridge and highway components, emerged last week as the surprise buyer of Hummer – delighting locals but raising eyebrows elsewhere.
“I think Hummer is a famous brand,” says Zhang Youyi, an engineer who wasn’t initially sure if Tengzhong was even located in Chengdu, the capital of Sichuan, a farming and industrial powerhouse. “It would be good news for Chengdu.”
Others aren’t so sure.
Besides flying in the face of Beijing’s push to more fuel-efficient cars, Tengzhong’s non-binding deal to buy a brand that has become a metaphor for macho, oil-thirsty waste also needs to deal with regulatory and financing issues.
Tengzhong’s management team is in the US hammering out a deal with GM, and could return to China this week, said a source close to the talks.
“The purchase of a US auto brand famous for being a gas-guzzler obviously does not make sense,” the China Daily wrote in an editorial this week.
It matters little that Hummers get more than 11.2l/100km (20mpg) and can cost up to a lifetime’s salary of work for the average urban Chinese worker.
Yet the Hummer was never about being average. “You don’t see many Hummers in Chengdu,” says Liu Shan, a schoolteacher. “They’re for rich people. Ordinary people like them for wedding pictures.”
At the entrance to Tengzhong’s factory, a series of grey buildings, a slogan in large red characters proclaims: “Let the world follow us.”
But workers arriving for the early Monday shift declined to talk to reporters, instead handing out slips of paper they’d been given with a Hong Kong phone number of the company’s public relations firm.
“Nobody can talk about this,” says a receptionist, referring all inquiries to the company website’s phone numbers.
The oversized Hummers are geared for off-road use, but have become symbols of machismo for the bulging wallets of celebrities including California governor Arnold Schwarzenegger and the newly rich in Russia.
The People’s Daily and Xinhua news agency have both criticised the bid as risky, impractical and rash, pointing to Tengzhong’s lack of experience in developing, marketing and manufacturing automobiles. Some have speculated that Tengzhong may be a front for other interests.
The automobile industry has been pegged by Sichuan’s provincial government as one of four strategic industrial growth engines for future growth.
Chongqing Changan Automobile Co said last week that it would build a new production facility next to Sichuan for small vehicles, using an initial investment of 2.5 billion yuan (€262 million). Changan is a Ford Motor China partner.
– Reuters