Chinese government thinks Hummer is a POS

Discussion in 'Wall St. News' started by turkeyneck, Jun 4, 2009.

  1. Sichuan Tengzhong Heavy Industrial Machinery Co.’s bid for Hummer runs counter to China’s attempts to develop a globally competitive auto industry by focusing on fuel-efficient vehicles, according to analysts. The government also wants to pare the nation’s more than 100 automakers to ease competition.

    “A new entrant in the car industry is not something they’re looking to see,” said Chip Chaikin, who helps overseas $800 million as managing director of Shanghai-based Blue Point Capital Partners Asia. “It’s pretty unlikely” the deal will go through.

    Tengzhong also needs to persuade at least two Chinese government agencies that it can turn Hummer into a profitable company to get clearance for the deal, said Zhang Xin, an analyst with Guotai Junan Securities in Beijing. Hummer’s U.S. sales are plunging as higher gasoline prices and rising job concerns hammer demand for its gas-guzzling SUVs.