It was a whirlwind of a news day surrounding Hummer today, starting with word the brand was sold, that it would be to an unnamed Chinese company, then the name of the company (Tengzhong), and finally a joint statement from GM and Tengzhong themselves.
Here is what we know about the near-term future of Hummer. First, if all goes to plan, the sale should close by the end of September. The senior management and operation team of Hummer will remain, and existing dealer agreements will continue to be honored by Tengzhong. Hummer headquarters will remain in the United States. Hummer is also expected to enter into a “long-term contract agreement with GM for assembly, component and materials.” In other words, even once the sale is complete, the Hummer H2 and H3 will continue to be built, at least for now. AM General builds the H2, but the H3 shares factory space with the Chevy Colorado and GMC Canyon pickup trucks.
Sichuan Tengzhong Heavy Industrial Machinery Co., Ltd. is best know in China for manufacturing road, construction and energy industry equipment, so Hummer will be the company’s first foray into the manufacture and sale of passenger vehicles. While Hummer is estimated to be worth around $500 million, it is not known how much Tengzhong is paying.
Back in 1999 when GM acquired the Hummer brand from AM General, it was impossible to imagine this day would come. With cheap gas and a raging appetite for large SUV’s, Hummer stood at the top of the mountain-literally. Incredible off-road prowess backed up the Tonka-truck styling that thrilled kids, your inner man-child and soccer moms alike. The fun couldn’t last forever. In the real world, the Hummer does not work exceptionally well, and the novelty quickly wore off.
With soaring fuel prices and a deep recession, sales of Hummer fell off the cliff. GM announced that Hummer was on the market in 2008. Months passed with little news; when GM did talk, all we were told was that there were several interested buyers. GM publicly stated that if no buyer could be found, they would simply shut Hummer down.
With Hummer, Tengzhong has an enormous task ahead of them. Clearly, their intent is to further the reach of Hummer into developing nations. The company also stated an intent to build more fuel-efficient vehicles for the US-news anyone would welcome, especially considering that Hummer is possibly one of the most polarizing brand of vehicles in the world.
Which brings us to a critical question: Is Hummer a damaged brand that cannot be redeemed? Would the Hummer faithful accept a more fuel efficient model, and can that model retain what makes a Hummer a Hummer? The truth is, in 2009 Hummer is a narrowly defined brand whose current offerings are a collection of a fad whose time has come and gone. Can a company like Tengzhong give Hummer the tools it needs to succeed in a radically different automotive landscape?
{ 1 trackback }
{ 0 comments… add one now }