Newsweek is reporting Monday that Chinese officials are merely using their environmental concerns as a public excuse to not support Tengzhong’s bid for the HUMMER brand, while their real fear is international embarrassment if the brand fails.
To be clear, there has been no official statement from either of the main Chinese regulatory bodies, the National Development and Reform Commission (NDRC) or the Ministry of Commerce, other than this:
“The commerce ministry and the National Development and Reform Commission both hold a supportive attitude toward Chinese companies venturing abroad… This is not a decision for the government. It’s an active strategy for companies in the course of globalization. That’s a long-term trend.”
But could China really be worried about embarrassment when it comes to automakers? Even though HUMMER has its critics, it has equally as many enthusiasts. It’s also had more success in the United States than any Chinese auto manufacturer in history, including during the economic downturn and high gas prices in 2008.
Right now China doesn’t have any auto manufacturers that come close to the international appeal and recognition that the HUMMER brand has, even though it has over 100 auto manufacturers trying to do just that. Does it really make sense that buying a brand that already has that would be a setback for the country? We don’t think so.
One other point to remember in this whole deal is that GM isn’t shedding HUMMER because it wasn’t successful or profitable – it was both! GM’s overall operating structure is geared towards higher volume brands, and its massive debt required liquidation of some valuable assets – HUMMER being one of them.
At the Detroit Auto Show there’s an upstairs and a downstairs. The upstairs is where you have the major brands (including HUMMER) and the downstairs where the lesser known companies are (the Chinese auto brands). The photos after the jump show some of the vehicles the Chinese were showcasing downstairs, so again, when it’s suggested that HUMMER would be unappealing and potentially embarrassing asset for China, we say, “Really???”