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China’s planning agency is likely to reject a Chinese company’s bid to acquire General Motors Corp.’s Hummer unit, in part because its gas-guzzling vehicles conflict with Beijing’s conservation goals, state radio reported.
The National Development and Reform Commission is also likely to say Sichuan Tengzhong Heavy Industrial Machinery Corp., a maker of construction machinery, lacks expertise to run Hummer, China National Radio said. It cited no source.
“Some people may have views and speculation but the Chinese government has a process that we respect,” said a company statement. “We do not yet have a definitive agreement, but are developing our proposals with GM and Hummer and we will continue to engage with the appropriate authorities in an appropriate manner.”
Auto industry analysts questioned how Tengzhong, which makes construction vehicles such as cement mixers and tow trucks, could succeed with Hummer, known as “Han Ma,” or Bold Horse, in China.
The Chinese government is trying to promote conservation and use of more fuel-efficient vehicles. It has cut sales taxes on cars with smaller engines and is encouraging automakers to develop electric and other alternative-energy vehicles. The Associated Press
The widely publicized deal by a Chinese company to buy the Hummer brand from General Motors has resulted in sharp differences with the Chinese government. The National Development and Reform Commission are now expected to reject the deal, the China National Radio reported.
The Ministry of Commerce last week described the deal as “rational and normal” in the current global financial crisis. It apparently had the approval of the State Administration of Foreign Exchange
, which controls the flow of foreign exchange for an overseas acquisition.
The NDRC, which has a final say in approving foreign acquisitions, has an altogether different view. It feels that the acquiring company, Sichuan Tengzhong Heavy Industrial Machinery Company, does not have the necessary expertise and resources to run the Hummer operations in the United States. Times of India
