Hummer_H1.jpgHummer, whose ugly gas-guzzling vehicles have come to symbolise all that is wrong with western car manufacturing, has finally found a home in China …perhaps.

With much fanfare, Sichuan Tengzhong Heavy Industrial Machinery announced last week that it was buying the General Motors unit.

However, doubts are now surfacing about whether the little-known Tengzhong will be able to pull off the deal. Locals in Tenzhong's home town of Chengdu are all in favour. But China wants smaller, more efficient cars and a more concentrated industry. Even if Tengzhong can raise the funds — the Financial Times has its doubts — Tengzhong buying Hummer will not help China achieve those aims.

If Tengzhong uses its own funds to finance the transaction, Beijing may opt to wave it through, the FT argues. But if the company raises funds from state-owned banks, which is its stated intention, then it will have to make a case for what, on the face of it, seems a foolhardy expansion aboard.

The fact that the only vehicles made by the little-known Tengzhong are cement mixers and tow trucks should have set the alarm bells ringing. But I guess if you are General Motors you cannot be too fussy about the potential buyers of Hummer, which has become a pariah brand.

Tengzhong says it will retain production of the Hummer in the US and has no plans to make them in China. So Chinese cyclists — and other motorists — can relax for now. But analysts say it will face daunting hurdles in reviving the vehicle, known in Chinese as “Han Ma,” or Bold Horse.

Soaring gas prices have battered sales of its military-derived vehicles, which roar along on oversize tires and can weigh up to five tons. Designed for off-road use, they look ugly and out of place in an urban setting.

EngagingChina witnessed the spectacle of a Hummer trying to find an extra-large parking space in a crowded Spanish city street. Needless to say, it could not. The driver left it double-parked and hoped it would not get towed away — which admittedly is unlikely if you weigh five tons.

This is just the latest in a steady stream of transactions in which upstart Chinese car companies buy up established western and Asian marques that have fallen on hard time. In 2004, SAIC purchased 48.9 percent equity of Korea's Ssangyong Motor.

In 2005, Nanjing Automotive bought collapsed British brand MG. And this March, China's largest independent carmaker Geely Automobile acquired Drivetrain Systems International, the world's second largest auto transmission supplier — see this story for background.

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