Would Confucius drive a Hummer?
The news that an obscure Chinese company has reached a tentative deal to buy the bankrupt General Motors’ Hummer unit has got people here to think about the broader meaning of Chinese ownership of the mother of all heavy consumers. gasoline.
The news put Sichuan Tengzhong Heavy Industrial Machinery Co. on the radar screen of auto enthusiasts around the world. And it underscores China’s growing economic might at a time when America’s industrial prowess is faltering.
China is already the US government’s largest creditor and the largest foreign supplier of manufactured goods to the United States. Today, a Chinese company is the first to salvage a piece of a fallen American titan – a significant pride for many in China.
The new owners plan to push sales of the gargantuan vehicle here, where it is already a status symbol for China’s nouveau riche.
The brand “is synonymous with adventure, freedom and euphoria, and we plan to continue this legacy,” said Yang Yi, general manager of Tengzhong.
But for others, the Hummer bodes ill, the epitome of American excess before soaring gas prices and housing collapse humbled the nation’s psyche. As with the H1N1 flu, they hope it doesn’t get caught.
“For me, the car reminds me of the generation born in the 1980s who only believe in hedonism and show us the bad consequences of consumerism,” said Zhou Xiao Zheng, sociologist at Renmin University in Beijing. . “I sincerely wish that we adopted only the good things from the United States and not the bad things.”
It’s too late for that.
Huge American-style furniture stores, luxury shopping malls, and gated residential complexes line Beijing’s ring roads. And the Chinese dream, like that of Americans, increasingly means owning a car.
For the most part, that involves purchasing a stripped-down sedan small enough to squeeze into tight parking spaces. But for those who feel the need to advertise their presence on the road or drive through rural China (think wealthy coal mine owners), the Hummer is what you need.
Known here as “Han Ma”, which means “fierce horse”, it is one of the ultimate expressions of wealth and ostentation. Although Hummers have never been officially sold in China by GM, they are made available to the Chinese market by independent third-party importers.
Standing on the sunburnt lot of a suburban Beijing car dealership amid an assortment of Audi, Toyota, Honda and Chinese brands on Wednesday, salesman Zhao Hai Tao did not hesitated when asked what he would choose if he had the money. He knew: a shiny black Hummer with a leather interior and tinted rear windows.
“It’s so powerful,” said the 25-year-old sunburnt. “As long as you’re a man, you’ll want one.”
But after a few moments, Zhao’s whimsical thoughts gave way to reality. “I know it’s inconvenient and not fuel efficient,” he said, looking at the SUV inflated for $ 200,000. “It’s a dream car that most people can’t afford.
Gourmet in essence
It’s unclear exactly how the Hummer will fit into China’s major energy plans. China is heavily dependent on imported oil, a major concern for policymakers. The government has made energy efficiency one of its goals. It increased taxes on large vehicles last year, including a whopping 40% over the price of a Hummer.
Chinese regulators on Sunday raised the price of gasoline in response to rising crude oil costs.
Meanwhile, Chinese companies such as BYD Co. have gained worldwide attention for their efforts to produce a credible battery-powered car.
“Now is not the right time for China,” to introduce the Hummer, said Wang Cheng, a researcher at the Energy and Transportation Innovation Center, a Beijing-based nonprofit promoting fuel-efficient cars. fuel.
Even California Governor Arnold Schwarzenegger, a longtime Hummer enthusiast, shed a few tears at the news that the Chinese were buying the brand. He converted one of his Hummers to vegetable oil to escape the wrath of environmentalists.
“I’ve always been a huge Hummer fan, but. . . we know we have to get rid of big polluting vehicles and cars that run at very low mileage, ”he said. “You know the Hummer gets maybe 14 miles per gallon, and that’s not enough.”
Tengzhong, a little-known manufacturer of road and construction equipment based in Chengdu in southwest China’s Sichuan Province, has no experience in the passenger vehicle market. The company was founded in 1965 and lost its state designation by going private in 2005.
The Hummer deal has left the Chinese auto industry in turmoil and observers have been puzzled. Tengzhong said he would continue to make Hummer models at the same factories currently used by GM, which would mean forfeiting the benefits of a cheaper Chinese workforce.
“I just can’t figure it out,” said Jiu Xinguang, a Beijing-based auto analyst. “Why would this company want to buy Hummer? Most Chinese automakers have nothing to gain from a deal like this because they lack multinational experience.
Talk show hosts on Beijing Communication Radio, a station favored by taxi drivers, were equally puzzled on Wednesday afternoon.
“It’s not that famous. . . the company will become more and more famous now, ”the host laughed with his guests. “Who thought, when we saw all these pictures of [Humvees] in Iraq, that they would advertise Tengzhong?
The Hummer was originally built on the same platform as the Army Humvee, produced by AM General. GM purchased the Hummer brand from South Bend, Indiana in 1998.
The Detroit automaker hired AM General to continue building trucks for it, and although the consumer version of the Humvee, known as the H1, is no longer manufactured, the H2 model is still being built in Mishawaka, in Ind. Hummer’s other model, the H3, is built by GM in Louisiana.
The brand enjoyed enormous success for GM in the early years of this decade, peaking in 2006 with 71,524 sales in the United States, but has since collapsed. Last year, only 27,485 were sold nationwide, and in the first five months of 2009, U.S. consumers only purchased 5,113.
However, the massive SUVs were accepted outside of the United States. For international markets, GM manufactures the H3 at one of its plants in South Africa and has hired a Russian plant to build the H2 there from last year.
More than anything, Tengzhong buys the brand and the intellectual property, but he also obtains the rights to the current Hummer dealer network and the Hummer management team.
Because Tengzhong does not buy the factories where the Hummer is built, GM said the sale would include “a long-term assembly contract and a key components and materials supply agreement with GM.”
The Humvee produced for military purposes was not acquired by GM and is still manufactured in Mishawaka.
John Zeng, senior market analyst for IHS Global Insight, said Tengzhong shouldn’t expect growth in the United States but would enter a Chinese SUV market that grew 25% last year . However, this growth mainly represented smaller models such as the Honda CR-V.
“SUVs are a strong segment,” Zeng said. “Hummer has a good brand image. If they can launch the right product, they could be successful.
The thought of having to share space with the four-door behemoths on Beijing’s notoriously crowded streets worries Wang Tao, a taxi driver.
“I wouldn’t want to be around them on the road,” he said. “They’re huge and aren’t afraid of getting scratched.”
Times writer Ken Bensinger in Los Angeles and Nicole Liu and Joshua Frank of the Times Beijing office contributed to this report.