Hummer on the move

THE Hummer - one of the Middle East's favourite cars - is set to be taken over by a Chinese company from struggling US giant General Motors.

GM said it had reached a tentative deal to sell the brand to privately-held Sichuan Tengzhong Heavy Industrial Machinery Co, a day after filing for bankruptcy.

"The company's strategy is to bring the Hummer brand global and that should certainly include the Chinese market," said an official with the public relations agency of Tengzhong.

"It's not just a China-centred goal," the official said when asked if production of the sports utility vehicle will be transferred to China.

Tengzhong said in a joint statement with GM last week that it will retain Hummer's senior management and operational team, while the sale could save 3,000 jobs in the United States.

"The team intends to expand Hummer's dealer network worldwide, particularly into new and underserved markets such as China," it said.

Tengzhong, based in Chengdu city in southwestern Sichuan province, manufactures heavy machinery equipment for use in road and bridge construction and in the energy industry.

The company, mainly operating in China, currently has no overseas plant and exports only accounted for a small portion of its revenue, according to the official, who declined to provide more details.

As part of the proposed transaction, Hummer will continue to contract vehicle manufacturing and business services from GM during a transitional period. For example, GM's Shreveport, Louisiana, assembly plant would continue the contract to assemble the H3 and H3T through at least 2010, GM said.

"The transaction also includes plans by the investor to aggressively fund future Hummer product programmes," GM said in a statement.

Troy Clarke, president of GM North America, said Hummer "will thrive globally under its new ownership" and that the sale would "accelerate the reinvention of GM into a leaner, more focused and more cost-competitive automaker".

GM in June said it was considering what to do with the motoring beast, after Hummer sales plummeted 51 per cent last year, the deepest drop in the US auto industry.

The automaker said that its May sales of 191,875 were down 30 per cent from a year earlier, but rose 11 per cent from April to the highest level so far in 2009, helping boost its market share.

Sales throughout the region have risen annually and the brand is particularly popular in Bahrain which boasts a Hummer driving academy in the kingdom close to the Bahrain International Circuit.