Hummer Buyer Targets Fuel-Efficient SUVs

“We need to be an investor who has certain amount of patience,” Chief Executive Officer Yang Yi said in an interview yesterday in Beijing. Profit will “depend on how much the vehicle can penetrate the U.S. market and on how wide the reach will be in the global market.” Hummer’s U.S. sales plunged 67 percent this year through April as higher gasoline prices and rising job concerns damp demand for SUVs that get about 14 miles to the gallon in city driving. GM is offloading the brand as part of plans to exit bankruptcy as a leaner and more profitable company. “Tengzhong’s chances of making a profit on Hummer are really low given the demand,” said Yu Bing, an analyst at Pingan Securities Co. “Nobody would put a good company on sale — Chinese buyers should be really careful.” Hummer plans to develop an H4 model that uses 9 liters of gasoline per 100 kilometers (26 miles to the gallon), Yang said. Still, regulators are unlikely to approve the plan as China’s government wants companies to buy overseas partsmakers instead of automakers, state-owned Shanghai Securities News reported on June 4, without saying where it got the information. (June 16, 2009)