DETROIT (Feb. 25, 2010) — General Motors Co. will wind down its Hummer brand after a proposed sale to China's Sichuan Tengzhong Heavy Industrial Machines Co. Ltd. fell through.
Tengzhong “was unable to complete the acquisition,” GM said. The Chinese company failed to win government approval of the sale, a source familiar with the negotiations said.
GM said it will honor warranties, provide spare parts and will support service for Hummers worldwide. GM has 153 U.S. Hummer dealers.
The failed deal likely seals the fate of the last of GM´s four unwanted U.S. brands. GM is winding down Saturn after its sale fell through in September. Pontiac is also being phased out. GM completed the sale of Saab this week to Dutch niche car maker Spyker Cars N.V.
GM is open to receiving other bids for Hummer as it winds down the brand, the source said. GM put Hummer up for sale in 2008, before the global financial crisis that dragged the auto maker into bankruptcy.
GM said last June it expected to sell Hummer to the Chinese heavy machinery maker, which has no experience in the auto industry. Hummer's 67-percent sales decline last year was the steepest of any volume brand in the U.S.
GM bought the brand in December 1999 from AM General, which has also continued to make versions for the armed forces.
Hummer entered the civilian market in 1992. Non-government Hummer sales averaged 800 to 1,000 units annually when GM bought the brand.
Hummer´s U.S. sales peaked at 71,524 in 2006, before demand was choked by gasoline prices that soared above $4 per gallon in 2008. Sales last year dwindled to 9,046.
This report appeared in Automotive News, a Detroit-based sister publication of Tire Business.