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Tengzhong CEO: making Hummers in China a possibility
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16:55, June 09, 2009

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What hurdles on Hummer's China road? - special

On June 8, Sichuan Tengzhong Heavy Industrial Machinery Co (Tengzhong), which has been the focus of media attention, unexpectedly launched a new website especially to clarify the Hummer takeover deal. The deal has been deemed as "hype" by the outside world.

A source at Tengzhong told Guangzhou Daily that the media has raised so many questions that the company has launched a website to give answers. Yang Yi, CEO of Tengzhong, said publicly for the first time that its expansion into the off-road vehicle market is a long-planned business strategy.

Hummer headquarters will remain in the US

On Tengzhong's newly launched website, there is a "FAQ about the deal" section.

As to whether the production capacity of Hummer will be transferred to China, the company said that with the global expansion of the Hummer brand, including the Chinese market, it would be reasonable to localize some extra production capacity in China at the appropriate time.

At present the company has plants in Guangyuan, Deyang, Shuangliu and Xinjin.

As reported, Tengzhong is negotiating a long-term contract with GM (General Motors) involving the final assembly of Hummers. It is expected that GM will continue to supply pre-assembled H2 and H3 models to the new Hummer firm. With the headquarters remaining in the US, Hummer will continue to be operated by the existing US management team.

Consider improving fuel efficiency of the "gas-guzzler"

Since Tengzhong has no car production experience, it is widely believed that the acquisition of Hummer will more likely be "a disaster." The company refuted such opinion. CEO Yang Yi said in a public letter released on June 8 that "the extension of our business scope to include off-road vehicle operations is a business strategy that we have long planned. The acquisition of Hummer offers us a rare opportunity to implement this strategy." The company's strategy includes entering the modern heavy industry, and promoting a high-end off-road vehicles business and the internationalization of production and sales of wind power equipment.

On the same day, Tengzhong also explained its acquisition of the so-called "gas-guzzler": Tengzhong plans to invest in the research and development (R&D) of the new Hummer products and Hummer's next generation models.

"Tengzhong is well aware of the new fuel efficiency requirements that have attracted the attention of the world, and believes that the Hummer team has been well prepared to meet these requirements." the company said.

By People's Daily Online

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