Tengzhong Still Struggling to Buy Hummer

The Tengzhong - Hummer acquisition story has been going on for a while and, as you know, the Chinese company’s plan has not been received well by the Chinese authorities. Tengzhong could use an offshore company in its attempt to purchase GM’s Hummer if the Chinese government will not allow the transaction.

According to Reuters, Sichuan Tengzhong Heavy Industrial Machinery Co, has approached the Chinese regulatory authorities after it had signed a contract with GM in October last year. The partners were forced to extend the deadline of the deal to the end of February from the previous deadline of January 21.

All new companies that want to build production sites in China have to get vehicle production licenses from the government first. However, multiple official statements coming form China’s Ministry of Commerce state that no purchase application from Tengzhong has been received.

Tengzhong could buy Hummer through an offshore company if the vehicle production will be located outside Chinese borders. The General Motors - Tengzhong initial agreement, made in October 2009, stated that the Hummer H3 and H3T will continued to be produced at the U.S. Louisiana plant, while the U.S. Indiana facility (operated by AM General) will assemble the famous Hummer H2.

"It seems that Tengzhong is really interested in Hummer and is trying everything it can in order to get the deal down," Boni Sa, analyst with global industry consultancy CSM Worldwide told Reuters.