Tengzhong Wants Hummer Deal Over by 2010

Even if the final agreement between American manufacturer GM and Chinese company Tengzhong has been signed this week, the challenge is not over for neither of them. The painstaking buy of Hummer is hoped by the Chinese to last at most until early 2010.

"We have started communicating with the relevant regulatory bodies and will continue to support the application process in accordance with the requirements," a company spokeswoman was quoted as saying by Reuters.

The biggest problem, at least at first sight, facing the Chinese is their own regulatory boards. The same which this past six months have stalled the buy due to more or less founded reasons. If it manages to get the approval, and all chances are it will, Tengzhong will then have to face the real challenge: get Hummer back on track.

"All we know is that it owns the Hummer brand and the right to use the technologies, and that by itself does not sound like a good deal as some of the existing models like H2 are gas guzzlers that are going downhill," John Zeng, IHT Global Insights analyst told the source.

Tengzhong will purchase components and business services from GM for its newly acquired brand from the same GM, but will most likely have to invest by itself in the development of greener technologies for the tank on wheels. Not an easy, nor a cheap feat, some say...

"Tengzhong could get itself into a black hole by financing the development of a greener Hummer all by itself and it would be hard to get loans from Chinese banks," the analyst added.