Page last updated at 21:14 GMT, Wednesday, 24 February 2010

GM to end Hummer after Chinese sale collapses

Hummer
GM bought the Hummer brand in 1999 and sold it last year

General Motors (GM) is to wind down operations of its Hummer vehicles - after failing to complete a planned takeover by a Chinese firm.

GM did not comment on why the sale to China-based Tengzhong had collapsed. Reports have said Beijing had refused to approve the purchase.

GM agreed to sell the brand last year, as it offloaded famous names it owned and went into bankruptcy protection.

It said it was "disappointed" the deal could not be completed.

"GM will now work closely with Hummer employees, dealers and suppliers to wind down the business in an orderly and responsible manner," said John Smith, vice-president of corporate planning and alliances.

The firm added it would continue to honour Hummer warranties, and provide service support and spare parts to current owners around the world.

Waning popularity

GM emerged from Chapter 11 in July last year, announcing that it would discontinue the Pontiac and Saturn, and saying it would sell Swedish brand Saab and its European operations, Opel.

It eventually decided to keep Opel - which includes UK brand Vauxhall - and sell Saab to Dutch carmaker Spyker.

Hummers were originally built as military off-road vehicles by a company called AM General.

The brand took off as US motorists flocked to the sport utility vehicles favoured by celebrities including Arnold Schwarzenegger.

GM bought the Hummer brand in 1999, but sales have suffered recently as the gas-guzzling performance and military image have become less popular.

Hummers weigh up to five tonnes and have fuel consumption of about 15 miles per gallon.

Tengzhong - which is based in China's Sichuan province - specialises in making equipment for the road, construction and energy industries.

Under the terms of the original deal, Tengzhong was going to take an 80% stake in Hummer, with the remaining 20% going to Hong Kong entrepreneur Suolong Duoji.

The company had also said it would be focusing on improving efficiency in Hummer models, including the introduction of diesel engines.



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