Sichuan Tengzhong Heavy Industrial Machinery’s management team is in the United States hammering out a deal with GM to buy Hummer, and could return to China this week, a source close to the talks has said.
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But the proposed deal announced last week could run into regulatory and financial trouble in China, according to a Reuters report.
“The purchase of a US auto brand famous for being a gas-guzzler obviously does not make sense,” the China Daily wrote in an editorial on Monday.
The news agency said the Tengzhong deal had been met with scepticism and even ridicule from Chinese auto executives, industry analysts and the media.
The People’s Daily and Xinhua news agency have both blasted the bid as risky, impractical and rash, pointing to Tengzhong’s lack of experience in developing, marketing and manufacturing automobiles. Some have speculated Tengzhong may be a front for other interests.
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By GlobalDataThe Shanghai Securities News reported last week that funding from private companies in nearby Shanxi Province might be the driving force behind the bid, Reuters added.
The Sichuan provincial government backs the deal, but that support does not include explicit financial support, the source close to the deal told the news agency.
