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Who is Sichuan Tengzhong?

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四川腾中重工(in Chinese, Sichuan Tengzhong Heavy Machinery) The little known Chinese Co. who bought Hummer brand from GM yesterday (News: Bloomberg; Reuters; Tengzhong web site). Quote Reuters:

Tengzhong, formed in 2005 through several mergers, makes special-use vehicles such as dump trucks and fuel tankers, as well as construction machinery, energy equipment, and structural components for highways and bridges.

It has 4,800 employees, according to its website, about the same as Changfeng. The site does not disclose any financial data.

Special Vehical made by Sichuan Tengzhong
(Special Vehical made by Sichuan Tengzhong, full size pic here. From the pic it appears Tengzhong is OEM maker for SinoTruk 中国重汽)

Why Tengzhong bought Hummer?

Bloomberg said it well: “This is a good acquisition for Sichuan Tengzhong and a good sale for GM, too,” said Wong. “They can do the manufacturing and marketing in the U.S., but in addition to that they can produce Hummer elsewhere for markets such as China, India and the Middle East.”

And it seems to me this Hummer thing is red hot in China, as shown by my friend KenWong in Guangzhou (Southern China).

Why Chinese like Hummer?
After all, it’s a modified version of Humvee, the armed vehicle of US army. Well, here is my explanation: for many Chinese newly riches, Hummer is a very good thing to show off their status. A few years ago I heard Chrysler 300 was popular among newly riches in China for the same reason.

Will Chinese newly riches continue to buy Hummer?
Hmm, this is a very interesting point. The ownership of Chinese could be a deal killer. Quote Yahoo Finance (AP):

Shanghai entrepreneur Jun Jinru, who revels in his status as one of China’s tiny handful of Hummer owners, had mixed feelings when he learned the producer of his beloved H3 model had been sold to a Chinese company.

“I think all Hummer-owners in China will think their cars are downgraded,” said Jun, who bought the H3 through a specialty importer last year for 900,000 yuan ($130,000).

“From the point of view of supporting Chinese products, we are very glad a Chinese company is capable of buying the brand,” he said. “From a selfish point of view, I don’t really want this to happen.”

1 reply on “Who is Sichuan Tengzhong?”

In my opinion, it is one of the efforts that China helping US to get out of financial crisis. To help GM get out of trouble is crucial to US.

And it is good to China too. It indicates a trend that Chinese exports are upgrading from cloths/toys to vehicles.

This trend is arguably good to global. Because it means China will continue to consume comidities and US will continue to consume goods and everything would be somewhat back to a few years ago, hopefully. And global economy would get a softlanding, hopefully.

I am a little farfetched, but you got the idea.

Jim Rogers may be right about the super cycle…

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