GM ending Hummer brand after failed deal

Hummer H2

General Motors has announced that it will begin to wind down Hummer operations after the take over deal with a Chinese firm failed.  Sources have reported that Beijing had refused to approve the take over, though as of yet no official statement has been given.  One reason proposed by Klaus Paur, North Asia director of market research company TNS, is that China’s government is set on producing energy-efficient vehicles, and that the Hummer brand is fundamentally outside of this goal.

The deal was originally conceived last year, when GM went into bankruptcy protection and began divesting many of the famous brands it had purchased over the last few decades.  The Sichuan province-based Tengzhong firm, which specializes in road and construction equipment and energy industries, sought to by the Hummer brand from GM.  While Hummer’s reputation consists of military-styled, gas guzzling SUVs, Tengzhong’s mission was to improve fuel efficiency in the Hummer models.  This mission included the introduction of a line of diesel engine Hummers.

In the wake of the failed purchase, GM has stated that they will still honor Hummer warranties.  Likewise, GM will continue to provide vehicle service and spare part support for all current Hummer owners. While no word has been given as to when GM plans to halt production, chances are that like Saturn and Pontiac, Hummer will be phased out by the end of the year.

Saab purchased by Spyker

saab logo

Saab Motor Co.

The wake of General Motors‘ June 2009 bankruptcy left several brands stranded: the military-turned-civilian Hummer was sold to a Chinese machinery company, the affordable line of Saturn cars is set to be totally phased out and off lots by this October, and iconic American brand Pontiac will vanish by the end of 2010. Not all of GM’s brands are doomed to the scrape heap, though.  On January 26th, Dutch supercar maker Spyker announced that it had purchased the often unnoticeable Saab for $74 million dollars after months of negotiation.  Its plan for Saab: make it competitive with the well established sedans of companies like BMW and Audi, with the hope that this will make the brand profitable 2012.  Spyker’s plan is an optimistic one, given Saab’s underwhelming financial performance during its tenure as a GM brand.

The purchase offers Spyker a way to enter the lucrative luxury sedan market.  Currently, Spyker produces less than 50 cars a year, each with a price tag well over $200,000.  In stark contrast, they expect to sell between 100,000 and 125,000 Saabs annually.  At the very least, with the increase in workers Spyker will need in order to maintain production capacity for Saab, the company can hope to increase production of its supercars to around 100 a year.