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October 14, 2009

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Home » Business » Auto

GM to help Tengzhong win nod

General Motors Corp will extend every support to help China's Sichuan Tengzhong to win government approval to buy its Hummer sport-utility vehicle brand, Chief Executive Officer Fritz Henderson said in Shanghai yesterday.
"We have been in talks with Tengzhong. As the buyers, they think they are confident and hopeful," Henderson said. "We will support them whatever they need in order to get approval for this (purchase)."

Detroit-based GM signed an agreement with Tengzhong, a little known machinery maker, last Friday to sell its Hummer brand as the US car maker is disposing brands and cutting costs after emerging from bankruptcy protection in the United States.

The deal, which is reportedly valued at US$150 million, is the first time a Chinese car maker is buying distressed US auto assets. But the deal is still pending government approval.

Earlier media reports said the Chinese government is not in favor of the deal because buying the gas-guzzling Hummer is not in accordance with the nation's energy efficiency strategy and also the purchase is perceived to contribute little to the development of the domestic auto industry.

"China is certainly important for us for its business results, share performance and profitability," said Henderson, who was on his first visit to China.
"Looking forward, it would take a more significant role for GM's global business and become an important product development and manufacturing base."

He said China will surpass the US as the world's largest auto market this year. "We hope to achieve a double-digit growth in China for the whole year," he added.

Benefiting from the government stimulus measures, GM and its Chinese joint ventures expanded sales by 55.6 percent to 1.3 million vehicles for the first nine months, which surpassed its 2008 sales.

In contrast, GM's US sales fell 45 percent in September. GM earlier said it hopes to double its sales in China to 2 million units by 2015.
GM plans to launch 10 models in China under the Buick and Chevrolet brands by next year, including a new Chevrolet Sail to be marketed early next year.

Henderson said yesterday GM may finalize a deal this week to sell a majority stake in its European car making arm Opel to a Canadian-Russian consortium.

GM decided last month to sell 55 percent of Opel to a consortium, including Canada's Magna and Russia's Sberbank.
"It's quite possible to see documents signed this week," Henderson said.


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