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Autos News

Tengzhong bid for Hummer rational: China Ministry of Commerce

A Hummer vehicle sits outside of a dealership in Scottsdale, Arizona June 2, 2009. REUTERS/Joshua Lott

BEIJING (Reuters) - Sichuan Tengzhong’s bid for General Motor Corp’s Hummer brand is normal behavior for a company seeking to take advantage of the global downturn to broaden its horizons, a Ministry of Commerce spokesman said on Monday.

Media reports have said little-known Sichuan Tengzhong Heavy Industrial Machinery could struggle to win official approval to buy the maker of the gas-guzzling sports utility vehicle from bankrupt GM GM.NGMGMQ.PK.

The Ministry of Commerce had not yet received any application related to the deal, spokesman Yao Jian said.

“Against the backdrop of the global financial crisis, it is rational and normal for Chinese companies to adopt an international outlook,” he told reporters at a monthly news conference.

Skeptics wonder whether Chengdu-based Tengzhong, which makes special-use vehicles and bridge and highway components, has the experience and resources to turn the Hummer business around.

Yao said the government expected Chinese companies in general to encounter frustrations as they ventured abroad because they lacked managerial skills and track records in mergers and acquisitions.

“We hope Chinese companies can learn more about international rules and make prudent investments,” Yao said.

Reporting by Langi Chiang and Alan Wheatley; editing by Chris Lewis

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