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Hummer Deal May Not Go Through; Brand In Jeopardy

  • Time, Monday, September 28, 2009 10:44 AM
Joseph R. Szczesny reports that General Motors' deal with the only bidder for its Hummer brand, China's Sichuan Tengzhong Heavy Industrial Machinery, has hit some glitches, and the brand may "wind up on the scrap heap" if it can't complete the deal relatively soon. "We'll close it," says one unnamed GM official.

China's National Development and Reform Commission has said that the purchase of Hummer is inconsistent with the country's effort to become greener. In addition, writes Szczesny, Sichuan Tengzhong has no experience building vehicles for the retail market.

But despite the fact that its dealer network is in disarray and used Hummers have lost value, the brand has retained a certain appeal, according to a new academic study published in the Journal of Consumer Research.

"Hummer drivers believe they are defending America's frontier lifestyle against anti-American critics," the study says. But Jim Hall, managing director of 2953 Analytics, says Hummer's future, if there is any, is probably in emerging markets such as Russia, China, Brazil and South Africa where conspicuous consumption isn't going out of style.

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