The Hummer Moves to China (and Chinese Cars are Coming)

(MoneyWatch)  The news that General Motors has a deal to sell its troubled Hummer brand to China's Sichuan Tengzhong Heavy Industry Machinery Company for an undisclosed price (probably somewhat less than $500 million) momentarily lifted the gloom in Detroit. It showed that there could be new, international life to brands the Big Three have virtually written off.

Hummer is hardly a profit center. GM sold slightly more than 5,000 of them globally in the first quarter, down a precipitous 62 percent from the first quarter of 2008.

Though the cash infusion will hardly make a dent in GM's $172 billion debt, it confirms a trend. Ford startled many observers by unceremoniously dumping the historic Jaguar brand (the E-Type! The XK-120! the Mark II!). It went in a package with equally evocative Land Rover to Indian industrial giant Tata (makers of a much more humble car, the $2,100 Nano). The currently neglected Lincoln and Mercury brands could be the next to go.

The Hummer deal could spur some creative thinking among the Big Three. Chrysler, soon to emerge from bankruptcy with new partner Fiat, might find its monster Durango SUV surplus to requirements, and the Chinese have a demonstrated fondness for big four-wheel-drives. The Cadillac Escalade (which is already sold in China) is an object of desire for many consumers there, so maybe that whole operation can be spun off, too. Even defunct SUVs like the Ford Excursion might see new life on Chinese roads.

There are currently no Chinese-made cars actually for sale in the U.S., but that will soon change. These days, the action is green. The Wheego Whip, a low-speed electric vehicle marketed by an Atlanta-based firm, is built on the body and chassis of a Chinese small car, the Noble. And the Coda EV, just unveiled yesterday, is a rebadged Chinese electric car with some 30 percent non-Chinese content.

Arnold Schwarzenegger, once the Hummer's biggest champion, reacted with considerable ambivalence to the news that it had been sold to a Chinese buyer, as this video demonstrates: Photo: Flickr/Captain Kodak