A Chinese company buying the Hummer brand is a brilliant move. China does manufacturing well. But brand building? Not as fast. So acquiring a famous name in the car business is one way to launch a thousand new kinds of products to the world market, the domestic market - and the US. Repositioning Hummer with a new not so crazy fleet of cars that get better mileage will impress America as well as their domestic market. I'm sure every Chinese aspiring car owner would be happy to drive a Chinese brand of car, especially one that comes with the cache of durability forged in battle. Brands outlive products. Brands well crafted with authenticity and mythology have magic inherent inside of them. They also have the awareness. This was a good deal for the Chinese. Stay tuned, if they can change the portfolio and reposition the brand in a more dynamic way, its legacy would entice consumers to take a new look at the line up.
Below is an article about the deal in today's NY Times. Worth a read.
What Would Mao Drive? A Little Red ... Hummer
Even in a world mostly done being amazed by the ironies of globalization, last week managed to produce something fresh and previously unfathomable: General Motors, newly bankrupt and struggling to raise cash, agreed to sell its Hummer division to a company from China.
Yes, that Hummer, maker of the famously gas-guzzling behemoths whose menacing width and armor trace their provenance to the American military, is now set to become the property of Sichuan Tengzhong Heavy Industrial Machinery Company, in a land officially still called the People’s Republic of China.
It might seem incongruous, this plaything for the unabashed American road warrior shifting to a country where the bicycle once ruled and collectivism was an organizing principle. (What next? Harley-Davidson snapped up by the Vietnamese?) But that’s just until you contemplate the realities of modern China, and the nouveau riche in the growing suburbs, setting down lawn furniture inside gated complexes of villas, shopping at big-box stores and driving luxury cars. China seems intent on nurturing the very sorts of landscapes and consumer attitudes that produced the Hummer.
More than a merely economic event — the latest sign of China’s rise and American struggles — the deal is a cultural moment. It seems no accident that a Chinese company is taking possession of Hummer. China has come to embrace many of the attributes and modes of consumption that Americans may reflexively consider their own, complete with the sprawl and tangle of highways familiar to any resident of Los Angeles or Atlanta.
As China has cast off its ideological past and aggressively modernized its cities, it might reasonably have been expected to look to Europe or Japan for models of urban planning. Like Japan — home to one of the most sophisticated rail networks on earth — China is densely populated and dependent on imported oil. As is true in Europe, China’s major cities are surrounded by productive agricultural lands, making tightly clustered growth seem prudent.
Instead, in a choice familiar to Americans, China has put the automobile at the center of contemporary life. China has torn down older buildings in every major city to make way for more vehicles. It has erected an impressive network of highways crisscrossing the vast country. Air quality and energy efficiency have been outweighed by reverence for the car.
This has not happened randomly. In recent times, China’s leaders have unleashed enormous quantities of state finance to seed auto ventures in every province, spurring industries that have grown along with the ubiquity of the car. Petrochemicals, steel, glass-making and rubber have all expanded to feed auto-making. Tourism and retail shopping have increased as more Chinese take possession of steering wheels.
Along the way, many Chinese aspirations have come to focus on car ownership. In a country where so many people look back with bitterness on the regimented days of Maoism, and where public transportation still involves packing into belching buses and gruesomely crowded trains, the car has become a vessel for Chinese dreams.
“Why do you want a car?” I asked a young professional couple shopping at a car lot outside Beijing in 2002. The question elicited an irritated glare from the woman, as if I were condescending. “Same reason you want a car,” she said. “We want what you want.”
She did not mean merely the ability to go where she pleased, but also the geography the car enables — the villas with their backyards and modern conveniences; the superstores selling microwave-ready food; the new golf courses.
Asked about the atrocious smog blanketing Beijing and the traffic jams that made driving there a threat to mental health, she shrugged. Anyway, the car takes a growing slice of wealthy urbanites into the countryside for the pure pleasure of it — this, too, once unthinkable in a nation that remembers how city dwellers were forcibly dispatched to the hinterlands to slop pigs during the Cultural Revolution.
As driving has evolved from a mere way to get around to a mode of life, sales of passenger cars in China have grown by 20 percent to 30 percent per year since 2005. In January, for the first time ever, China’s monthly vehicle sales exceeded those in the United States.
Still, it would be wrong, if tempting, to view China as some sort of time capsule of 1950s American suburbia, that age before the vernacular came to include “climate change” and “non-renewable resource.” China is moving to impose fuel efficiency standards tougher than those in the United States while developing hybrid cars. Most car owners favor cheaper, smaller models.
But much as everywhere else, the auto has become a status symbol in China, and in ways that collide with the country’s history as a paragon of anti-imperialism: Cadillacs, that icon of American capitalist success, are now made on Chinese soil along with Audis and Buicks. In the new Chinese social divide, the middle class hews to economical vehicles with tiny engines, while the wealthy fuss with automatic climate control in their luxury sedans.
So it actually seems fitting that Hummer will be a Chinese brand. A vehicle that makes sense only as a pastime, with its miserable gas mileage, the Hummer has become an object increasingly shunned in the United States as a sign of wasteful decadence (not to mention something that most Americans can no longer afford). China, primed to consume and long since shorn of its collectively imposed thrift, will take a crack at extracting profit by selling the hulking beasts.
