Who Bought Hummer Car Company?
The Hummer car company has become a well-known name in the automotive industry over the last decades, but many people still don’t know who bought it in 2009. In this article, we will look into the history and changes of the company to understand who bought it and why.
The Hummer car company began in 1992 when General Motors Corporation purchased the brand from AM General, which originally built and sold the utilitarian Humvee through the U.S. military. General Motors Corporation wanted to bring the large and burly military aesthetics to a civilian audience. Over the years, the brand gained a reputation for its tough exterior and fuel-inefficient vehicles, making it a favorite of Hollywood stars and athletes alike.
In 2008, due to the global financial crisis, General Motors Corporation suggested to suspend their Hummer brand for restructuring, and later that year announced the decision to discontinue the Hummer brand and sell its assets. After a long search for a potential buyer, General Motors Corporation finally sold the assets of the Hummer car company to Sichuan Tengzhong Heavy Industrial Machinery Co, Ltd. on 9 June 2009.
The Chinese company was also a subsidiary of automotive distributor China Youngman Automobile Group Co. Ltd at the time, which was majority owned by the Chinese government. Tengzhong believed in the Hummer car company’s potential, and planned to revamp its image while keeping the original military styling.
Unfortunately, their plan didn’t come to fruition. After the proposed sale was announced, some Chinese environmental activists, auto industry observers, and local residents who were concerned about the potential environmental harm of the Hummer’s increased production raised their voices.
Due to the negative public opinion and the turbulence in the automotive market, Sichuan Tengzhong Heavy Industrial Machinery Co, Ltd. was forced to reverse their decision and aborted the sale in February 2010. The Hummer car company was closed down in the same year, and its assets and trademarks were purchased by the General Motors Corporation in 2011.
Environmental Concerns
The environmental concerns around the Hummer car company sparked debate by Chinese activists and the public, leading to Sichuan Tengzhong Heavy Industrial Machinery Co, Ltd. reversing the decision. The conversation surrounding the effects of the Hummer’s military looks and fuel-inefficiency was indicative of the changing times.
The uproar against the Hummer car company was indicative of a shift in current societal values. Consumers had grown to reject cars that were excessive in size, over-emission, and fuel inefficiency that the Hummer car company was known for. The company had failed to adapt to the growing trend and preference for more efficient and eco-friendly vehicles.
The discussion also revealed deep-seated Chinese attitudes towards the environment and public opinion. Though the Chinese economy was booming, Chinese citizens’ attention to the environment was still low. Chinese environmental activists and the public had voiced out the environmental hazard that the vehicle would bring to the local environment if there was an increase in production.
Consequences
Although the sale of Hummer car company was reversed, the consequences of the failed acquisition have not yet been fully uncovered. The scandal caused a record-breaking $13.9 million in fines to be handed out to Sichuan Tengzhong Heavy Industrial Machinery Co, Ltd. for violating regulations on the disclosure of important financial information. This case serves as a reminder for the companies to pay close attention to the regulations on disclosure and complete the necessary paperwork for conducting potential acquisitions.
On the other hand, the failed acquisition of Hummer car company also ignited social attention and discussion about environmental issues in society. The outcry for sustainable and efficient mobility solutions in China and the push for stricter emissions laws were also inspired by the incident. It also encouraged the efforts of Chinese activists to balance the economic growth and environmental protection.
Industry Takeaways
The failed acquisition of the Hummer car company serves as an important lesson which can be applied to the automotive industry.
Firstly, the event highlighted the importance of the public’s opinion and its effect on the buying decisions of consumers. Now, automakers spend more time and resources to research their target audiences, as well as to develop more environmentally friendly cars with less emission and more fuel efficiency.
Additionally, it also revealed the importance of staying ahead of a changing market. The company had failed to upgrade its military styling and produce more efficient and eco-friendly vehicles, which contributed to its failed acquisition. Automakers should pay close attention to the market trends and plan accordingly to remain competitive.
With the gaining popularity and the global focus on the sustainable production of goods, many companies are turning to green technology in manufacturing conditions. The trend of electric and hybrid vehicles is also on the rise, as businesses opt for low emission cars with increased fuel efficiency.
Future Market Outlook
Global experts and auto analysts also believe that the industry is at the beginning of an epochal transformation, as the market is now being driven by the demand for electric vehicles. It is predicted that the global production of electric vehicles will surpass the 20 million mark over the next decade.
Meanwhile, the industry has also seen the emerging of autonomous vehicles which are becoming increasingly popular due to their convenience, safety benefits, and cost savings. It is estimated that the market of autonomous vehicles will reach $173.15 billion in value by 2025.
Moreover, companies are also shifting their focus on the ‘connected’ car technology, allowing vehicles to connect to the internet and provide communication services. According to a study, the connected car market size is estimated to grow to a staggering $156.3 billion by 2026, with a CAGR of more than 14%.
Technology Advancement of Cars
The past decade has witnessed a dramatic shift in the way we interact with vehicles, as technology advancement and innovations contribute to the upsurge of autonomous cars and connected vehicles.
Today, cars are equipped with advanced Artificial Intelligence (AI) technology, which helps with navigation and driver assistance. Autonomous cars are now driving and operating on their own with high-precision sensors that identify the data being collected from the surroundings.
Similarly, cars can now also be wirelessly connected to the internet with Wi-Fi or cellular service. This allows them to access streaming services, and provides a new level of convenience and entertainment to the passengers.
Data collected by the sensors and connected vehicles are transmitted in real time to the company, allowing them to conduct predictive analytics and send push notifications with updated information to the drivers.
Mobility-as-a-Service
With the demand for sustainable mobility solutions, the industry has also seen the emergence of Mobility-as-a-Service (MaaS) platforms, which provide a range of different types of transportation for people to move from one place to another.
This includes the Uber’s UberX, which connects riders with certified driver-partners to get them where they need to go. Similarly, bike-sharing services have also been in the rise, including companies like Bird and Lime, which deliver convenience and enable users to explore their cities in a safe and eco-friendly way.
In addition, companies are investing heavily in electric scooter-sharing services to provide riders with an alternative to traditional transportation. These electric scooter companies offer an energy-efficient solution, making it more time and cost-efficient.
Conclusion
The failed acquisition of Hummer car company in 2009 is an important event for the automotive industry that has brought about important takeaways for companies looking to remain competitive with the ever-evolving market.
The event has also highlighted the importance of staying up-to-date with technological developments, by understanding and accepting the needs of the public and producing more eco-friendly cars with less emission and increased fuel efficiency.
Moreover, the event has also paved the way for the emergence of Mobility-as-a-Service, which provides convenience and eco-friendly solutions to people in their transportation needs. In light of the shift in societies’ needs, the automotive industry must remember to stay ahead of the competition and keep up with the changing times.
