AM General and Changfeng Combine to Buy Hummer?

It was only a matter of time before someone showed more than just fleeting interest in one of General Motors' struggling

brands. After all, while the various brands may not be performing well right now, the opportunity to literally buy into the massive North American market is way too tempting for an outsider, in this case being China's Hunan Changfeng Motor Co. A Chinese company interested in purchasing an American asset is hardly anything new, and we've been expecting that one of the Big 3, especially GM or Chrysler, would find suitors for  their well established brands sooner or later. What's more, knew that Changfeng was interested in Hummer soon after GM announced its intentions to sell brand by 2009 earlier this year, but we didn't expect rumors that Hummer's originator, AM General LLC, would be in on the action.

AM General, an offshoot of American Motors which owned the Jeep brand before Renault bought it and Chrysler eventually purchased it off of the French automaker, appears to want its storied brand back. AM General is a heavy duty vehicle manufacturer headquartered in South Bend, Indiana best known for its military-spec HMMWV (High Mobility Multipurpose Wheeled Vehicle), nicknamed HUMVEE and then finally HUMMER, that became a household name via its involvement in and CNN's coverage of Desert Storm.

And GM has been a good caretaker since it took over marketing rights of the brand, having spent millions in promotion, developed and refined two unique SUVs and two pickup truck versions for a four-model lineup, and even having fought DaimlerChrysler, at the time, and won the rights to continue using the seven-slot vertical grille (Hummer originated from Jeep as it is, and therefore had every right to the brand's identity). Despite lagging sales and a negative association amongst the green crowd, the Hummer brand is in good shape and would be ideal for AM General which has continued to support the sales arrangement with GM despite mothballing the civilian version of its original H1 in 2006; it's even possible to access the www.hummer.com website via www.amgeneral.com. And while the AM General deal makes perfect sense for the Hummer brand, it's made even better through the partnership with Changfeng.

And how does Changfeng fit into the picture? The first thought that might come to mind is the production of Hummers in China, but according to reports the China-American partnership would continue producing future Hummers in the US and predominantly sell them to North American buyers. Possibly a recent Hummer sales rally has increased interest in the brand, considered to be directly related to lower fuel prices, but either way it appears that GM may very likely sell off its stake in Hummer in 2009 as it initially stated.