GM's sale of Hummer is part of an effort by the Detroit-based firm to drop four unprofitable vehicle lines and emerge from bankruptcy a leaner company.

Chinese market

A top official for GM said Tengzhong would not only keep producing the Hummer model, but also develop an environmentally friendly version.

"We're just excited that Hummer may live on"

Morgan Johnson,
Hummer factory union representative

And Tengzhong said the Chinese domestic market was likely to play an important role in its global strategy.

"The company's strategy is to bring the Hummer brand global and that should certainly include the Chinese market," an official with the firm's public relations agency told the AFP news agency.

Tengzhong said in a joint statement with GM that "the team intends to expand Hummer's dealer network worldwide, particularly into new and underserved markets such as China".

The sale is still subject to regulatory approval and is expected to close in the third quarter.

The deal marks the first time that a Chinese buyer has acquired a brand from a US vehicle-maker.

If it goes through, more than 3,000 jobs would be saved at Hummer factories and dealerships across the US.

Tengzhong will retain Hummer's senior management and operational team, GM said in a statement, while the company will also enter into a long-term contract assembly and key component and material supply agreement with GM.

Job relief

In the Hummer plant in Shreveport, Louisiana, where 800 workers work on a single shift, union workers expressed relief that a new buyer would keep the line running for at least a while longer.

GM is looking to sell off loss-making brands as it restructures operations [GALLO/GETTY]
"We're just excited that Hummer may live on," Morgan Johnson, local president of the United Auto Workers union, told Reuters.

Chinese parts suppliers and carmakers have shopped for US automotive assets, including those at GM's also-bankrupt rival Chrysler, but the Tengzhong deal appears set to become the first to be completed.

Sichuan-based Tengzhong makes special-use vehicles, highway and bridge structural components, construction machinery, and energy facilities.

Hummers, originally built by AM General, were initially designed as multipurpose, off-road military vehicles.

The first model produced was the Humvee, which spun off into the civilian Hummer brand bought by GM in 1999.

But soaring fuel prices and the impact of the credit crunch have hit sales, with consumers in many key markets turning against the Hummer, seen as a symbol of 20th century excess with its macho styling and poor fuel economy.

AM General still makes the Humvee for the US military.