I love irony. Here is a little quiz for you. Which automotive company posted these numbers in China? We quote an article which we’ll disclose momentarily, In the first five months of 2009, X’s sales there increased 33.8%, to 671,148 units. They were up 75% in May over the previous year.
Are you thinking Chery or Buffett’s investment in BYD? Maybe Toyota? Well, you’d be wrong. Those numbers were posted by our friends at General Motors, according to this article from Forbes. Interestingly enough, GM’s strategy in China ” to open a new factory, bring on many new models and grow to over 2m units in sales annually sounds more like a classic Harvard Business School Case Study and not a company owned by the Feds. The Forbes article raises some interesting points about GM’s strategy around investing in high growth areas and outflanking the competition.
So it appears to this writer, a little ironic that China’s Sichuan Tengzhong Heavy Industrial Machinery Company, a heavy machinery maker has set its sights on Hummer. But I’ll return to that in a minute.
A few days ago, the somewhat outrageous but gifted writer, PJ O’Rourke made an appearance on CNBC’s Morning Joe to promote his new book, Driving Like Crazy: Thirty Years of Vehicular Hell-bending, Celebrating America the Way It’s Supposed To Be — With an Oil Well in Every Backyard, a Cadillac … of the Federal Reserve Mowing Our Lawn, (make sure you check out the title of the first chapter which isn’t fit for publication on MetalMiner). The tagline under the screen read something to the effect of Are the fun-suckers ruining America? I won’t comment on that but the notion that the fun is moving elsewhere seems apparent.
It will be interesting to watch the investments Chinese firms make as they seek to both develop and satisfy rising domestic consumerism. And here the Hummer acquisition makes perfect sense. It’s the ultimate in consumerism. Yet it flies in the face of our own green revolution or new green economy.
To quote my colleague, If there is one thing we love about the Hummer (about the only thing) is that it consumes lots of steel and aluminum, and lets face it our producers could do with a return to full production. At a 4700 pound curb weight the Hummer H3 consumes a lot of steel per vehicle, but production volumes have never been large, according to Week End Post. They only made close to 15,000 of the latest H3 model. It will be interesting and perhaps even ironic to see what consumers demand in China and how that will change the metals industry.