For all those out there struggling to sell your gas-guzzling SUVs, trading down to cope with $4 gasoline, rest assured that General Motors Corp. shares your frustration.
The automaker has apparently hit some speedbumps in its effort to divest its Hummer unit. India's Economic Times
reported
Monday that domestic carmaker Mahindra & Mahindra Ltd. has backed
out of the auction, saying it prefers to develop its own, more
environmentally-friendly product line. Reuters, meanwhile,
says
that Russian billionaire Oleg Deripaska's Russian Machines and China's
Hunan Changfeng Motor Co. have also said they are uninterested.
The reports are a blow to GM, which is hoping to use divestitures to help fund a recovery after losing $15.5 billion in the second quarter. The company put Hummer on the block back in June, part of its plan to refocus its resources on smaller, more fuel efficient vehicles.
The lack of interest serves as a reminder that high fuel prices are not just a North American problem, however, auto sources see little reason for GM to panic. These international divestitures tend to be difficult and protracted, as Ford's year-long auction of Jaguar and Land Rover last year to Tata Motors Ltd. showed, and it is hard to say how much of the rhetoric in the press is a negotiating tactic.
Hummer doesn't have the same cachet as Jaguar or Aston Martin, which Ford also sold, but it is not without value. So while a deal might be difficult to accomplish, especially absent a continued drop in oil prices, the smart bet is still that GM finds a buyer. - Lou Whiteman
See Economic Times report
See Reuters report
See TheDeal.com story on GM's earnings
See TheDeal.com story on GM's decision to sell Hummer
See DealScape post on the sale of Jaguar and Land Rover
See DealWatch: Autos
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