Hummer acquisition blocked by Chinese authorities

China's Sichuan Tengzhong Heavy Industrial Machinery Company has hit a roadblock in its first ever US acquisition, after having emerged as the successful bidder of General Motors's Hummer brand.

In the first week of June Sichuan Tengzhong acquired the bankrupt auto giant's large sport utility vehicles and pickup trucks sold under the Hummer brand in a deal believed to be $500 million (See: GM's Hummer sold to Chinese company) 

The acquisition of Hummer, known as "Han Ma" or Bold Horse in China, and requires Chinese regulatory approval, is reported to being disfavoured by the National Development and Reform Commission on environmental grounds, Chinese state radio reported.

The Commission is making efforts to decrease pollution from Chinese auto manufacturers.

China has been promoting "environmental friendly cars" and giving incentives to automaker to enter this segment. It has been encouraging automakers to develop alternative-energy vehicles to curb oil imports and to help local companies challenge GM and Toyota, the world's biggest hybrid-car maker, overseas. China's BYD introduced its first hybrid car in China in December,2008.

Another stumbling block to the acquisition is Sichuan Tengzhong's lack of the required expertise in car production, state radio added.