DETROIT — General Motors said on Wednesday that it would shut down Hummer, the brand of big sport utility vehicles that became synonymous with the term gas guzzler, after a deal to sell it to a Chinese manufacturer fell apart.

The buyer, Sichuan Tengzhong Heavy Industrial Machines, said in a statement that it had withdrawn its bid because it was unable to receive approval from the Chinese government, which was trying to put a new emphasis on limiting China’s dependence on imported oil and protecting the environment.

Tight financial markets also hurt the deal. When the commerce ministry did not bless the transaction, the well-capitalized Chinese banks became reluctant to lend money to Tengzhong, even though it tried to set up an overseas subsidiary to buy Hummer. That left Tengzhong trying to borrow money from Western banks that have been curtailing their lending even to established borrowers, much less a little-known company from western China.

A spokesman for Hummer, Nick Richards, said G.M. had no specific timetable for completing its wind-down, but left open the possibility that G.M. would be open to new bids.

“We just reached this decision today, so we’re just beginning the process,” Mr. Richards said. “Typically, winding down a brand can take several months. If there are viable alternatives for part of the brand or all of the brand during the process, we’ll consider them.”

G.M. had been trying to sell Hummer for nearly two years, and struck a preliminary deal with Tengzhong in June. The two companies had planned to complete the $150 million deal by the end of January, then delayed the deadline by a month in the hopes of receiving approval from China.

“We have since considered a number of possibilities for Hummer along the way, and we are disappointed that the deal with Tengzhong could not be completed,” John Smith, G.M.’s vice president for corporate planning and alliances, said in a statement. “G.M. will now work closely with Hummer employees, dealers and suppliers to wind down the business in an orderly and responsible manner.”

Over the years, Hummer shifted from a brawny status symbol that drew attention on the road into an automotive pariah. Gov. Arnold Schwarzenegger of California helped the brand become popular and once owned a fleet of Hummers, but more recently, he described the brand as prime evidence of the Detroit automakers’ failings.

Still, dealers and fans were optimistic that Hummer could live on.

They expected to see smaller, more fuel-efficient models introduced under Tengzhong that would help the brand “get away from people just thinking it was a big gas hog,” said Danny Hill, the general sales manager at Classic Hummer in Grapevine, Tex.

“It is a great, great vehicle that really does anything you want it to do,” Mr. Hill said. “It had a great concept to it. It’s a real shame that it’s going away, because the people who own Hummers, they just love them.”

It was the third time since G.M. emerged from bankruptcy protection last year that a deal to sell one of its unwanted brands collapsed. The company is shutting down Saturn, and it began to halt operations at Saab after a deal with Koenigsegg in Sweden was called off. G.M. later reached an agreement with a Dutch company, Spyker Cars; that deal was completed on Tuesday.

G.M. is also closing Pontiac, but it never tried to sell that brand. The carmaker is focusing on its Buick, Cadillac, Chevrolet and GMC brands as it works to recover from bankruptcy.

G.M. said it would honor Hummer warranties and provide service and parts to Hummer owners worldwide. Hummer has nearly 400 dealerships globally, including 153 in the United States.

The announcement was celebrated by environmentalists, who have long pressed G.M. simply to kill the brand, which was born from military Humvees in 1992. G.M. acquired it in 1999.

“Closing Hummer simultaneously improves the health of G.M., China and the planet,” said Daniel Becker, director of the Safe Climate Campaign at the Center for Auto Safety in Washington. “Hummer should rest in pieces.”

About 3,000 jobs in the United States could be affected by the shutdown, including positions at G.M. and dealerships. A factory in Shreveport, La., that builds the Hummer H3 and H3T, as well as other G.M. trucks, already was scheduled to close by 2012.

The larger H2 was built for G.M. by A. M. General in Mishawaka, Ind., until December, when production was temporarily halted to allow the sale process to conclude.

Mr. Richards said Hummer dealers in the United States had about 2,500 vehicles in their inventories. In January, the brand sold just 265 units in the country. Hummer sales plunged 67 percent in 2009, to a total of 9,046.

The deal would have made Tengzhong the first Chinese company to sell vehicles in North America, though it planned to keep Hummer’s operations in the United States.

“Tengzhong worked earnestly to achieve an acquisition that it believed to be a tremendous opportunity to acquire a global brand at an attractive price,” Tengzhong said in its statement.

Its bid for Hummer was an audacious move, particularly by Chinese standards. The company is privately held, so it did not have the connections that many government-owned enterprises enjoy; by contrast, government agencies own part or all of China’s 10 largest automakers.

Tengzhong concluded the initial deal with G.M. in June and was supposed to close the deal by September. Some in Detroit were furious that the Chinese review process then dragged on for eight months, during which the American auto industry showed few signs of recovery and the potential value of Hummer continued to decline.

The timing of Tengzhong’s bid was bad from the beginning. High oil prices in the summer of 2008 led to a broad move by the Chinese government to improve energy efficiency and limit oil imports.

Feb. 5 (Bloomberg) — Ford Motor Co., seeking to raise cash to avoid a federal bailout, is in talks to sell its Volvo Car unit to China’s Geely Automobile Holdings Ltd., according to three people familiar with the discussions.

Ford probably will get less than the $6.4 billion it paid for Sweden-based Volvo in 1999, said one of the people, who declined to be identified because the preliminary talks are confidential. Ford has also approached China’s Chery Automobile Co. and Chongqing Changan Automobile Co., the people said.

Dearborn, Michigan-based Ford lost a record $14.6 billion last year and is trying to avoid asking for government loans to survive as U.S. auto sales plunge to the lowest level in almost 27 years. Geely founder Li Shufu, 45, may want to buy Ford’s last European luxury brand after the addition of sedans to the Chinese automaker’s range of low-cost compacts helped boost profit “significantly” last year.

“Whether it can consummate into a deal is a big question,” said Alice Chong, an analyst at CIMB-GK Securities. Buying Volvo “would help Geely break into new markets and get better technology, but Geely may have to suffer short-term losses as sales in Europe and the U.S. are collapsing.”

Ford spokesman Mark Truby and Geely spokesman Zhang Xiaodong declined to comment. Zhou Qin, a Changan Auto spokesman, did not answer a call to his mobile phone and Chery spokesman Jin Yibo did not answer a call to his office phone.

Geely’s Approach

Geely, China’s largest privately owned carmaker, first approached Ford about buying Volvo a year ago, before the U.S. automaker had decided to sell its Swedish auto unit, two of the people said. Preliminary talks began in December after Ford said it would consider selling the unit.

Geely has received permission from China’s National Development and Reform Commission to study the acquisition, said the people. The government agency must sign off on any major merger and acquisition talks before discussions can begin.

The automaker has already received commitments from Export- Import Bank of China to provide the necessary financing for the acquisition, the people said.

“Chinese automakers want to tap foreign rivals’ resources in technical development,” said Zhang Xin, an analyst at Guotai Junan Securities Co. in Beijing. “To catch up with foreign automakers by themselves takes a lot of both time and capital. Acquisitions could help them.”

Sales documents will be sent to prospective buyers in the middle of February, a person familiar with the plans said last month.

Ford fell 3 cents to $1.92 at 10 a.m. in New York Stock Exchange trading. The shares have fallen 70 percent in the past 12 months.

Volvo’s Struggles

Volvo, based in Gothenburg, Sweden, has struggled as the global auto market declines and other automakers make gains in safety technology, a long-time strength for the automaker. Volvo’s U.S. sales fell 64 percent last year. Ford said Volvo had a pretax loss of $736 million in the fourth quarter.

Volvo, the maker of S80 sedans and C70 coupes, was once central to a failed strategy by Ford to reap a third of its profits from luxury autos. The automaker has been shedding European brands under Chief Executive Officer Alan Mulally, recruited from Boeing Co. in 2006.

Last June, Ford sold Jaguar and Land Rover to India’s Tata Motors Ltd. for $2.4 billion. It sold its Aston Martin luxury line for $931 million in May of 2007 to a group of investors.

Geely’s Goal

Geely Auto’s profit rose last year, helped by sales of new models such as the 1.3-liter Panda. The Hong Kong-listed company also benefited from boosting its stakes in units under a group restructuring, it said in a stock exchange statement today. It didn’t release its actual 2008 results.

Geely Holding Group, based in Hangzhou, Zhejiang Province, eastern China, was founded two decades ago by Li, a former farmer who amassed a net worth of $220 million, according to Forbes magazine.

The company boosted overseas sales 80 percent last year, it said in December, without giving a precise sales number. In 2007, it sold almost 30,000 vehicles overseas, according to the company’s Web site.

The automaker is expanding outside of China and adding larger models as rising wages and increasing competition from foreign carmakers damp domestic sales of low-cost compacts. Geely Group expects to boost sales 25 percent this year, it said last month.

Geely Auto rose 1.7 percent to 60 HK cents at the close of trading in Hong Kong.

Ford provides engines to some Volvo cars and the two automakers share mechanical underpinnings on several models. Any buyer would have to be assured that Ford will remain healthy enough to provide those key components to Volvo, the people said.

Geely would likely seek to buy Ford’s entire equity stake in Volvo rather than negotiate with the Swedish unit over purchases of specific assets, the people said.

Ford creditors are likely to receive some, or even all, of the proceeds from any sale of Volvo. Ford pledged Volvo as part of the collateral it put up for $23 billion in loans it secured in 2006.

SOURCE: BLOOMBERG.COM