China's environmental concerns have dashed Tengzhong's dream of buying the iconic Hummer brand from General Motors, but the once little-known firm has now made a name for itself, analysts said Thursday.

Sichuan Tengzhong Heavy Industrial Machinery, based in southwest China, raised eyebrows when it announced in June last year that it would buy General Motors' world-famous brand of gas-guzzling sport utility vehicles.

Nearly nine months later, when Tengzhong announced Thursday it had withdrawn its offer to acquire Hummer after it failed to get approval from Chinese authorities, analysts expressed little surprise.

"Hummer is a fuel-gobbling vehicle," said Liu Feng, a Beijing-based auto analyst with Southwest Securities.

"The government rejected the deal to indicate a direction -- China wants economical and environmentally-friendly vehicles, rather than ones with large emissions and high-fuel consumption."

Hummer, modelled after the US military's Humvee, has become a global symbol of wasteful pollution, and China is already suffering from serious environmental degradation resulting from decades of breakneck economic growth.

Chinese commerce ministry spokesman Yao Jian hinted Thursday that concerns about the image the deal would present of Beijing's environmental priorities had led to its demise.

"China's overall policy is certainly similar to the global trend -- we'll further encourage a sustainable economic development model and a green economy," Yao said.

Beijing has ambitious plans to build a world-class automotive industry by 2020, and as such tightly controls all activity in the sector.

But from the start, analysts had doubted that the privately-owned Tengzhong, which until now had made machines to build roads and bridges, or used in the energy industry, had enough expertise in global trade or auto production.

"The government has shown it doesn't approve of companies with no experience in car production or operations to start a business in the sector," said Liu.

Commerce ministry spokesman Yao hinted the experience issue had been a factor, saying Tengzhong had never offered government regulators a "complete acquisition plan" and should have consulted attorneys and accountants.

Klaus Paur, North Asia director for market research company TNS, said of all the recent proposed auto tie-ups between Chinese and foreign firms, such as Geely's bid to acquire Volvo, this was the least likely.

"This was probably the most vulnerable because there is absolutely no experience at the moment coming from Tengzhong," he said.

"At the same time the brand proposition of Hummer itself is against the strategic outline of the Chinese government, which is mainly that they want to produce energy-efficient vehicles."

Chen Liang, a Nanjing-based analyst with Huatai Securities, added that China's history of overseas acquisitions was littered with examples of domestic firms failing to digest foreign entities they bought.

SAIC, China's largest automaker in terms of sales, bought South Korea's Ssangyong in 2004 and has failed to make a success of the brand, even blaming it for a huge profit drop in 2008.

Chen also pointed to Chinese IT giant Lenovo, which he said had still not fully incorporated all the IBM operations it bought in 2005 to much global fanfare.

"In the case of Tengzhong, it would be even more difficult to digest what it acquired as it has no experience in the auto industry," he said.

However, Paur defended the Sichuan-based company, saying it had seen a business opportunity, had the capital, and made a serious business proposal.

"We are currently in a situation where all these brands -- Volvo, Saab Hummer... -- can be acquired for a relatively low price," he said.

"Yes they had no experience but they could move into this one, develop the brand further, and have one additional strategic direction."

Analysts also say Tengzhong also had correctly pinpointed the rapidly growing market for sport utility vehicles in urban China as a way for Hummer to revive its global fortunes.

"Tengzhong had a purpose," said Liu.

"Before the deal, who knew the company? It became famous because of the deal, and now everyone knows it is a firm with quite a few assets."