“HUMMER”: GM Drops the Bomb (4/11/2005)
In the new book about the history of HUMMER, TCC editor Marty Padgett explains how the brand got its auto-show inauguration.
Soaring oil prices, angry environmentalists. Few folks should be surprised to see the decline in the traditional SUV market, especial as buyers switch to more fuel-efficient crossovers. But one brand defies the trend. Since the beginning of the year, HUMMER sales have skyrocketed an inspiring 93 percent.
Certainly, the new, downsized H3 deserves much of the credit for HUMMER’s recent success. But observers also note the work done by Susan Docherty, a 20-year General Motors veteran and the GM division’s general manager. Docherty plans an aggressive expansion of the HUMMER lineup, including variants of existing products and new models, such as a HUMMER pickup — though she stresses that any new model must be based on the brand’s “iconic design and incredible off-road capabilities.”
In a segment on the television show, Autoline: Detroit, set to air early next year, Docherty discussed HUMMER’s past, present, and future with host John McElroy, newswoman Anita Lienert, and TheCarConnection.com’s Publisher, TCC Team. This Q&A was drawn from that appearance and a subsequent conversation.
Q: How are you able to get so many people into your showroom when other parts of GM can’t?
DOCHERTY: We certainly have plenty of challenges this year, but…our sales are up 94 percent so far this year, largely due to the HUMMER H3. And what I think we’re seeing is that in a crowded sea of sameness among SUVs, the HUMMER brand stands out as a segment-buster. I think we have a brand proposition of iconic design and unparalleled off-road capabilities. It’s a very specific target market that finds value in what we are offering.
Q: Yet, not long ago, we in the media were ready to write you off. HUMMER seemed running out of steam.
DOCHERTY: When we introduced the new H3, we had to understand, first and foremost, that it’s an authentic HUMMER; everything everyone expected with the H1 and H2 off-road capabilities and styling. (But) a HUMMER getting up to 20 miles per gallon and starting at under $30,000, that’s been resonating with all the aspects socially and politically in the market right now.
Q: It seems like HUMMER has a cachet, much like (Chrysler’s) HEMI, that you’re capitalizing on.
DOCHERTY: HUMMER is definitely GM’s most daring brand, one that is very macho and masculine and rugged, but at the same point, irreverent. No one needs a HUMMER, but it becomes, ‘I’ve got to have a HUMMER.’ Having that emotion and awareness of the brand is something I have to work to preserve.
Q: You put the emphasis on macho, but isn’t it largely a female team running HUMMER these days?
DOCHERTY: My product managers…are women. Many of the people in the marketing department, including Liz Vanzura, our marketing director, are women. Our public relation manager is a woman. And now we have a woman VLE on the H3 (Vehicle Line Executive) who handles all the future product programs. My counterpart on the manufacturing side is also a woman, Lori Queen. I think these women understand what the brand is about…and help us put a very human face on the brand.
Q: H3 has really changed the brand’s fortunes, but are you in danger of being a one-trick pony? How do you follow up?
DOCHERTY: There is room for this brand to expand beyond the segments we’re competing in now. But we have to be very sure that as we grow into other segments, it needs to be segments in which the proposition of iconic design and unparalleled of-road capabilities resonate. I can tell you HUMMER will never be a minivan. No one in a minivan ever needs to be going off-road. I could definitely see people who are pickup drivers needing off-road capabilities. But we want to be very careful and plan what that growth will be.
Q: GM has been putting an emphasis on expanding its aftermarket business, and we understand HUMMER may be particularly successful in getting buyers to opt for all sorts of accessories.
DOCHERTY: The base price of the H3 is $29,500 but the typical transaction price is around $36,000. On average, a person will spend about $1200 (just on aftermarket accessories, beyond regular options). With the H2, the base starts at $52,000, but the average transaction price is $58,000. And they spend about $1800 on aftermarket accessories. That’s just for what they get from SPO (GM’s aftermarket division). There may be other things they’re buying I can’t track.
Q: You’re talking about taking the brand globally. How do you crack that market?
DOCHERTY: We just invested over $100 million in a plant that we have in South Africa, near Port Elizabeth, and starting in the fourth quarter of next year, we will begin producing global H3s (which) will meet all the global specifications for lighting, and those kinds of things. Once that plant is up and running, it will enable us to service our international markets and allow our plant in the United States to service Canada, the United States, and Mexico.
Q: Will you have right-hand drive?
DOCHERTY: Yes, we will. We’re going to start off with left-hand (and) gas, and six months later, we’ll move to right-hand and gas. And in the beginning of the ’08 model year, we’ll add diesel.
Q: And will you bring diesel here, too?
DOCHERTY: We would love to take the diesel that we’re going to put in the global H3 and bring it here, but right now, we’re up against the new diesel particulate requirements that engine won’t meet. Are we investigating (options)? You bet. I think it would be a great addition to our line-up. It would be a great fit, considering our military heritage.
Q: And a hybrid HUMMER?
DOCHERTY: I think it would be a great idea, as well, but from General Motors’ focus, we want to work on hybrid technology first for our more mainstream vehicles. But we’re looking at it.