HUMMER, that most American of automotive brands, is going global. But if vehicles like the big, bold H2 trip alarms for American environmentalists, how will HUMMER play in “green”-conscious
General Motors will invest $100 million to upgrade its assembly plant in
“This is part of our strategy to make HUMMER a premium brand globally,” said Susan Docherty, HUMMER’s new general manager. The “iconic” nature of the brand, she added, is “something GM definitely needs to capitalize on.”
Conquering the world
It certainly looked like GM had scored a hit when HUMMER’s H2 was launched three years ago. The massive ute made magazine covers, talk shows and rock videos, and sales soared well beyond the automaker’s most ambitious expectations, more than doubling in 2003 to 34,529.
But few vehicles have proved more polarizing. The H2 and the original, military-style H1, connected with those looking for ultimate off-road capabilities and the biggest, baddest image possible. But to environmentalists, “The H2 is a poster child for what’s wrong” with the auto industry, and SUVs in particular, said David Healy, automotive analyst for Burnham Securities.
Whether it’s the result of an enviro-backlash, rising fuel prices, or simply the fad factor, HUMMER sales slipped sharply last year, dropping 17 percent, to 28,898.
Now the GM division is hoping to regain momentum. The critical piece in the new strategy is the launch of the H3. HUMMER’s third model line shares its fundamentals with the Chevrolet Colorado and
2005 HUMMER H3
Production of the H3 is shortly set to begin at a GM plant in
The downsized H3 is expected to be HUMMER’s biggest seller both here and abroad. Docherty said that once all three of HUMMER’s plants are up to speed, the marque’s sales could climb to 80,000 annually “in a two to three-year timeframe.” That would nearly triple 2004 volume.
Whether the carmaker can hit its target remains to be seen. Though the new H3 will be unmistakably a HUMMER, it won’t be quite so massive and menacing. And it will boast significantly better fuel economy than the gas-guzzling H1 and H2 models — as much as 20 miles per gallon, according to Docherty.
For overseas markets, where fuel prices run as high as $6.50 a gallon, HUMMER will also offer a diesel-powered version of the H3. And the South African plant will produce both left and right-hand versions of the new SUV. HUMMER already exports a small number of H2s to more than 30 countries around the world. The carmaker predicts strong demand in the Middle East, though
Not everyone believes HUMMER will be able to boost itself out of a sales slump. Analyst Healy believes it is little more than a “fad” brand, which has already run its course. But Docherty is more optimistic and noted that sales of the H2 have actually been picking up in recent months. She has approved modest increases in H2 production levels for the next few months.
HUMMER is hoping that the H3 will move the brand into more mainstream market segments. An even smaller and more affordable H4 model has been under consideration, but for the moment, at least, the project has not gotten the green light from GM’s product-development squad.