Hummer tries downsizing to rescue falling sales
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Hummer tries downsizing to rescue falling sales - 4/6/2008 7:32:24 AM
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Gunner_45
Posts: 1911
Joined: 12/14/2006
From: North Central Texas
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Not a lot of new info, but an interesting read none the less. The sales figures are what got me.
Hummer tries downsizing to rescue falling sales
10:42 AM CDT on Saturday, April 5, 2008
By TERRY BOX / The Dallas Morning News
tbox@dallasnews.com
Environmentalists may soon have trouble spotting lumbering Hummers, those larger-than-life SUVs they love to hate.
With sales of the brutish H2 in a free fall – they dropped from 28,898 in '04 to 12,431 last year – new Hummer models will be smaller, shorter, lighter and more fuel-efficient, says Martin Walsh, general manager of the division.
Fuel prices have soared in the last four years, as has environmental awareness – both of which work against the H2, a big, blunt, 6,600-pound vehicle that typically gets about 13 miles per gallon and is often viewed as the poster child for profligate SUVs.
"No one saw all of these changes coming," Mr. Walsh said this week at the Dallas Auto Show. "The segment five years ago was very strong. I don't think anyone could have foreseen all these shifts."
About 11.5 percent of Hummer's 55,986 sales last year were in Texas, one of its strongest states.
Environmentalists are unlikely to ever buy any Hummer, and the company – a division of General Motors Corp. – has no intention of changing just to appease them. But Mr. Walsh believes the green shift is permanent, and Hummer must continue responding to it.
"Environmentalism is here to stay," he said. "I think it will continue to shape our culture. As we bring new vehicles to market, we will continue to get smaller and more fuel-efficient."
Three years ago, the division introduced the H3 – a sort of Hummer Light that looks like an H2 but is 2,000 pounds lighter and built on a midsize pickup chassis with a 242-horsepower, five-cylinder engine. The H2, in comparison, rides on a modified Chevy Tahoe full-size SUV platform with a 393-horsepower V-8 under its distinctive, stubby hood.
The H3 outsold the larger H2 last year 3-to-1 – 43,430 to 12,431, according to Automotive News sales numbers.
Mr. Walsh came to Dallas to introduce the H3T, which has a small pickup bed in place of the cargo area on the regular H3.
Like all GM divisions, Hummer is considering more approaches than just smaller, lighter vehicles. They include bio-fuel trucks that can burn ethanol or gasoline, electric power and at some point, fuel cells. By 2010, all H2 and H3 Hummers will be capable of burning E-85 or gasoline, he said.
A hybrid Hummer is not an option, Mr. Walsh said.
"Until the technology changes, it won't work for us," he said. "It just doesn't provide us with the torque we need for off-road use."
As Hummer struggles to adapt, the division's biggest challenge will be maintaining its rough Rambo image as its vehicles shrink.
"I don't think they can – just look at the Jeep Compass," said Todd Turner, president of Car Concepts in Thousand Oaks, Calif. "The whole point of the brand is to be in-your-face, over-the-top extreme. I think the H3 is the limit to where you can go."
Dallas luxury-car dealer Carl Sewell is more optimistic – and he has millions at stake in this outcome. Mr. Sewell, who owns two Hummer dealerships in Dallas and Plano, is one of 35 people nationwide with stand-alone stores. The vast majority of Hummer's 170 dealers in the U.S. are paired with other brands.
Like many Hummer dealers, Mr. Sewell is encouraged by the HX concept vehicle, which is about the size of a Jeep Wrangler and powered by a 3.6-liter V-6 engine.
"We are all convinced that Hummer is moving toward smaller, more fuel-efficient vehicles that are still exciting with great off-road capability," said Mr. Sewell, who estimated that sales at his dealership
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