Hummer sales have started to decline worldwide, leading to suggestions that GM might drop the brand altogether. The main cause is fuel prices, with some analysts estimating it could hit $2/litre by year’s end.
To add to Hummer’s worries, GM CEO Rick Wagoner has been slowly downplaying Hummer’s role at GM. One American analyst went as far as to say “Hummer is the fat man in the lifeboat who might be tossed overboard”.
The biggest loser might be Hummer dealers worldwide, although Australian dealers all are linked with SAAB and GM Premium, having a new-to-Australia marquee already under threat does not instil confidence in the product. However with Cadillac expected later in the year, sales are bound to increase across the GM Premium range.
In the U.S., Hummer sales have fallen 36.0 percent compared with the year-ago and 48.1 percent from the same period in Hummer’s peak year, 2006.
The story is similar here, last month only 85 Hummers where sold following a steady decline in sales since the brand’s best month in January with 166 sales.
The Hummer brand has been under the GM umbrella since 1999 when the company bought the marketing rights to Hummers from AM General in Mishawaka, Ind. GM sold a small number of H1s, based on the Humvee military vehicle, this was followed by a full-sized H2 SUV in June 2002 which become a international icon (for good or bad).
GM has only imported the smaller H3 Hummer to our shores with talk of bringing diesel and V8 variants in the future. GM Insiders say the board now sees Hummer as a liability that’s hard to sell and hard to make fuel-efficient, which is surprising given the opportunity for diesel and hybrid models in the future.
“GM has to focus on increasing profitability on volume vehicles, and Hummer doesn’t do it, there’s no such thing as a completely unredeemable brand, but the question is: What volume do they need out of it at this point for it to work?” said Jim Hall, a former GM employee and managing director at 2953 Analytics, a consulting firm in suburban Detroit.
Even if GM does decide to sell the brand, who exactly will be interested? Perhaps India’s Mahindra & Mahindra? Looking to compete with Tata Motors and their recent acquisition of Jaguar and Land Rover.
Not much is expected to change in the interim however:
“The strategic review is a very serious effort, or we wouldn’t have announced it,” said Hummer spokeswoman Joanne Krell. “But for Cadillac, Hummer and Saab, business continues as usual.” a GM Spokeswomen said.
Can Hummer survive with a range of more fuel efficient vehicles? Or does the idea of a fuel-efficient Hummer sound like an oxymoron?