Tuesday, March 24, 2009

The Clock is Ticking


GM said by March 31st the Hummer brand would either be sold or discontinued. Although at the present time no one knows the fate of Hummer, two things are certain. First, if the brand is sold the new owners would have years of design and testing done for them so there would be a fluid continuation of the brand. Second, if the brand is discontinued, Hummers will become the most valued SUVs ever made, in both capability and price.

Dealers report sales of Hummers have been up in March and that bodes well for the brand. The heavy discounts have made buyers more receptive in spite of the fact they may not have a Hummer dealer to take their Hummer back to for service and warranty work in the future. If this impediment could be removed, my longtime friend, Martin Walsh estimated that 2009 sales of the Hummer would be two to three times what they are now.

Another big question mark is how far will fuel prices rise this summer. When gas goes up SUV sales go down and many landmark dealerships for GM have stocked up on small compact and high mpg vehicles, betting their future on the demand for these cars this year and the hope that higher gas prices will bring in more trades for economical cars. Therefore, most dealerships in the US are working against the continuation of the large SUV and Hummer brand. One thing is for sure, there will always be a need for a large reliable 4 X 4 with the capabilities and comfort of the Hummer!

Another wildcard is the H1, and AMG Hummer facility for the H2. A lot of money was invested in the H2 plant to make it a state of the art facility and investors are aware of that. In my opinion, there is no more of a modern and well though out manufacturing plant for a large SUV than the AMG H2 plant. Workers there are all top flight, highly motivated and produce one vehicle, and one only at the plant - the Hummer H2 and they do it EXTREMELY WELL!

GM never marketed the H1 very well because it was such low volume vehicle. I think the future for the civilian H1 could be one of the cornerstones for the continuation of the Hummer brand, despite US emission regulations for the diesel engine which partly led to the discontinuation of production.
Next month this time, we will know a lot more on the future of Hummer.

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