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<H1><FONT face=Arial,Helvetica>H2 sales on the decline</FONT></H1><FONT size=5>Although faced with higher gas prices and H3's debut, GM isn't worried </FONT> By ANDREW SOUKUP Tribune Staff Writer <TABLE cellSpacing=5 cellPadding=6 width=240 align=right bgColor=#ffffcc border=0> <TBODY> <TR> <TD> <FONT face=Arial,Helvetica size=2>An AM General worker checks an H2 door panel for imperfections before the product was rolled out in 2002. Sales of the H2 are lagging, but General Motors officials don't believe gas prices are the cause. <P align=right><FONT size=-1>Tribune File Photo</FONT></P> <HR> <H3>About the H3</H3> <LI>The H3 is scheduled to hit dealer showrooms later this spring. However, this latest entry will be the first Hummer-brand vehicle not to be built in Mishawaka. Instead, General Motors plans to build the H3s at a facility in Shreveport, La. The midsize SUVs will be shipped to North America and some European markets. <LI>On Wednesday, the automaker announced it plans to build a second H3 factory in South Africa. When that facility begins shipping H3s in 2006, it will mark the first time a Hummer has been built outside of the United States. Source: General Motors Corp. </FONT></LI></TD></TR></TBODY></TABLE> </P> General Motors Corp. says it isn't worried by gradually declining H2 sales.</P> But industry analysts say sales of the Mishawaka-made sport utility vehicles could continue to drop because of rising gas prices and the new H3, which is scheduled to hit showroom floors in the next few months.</P> For the first three months of 2005, General Motors shipped 5,883 H2s, a 6.6 percent decline from 2004.</P> GM spokesman David Caldwell considers 2004 the benchmark year for the H2, which was introduced to intense demand in mid-2002.</P> The automaker, which owns the rights to the Hummer brand, doesn't believe that high gas prices will deter people from purchasing the H2 in the short term.</P> "We're dealing with a pretty wealthy customer on average," Caldwell said.</P> Analysts agree. The consumer who can afford a vehicle that starts at $48,000 doesn't have to worry about getting about 12 miles per gallon, they say.</P> "In terms of current Hummer sales, unless gas prices hit the $3 or $3.50 mark, gas won't affect Hummer sales," Edmunds.com market analyst Mike Chung said.</P> While H2 sales have declined in 2005, Chung doesn't believe the high-end vehicles are underperforming in the marketplace.</P> Instead, he notes that much of the luster that accompanied the H2's highly anticipated launch has largely faded.</P> "The market is saturated," he said. "A lot of the people who really wanted the H2 have already gotten it, and a lot of the buzz is dying down."</P> Shrinking Hummer sales will most likely have a tangible effect on South Bend-based AM General's operations.</P> That was part of the reason why AM General cut its second shift at the Mishawaka H2 plant in October. The workers who weren't moved to first-shift production were sent to the H1/Humvee plant, which is busy filling military orders.</P> Declining interest in the H2 and the high price tag on the $100,000 H1 -- which represent just 1 percent of all Hummer sales -- were some of the reasons why GM announced it planned to introduce the H3 this spring.</P> The midsize SUV, which will carry an estimated sticker price somewhere between $30,000 and $35,000, will be built at a GM plant in Louisiana.</P> There isn't nearly the same amount of buzz surrounding the H3 launch as there was for the H2, a product of the fierce competition in the midsize SUV class, Chung said.</P> However, he noted that devoted Hummer enthusiasts could trade in their H2s for more fuel (and wallet) friendly H3s -- further cutting into H2 sales.</P> "When the H2 came out, it attracted people to the Hummer brand," he said. "And with the H3, a lot of loyal buyers might see it as a better alternative."</P> For GM, the stakes aren't so high.</P> Hummer sales make up a scant 1 percent of the giant automaker's total SUV shipments, according to company figures.</P> Nor does the company believe gas prices will completely chase people away from purchasing the locally manufactured vehicles.</P> "It's one of many things that we keep an eye on, and it's something that does have a potential impact," Caldwell said. "But we're much more worried over things which we do have control."</P></Table> |
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<H1><FONT face=Arial,Helvetica>H2 sales on the decline</FONT></H1><FONT size=5>Although faced with higher gas prices and H3's debut, GM isn't worried </FONT> By ANDREW SOUKUP Tribune Staff Writer <TABLE cellSpacing=5 cellPadding=6 width=240 align=right bgColor=#ffffcc border=0> <TBODY> <TR> <TD> <FONT face=Arial,Helvetica size=2>An AM General worker checks an H2 door panel for imperfections before the product was rolled out in 2002. Sales of the H2 are lagging, but General Motors officials don't believe gas prices are the cause. <P align=right><FONT size=-1>Tribune File Photo</FONT></P> <HR> <H3>About the H3</H3> <LI>The H3 is scheduled to hit dealer showrooms later this spring. However, this latest entry will be the first Hummer-brand vehicle not to be built in Mishawaka. Instead, General Motors plans to build the H3s at a facility in Shreveport, La. The midsize SUVs will be shipped to North America and some European markets. <LI>On Wednesday, the automaker announced it plans to build a second H3 factory in South Africa. When that facility begins shipping H3s in 2006, it will mark the first time a Hummer has been built outside of the United States. Source: General Motors Corp. </FONT></LI></TD></TR></TBODY></TABLE> </P> General Motors Corp. says it isn't worried by gradually declining H2 sales.</P> But industry analysts say sales of the Mishawaka-made sport utility vehicles could continue to drop because of rising gas prices and the new H3, which is scheduled to hit showroom floors in the next few months.</P> For the first three months of 2005, General Motors shipped 5,883 H2s, a 6.6 percent decline from 2004.</P> GM spokesman David Caldwell considers 2004 the benchmark year for the H2, which was introduced to intense demand in mid-2002.</P> The automaker, which owns the rights to the Hummer brand, doesn't believe that high gas prices will deter people from purchasing the H2 in the short term.</P> "We're dealing with a pretty wealthy customer on average," Caldwell said.</P> Analysts agree. The consumer who can afford a vehicle that starts at $48,000 doesn't have to worry about getting about 12 miles per gallon, they say.</P> "In terms of current Hummer sales, unless gas prices hit the $3 or $3.50 mark, gas won't affect Hummer sales," Edmunds.com market analyst Mike Chung said.</P> While H2 sales have declined in 2005, Chung doesn't believe the high-end vehicles are underperforming in the marketplace.</P> Instead, he notes that much of the luster that accompanied the H2's highly anticipated launch has largely faded.</P> "The market is saturated," he said. "A lot of the people who really wanted the H2 have already gotten it, and a lot of the buzz is dying down."</P> Shrinking Hummer sales will most likely have a tangible effect on South Bend-based AM General's operations.</P> That was part of the reason why AM General cut its second shift at the Mishawaka H2 plant in October. The workers who weren't moved to first-shift production were sent to the H1/Humvee plant, which is busy filling military orders.</P> Declining interest in the H2 and the high price tag on the $100,000 H1 -- which represent just 1 percent of all Hummer sales -- were some of the reasons why GM announced it planned to introduce the H3 this spring.</P> The midsize SUV, which will carry an estimated sticker price somewhere between $30,000 and $35,000, will be built at a GM plant in Louisiana.</P> There isn't nearly the same amount of buzz surrounding the H3 launch as there was for the H2, a product of the fierce competition in the midsize SUV class, Chung said.</P> However, he noted that devoted Hummer enthusiasts could trade in their H2s for more fuel (and wallet) friendly H3s -- further cutting into H2 sales.</P> "When the H2 came out, it attracted people to the Hummer brand," he said. "And with the H3, a lot of loyal buyers might see it as a better alternative."</P> For GM, the stakes aren't so high.</P> Hummer sales make up a scant 1 percent of the giant automaker's total SUV shipments, according to company figures.</P> Nor does the company believe gas prices will completely chase people away from purchasing the locally manufactured vehicles.</P> "It's one of many things that we keep an eye on, and it's something that does have a potential impact," Caldwell said. "But we're much more worried over things which we do have control."</P></Table> |
<Table><SPAN class=standardtext><SPAN class=storyheadline>Gas prices not stopping
Hummer sales</SPAN> <TABLE cellPadding=5 width=200 align=left> <TBODY> <TR> <TD vAlign=top> <SPAN class=caption>The record high gas prices don't seem to be affecting the sales of Gm's H2</SPAN> <SPAN class=caption></SPAN></TD></TR></TBODY></TABLE> <SPAN class=storyDate>Posted: 04/07/2005 06:30 pm</SPAN> <SPAN class=byline>Story filed by NewsCenter16 Reporter Robert Borrelli</SPAN> Michiana - With the price of gas skyrocketing and many pinching pennies to fill-up, many are questioning what impact the situation had on sales of Mishawaka's Hummer. Tyler Hummer in Niles is a place where'd you expect to see a lot of hummers, but that's not the case, as the huge, fuel hungry SUV's are still selling amid near record-high gas prices. The price of gas isn't hurting business as Tyler Hummer has just two Hummers on the lot. Andrew Ballard of Tyler Hummer said, “We're virtually selling every Hummer we can get right now. I think with the H2 buyer they have a significant amount of disposable income and it really doesn't effect their lifestyle." Last year, nearly 29,000 H2's were sold nationwide. So far this year, sales of the H2 that start at $53,000 are on pace. Gm’s Hummer Manager David Caldwell said, “Consumer demand, as reported by our dealers, is actually a little stronger, maybe than we thought." The H2 get about 10-12 miles per gallon, but the bottom line is if the buyer can afford the truck, the price of gas doesn't matter. "For some people it's a very, very large consideration. For others it's not so much, it certainly effects everyone," said Caldwell. The new H3, built in Shreveport, Louisiana, will roll out soon. It will be a new, smaller hummer set to sell for about $30,000 and get better mileage than it's larger brothers. "We have the H3 coming out in June, which is a smaller hummer and that will be getting up to 20-miles per gallon," said Ballard. The rising cost of gasoline, so far, isn't enough to impact Hummer sales. GM officials say they even plan a small increase in hummer production to keep pace with demand for the large SUV. </SPAN></Table> |
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