GM has big idea: Smaller Hummer

Midsize SUV in 2005 likely to be huge seller
January 14, 2004



BY MARK PHELAN, JOCELYN PARKER AND JEFFREY MCCRACKEN
FREE PRESS BUSINESS WRITERS



Hummer, General Motors Corp.'s fastest growing and most controversial brand, is expected to nearly triple its sales when it adds a long-anticipated midsize SUV to its lineup just over a year from now.

Insiders told the Free Press on Tuesday that GM has decided to produce the smaller Hummer H3 beginning in 2005 at its assembly plant in Shreveport, La. The high-priced brand has become a staple with Hollywood glitterati and professional athletes, while its huge, military-style H1 and H2 SUVs inflame environmental extremists to the point that several of the fuel-thirsty trucks were torched at dealerships in 2003.

The H3 could account for 70,000 sales a year, said Mike Wall, an auto analyst with Farmington Hills-based consultant CSM International. Hummer sold a record 35,259 vehicles in 2003.

"GM is damned serious about Hummer," said Jim Hall, vice president for industry analysis in the Southfield office of California-based consultant AutoPacific.

In addition to the H3 four-door SUV, a GM insider said the brand may also get a midsize pickup similar to the H3T concept vehicle on display at the North American International auto Show at Cobo Center in Detroit.

To generate excitement about the H3T, GM took the unusual step of flying it in from the Greater Los Angeles Auto Show. It went on display Tuesday, three days after the Detroit show had opened to the public.

GM will build the H3 SUV alongside its Chevrolet Colorado and GMC Canyon midsize pickups in Shreveport, La.. The H3 shares its basic mechanical structure with those trucks, which went on sale late last year.

The new models could conceivably call for the addition of a third shift at the plant, which has 2,059 hourly employees and built 122,583 pickups in 2003, or less than half of its capacity, the GM insider said.

Shreveport can build about 260,000 vehicles a year with two shifts, Wall said.

The H3 could continue Hummer's astronomical growth. The brand skyrocketed from a few hundred H1s a year to 19,581 in 2002 -- the year the H2 debuted -- and 35,259 total sales in 2003.

GM could sell 50,000 to 100,000 H3s annually, company vice chairman Bob Lutz said in a recent interview at the auto show.

"If I could wave my magic wand, I'd have the H3 right now," Lutz said of the H3T concept pickup last week. "Hummer is a brand that has way more potential."

GM will begin building the H3 SUV in the first quarter of 2005, an insider confirmed for the Free Press. Sales should begin by spring 2005.

"It's a two-edged sword," Hall said. "Making Hummer more affordable risks making it less exclusive. Exclusivity and image is very important to Hummer."

H2 prices start at $49,270, while the even larger H1 has a starting price of $106,185.

Hummer's exclusivity has led to basketball phenomenon LeBron James gaining national publicity when he got a Hummer H2 for his 18th birthday last year, but the massive SUV has also become the embodiment of wasteful conspicuous consumption to environmental groups and frugal individuals.

Antipathy toward the three-ton-plus H2 peaked last year when some radical groups began vandalizing Hummer dealerships.

Although considerably smaller than the H2, the H3 isn't likely to win the brand any fans among environmentalists.

"I don't think this is good news at all," said Brendan Bell, associate Washington representative for the Sierra Club. "Part of the expansion of the Hummer brand is so GM can bring in buyers and move them into H2s." The H2 gets less than 10 miles per gallon of gasoline when driven at 30 to 40 miles an hour on a hard surface, according to GM. The SUV is so large that it falls outside the bounds of the vehicles for which the Environmental Protection Agency certifies fuel economy.

The H3 will give Hummer's pricey lineup its first affordable, high-volume vehicle, kicking the fast-growing brand into high gear.

Hummer's rugged image, which derives largely from pictures of the military Humvee in combat zones, makes the vehicles extremely profitable. The H2 shares its basic structure, engine and many other components with the Chevrolet Tahoe SUV, but its base price is more than $14,000 higher.

H3 prices will probably start around $35,000, Wall said. That's more than double the Chevy Colorado's $16,200 starting price.

The rugged-looking H3T concept provides a clear hint at the styling of the H3 SUV. Key visual characteristics like the pronounced grille, big tires and short front and rear overhangs make the small pickup -- nearly 2 feet shorter than a Dodge Dakota -- immediately identifiable as a Hummer.

The H3 will be the first Hummer built at a General Motors plant. The H1 and H2 are assembled for GM by Indiana-based AM General Corp. AM General also makes the military's Humvee.


Contact MARK PHELAN at 313-222-6731 or phelan@freepress.com.

Article

GM has big idea: Smaller Hummer

Midsize SUV in 2005 likely to be huge seller
January 14, 2004



BY MARK PHELAN, JOCELYN PARKER AND JEFFREY MCCRACKEN
FREE PRESS BUSINESS WRITERS



Hummer, General Motors Corp.'s fastest growing and most controversial brand, is expected to nearly triple its sales when it adds a long-anticipated midsize SUV to its lineup just over a year from now.

Insiders told the Free Press on Tuesday that GM has decided to produce the smaller Hummer H3 beginning in 2005 at its assembly plant in Shreveport, La. The high-priced brand has become a staple with Hollywood glitterati and professional athletes, while its huge, military-style H1 and H2 SUVs inflame environmental extremists to the point that several of the fuel-thirsty trucks were torched at dealerships in 2003.

The H3 could account for 70,000 sales a year, said Mike Wall, an auto analyst with Farmington Hills-based consultant CSM International. Hummer sold a record 35,259 vehicles in 2003.

"GM is damned serious about Hummer," said Jim Hall, vice president for industry analysis in the Southfield office of California-based consultant AutoPacific.

In addition to the H3 four-door SUV, a GM insider said the brand may also get a midsize pickup similar to the H3T concept vehicle on display at the North American International auto Show at Cobo Center in Detroit.

To generate excitement about the H3T, GM took the unusual step of flying it in from the Greater Los Angeles Auto Show. It went on display Tuesday, three days after the Detroit show had opened to the public.

GM will build the H3 SUV alongside its Chevrolet Colorado and GMC Canyon midsize pickups in Shreveport, La.. The H3 shares its basic mechanical structure with those trucks, which went on sale late last year.

The new models could conceivably call for the addition of a third shift at the plant, which has 2,059 hourly employees and built 122,583 pickups in 2003, or less than half of its capacity, the GM insider said.

Shreveport can build about 260,000 vehicles a year with two shifts, Wall said.

The H3 could continue Hummer's astronomical growth. The brand skyrocketed from a few hundred H1s a year to 19,581 in 2002 -- the year the H2 debuted -- and 35,259 total sales in 2003.

GM could sell 50,000 to 100,000 H3s annually, company vice chairman Bob Lutz said in a recent interview at the auto show.

"If I could wave my magic wand, I'd have the H3 right now," Lutz said of the H3T concept pickup last week. "Hummer is a brand that has way more potential."

GM will begin building the H3 SUV in the first quarter of 2005, an insider confirmed for the Free Press. Sales should begin by spring 2005.

"It's a two-edged sword," Hall said. "Making Hummer more affordable risks making it less exclusive. Exclusivity and image is very important to Hummer."

H2 prices start at $49,270, while the even larger H1 has a starting price of $106,185.

Hummer's exclusivity has led to basketball phenomenon LeBron James gaining national publicity when he got a Hummer H2 for his 18th birthday last year, but the massive SUV has also become the embodiment of wasteful conspicuous consumption to environmental groups and frugal individuals.

Antipathy toward the three-ton-plus H2 peaked last year when some radical groups began vandalizing Hummer dealerships.

Although considerably smaller than the H2, the H3 isn't likely to win the brand any fans among environmentalists.

"I don't think this is good news at all," said Brendan Bell, associate Washington representative for the Sierra Club. "Part of the expansion of the Hummer brand is so GM can bring in buyers and move them into H2s." The H2 gets less than 10 miles per gallon of gasoline when driven at 30 to 40 miles an hour on a hard surface, according to GM. The SUV is so large that it falls outside the bounds of the vehicles for which the Environmental Protection Agency certifies fuel economy.

The H3 will give Hummer's pricey lineup its first affordable, high-volume vehicle, kicking the fast-growing brand into high gear.

Hummer's rugged image, which derives largely from pictures of the military Humvee in combat zones, makes the vehicles extremely profitable. The H2 shares its basic structure, engine and many other components with the Chevrolet Tahoe SUV, but its base price is more than $14,000 higher.

H3 prices will probably start around $35,000, Wall said. That's more than double the Chevy Colorado's $16,200 starting price.

The rugged-looking H3T concept provides a clear hint at the styling of the H3 SUV. Key visual characteristics like the pronounced grille, big tires and short front and rear overhangs make the small pickup -- nearly 2 feet shorter than a Dodge Dakota -- immediately identifiable as a Hummer.

The H3 will be the first Hummer built at a General Motors plant. The H1 and H2 are assembled for GM by Indiana-based AM General Corp. AM General also makes the military's Humvee.


Contact MARK PHELAN at 313-222-6731 or phelan@freepress.com.

Article

Apparently the H2 will still have the distiction of a dedicated AMG plant, unlike the H3.

Brian
03 Pewter H2 Lux, Sunroof, Airaid filter/MIT, Nology Wires, Corsa Touring

Multiply 35,259 by the average H2 price of $56,000 and !!!WOW!!! $1,974,504,000 in sales.

This makes me sick.

R2

Front Locker, Stealth winch, 37" Super Swampers SSR,low center of gravity = Ultimate H2

We won`t be complaining aboot too many ricers on the road soon......

" S & B Member Since 2003 "

It makes me sick when GM talks about making the Hummer smaller, it's a Hummer they're supposed to be big!!!