HUMMER, no thank you, not interested ...!

[RubHer Yellow Ducky]

India | Wednesday, 20 August

"No, Thank you," India's Mahindra & Mahindra tells GM's Hummer



By Sandeep Singh



Posted 20 August 2008 @ 08:52 am GMT



India's largest utility vehicles maker, Mahindra & Mahindra said it is not interested in buying General Motor's (GM) iconic Hummer brand.

According to Anand Mahindra, vice chairman, Mahindra & Mahindra, the company is not interested in acquiring Hummer and is rather keen on pushing its own models into the key US market.

"I'd like to categorically state that we are not pursuing Hummer. We are pursuing our own models strategy and we do not want to tarnish our lean warrior strategy," Mahindra said.

Struggling with an economic downturn in the US, GM, which lost more than $51 billion over the past three years, said in June that it was reviewing the Hummer brand, putting the loss-making expensive oil guzzling vehicle on the block. Since then, the world's second largest automaker had reportedly held preliminary talks with China's sport utility vehicle (SUV) maker Hunan Changfeng Motor Co. and Russian billionaire Oleg Deripaska's car unit, Russian Machines but both had backed off, underlining the difficulty the US automaker is facing in offloading Hummer, whose US sales fell 40 percent in the first half of 2008.

News that GM plans to sell Hummer also evinced little interest from other Chinese automakers, including market leader and GM's China partner SAIC Motor Corp and number three Chinese automaker Dongfeng Motor Group Co, which makes cars with Honda Motor and Toyota Motor.

According to market analysts, besides present economic turmoil, GM' problems have been compounded due to high fuel prices.

"This is the worst possible time for GM to try to sell this asset," said Shelly Lombard, an analyst at corporate bond research firm Gimme Credit LLC. "This is an environment where people are kind of scared. They're looking forward for a very short period of time and not inclined to make big, expensive, going-against-the-grain bets."

"I'll be fascinated to see who ends up buying Hummer, if anyone. Hummer is not only far too expensive compared to similar off-roaders but also it is not practical buy especially with oil prices running near an all-time high. Given the state of the economy, the credit markets, and gas prices, it wouldn't be surprising to see GM forced to keep it," said Tom Van Praet, an analyst at investment firm Golden Taurus Financial.

"Fuel prices have changed buyers' attitudes," said Kevin Reale, automotive analyst at Endeca Technologies. "Unless someone is going to acquire it for military use, I just don't see it being a viable product line."

"I think it's going to be quite difficult" for GM to sell Hummer, said Joseph Phillippi, president of marketing research firm Auto Trends Consulting Inc. in Short Hills, N. J. "It gets really tough to see who might step up."

"Hummer needs a complete product overhaul," said Erich Merkle, automotive consultant at Crowe Chizek. "Then again, if you do a complete overhaul, you would take Hummer away from what defines it and makes it the brand that it is."

In a separate development, Mahindra, which lost out to rival Tata Motors in the race to buy Ford Motor Co.'s Land Rover and Jaguar earlier this year, said it plans to launch a small pickup truck and an eco-friendly fuel-efficient SUV in the US market during the second half of 2009.

Mahindra, which has forayed into India's two-wheeler market by buying Kinetic Motor last month, acquired 51 percent stake in a joint venture with Chinese tractor maker Jiangsu Yueda Yancheng Tractor Manufacturing Co. earlier this week, a move that is expected to make the Indian company become the No.1 tractor manufacturer in the world.