Join Date: Jun 2001
Location: Catonsville, Md.
Is Hummer H1 on its way out?
From the Detroit Insider:
Is H1 on its way out?
Off-road icon may have outlived its utility
Brett Clanton / The Detroit News
General Motors Corp.'s Hummer H1 -- a tank-like SUV used by the U.S. military, sold to the public by GM, and reviled by environmentalists everywhere -- soon may be decommissioned.
While there is no decision yet, Hummer's new general manager, Martin Walsh, said in a few years, the slightly smaller H2 sport utility vehicle could replace the H1 as the brand's flagship model.
The H1, with fewer than 400 sales last year, is still "very important" to the brand's image as an off-road leader with iconic design, Walsh said.
"What we've found increasingly, though, is that the H2 has come to be seen by consumers as the Hummer. In their minds, that's more representative of the Hummer brand than the H1."
The comments come as Hummer is trying to broaden its appeal to consumers and as gas prices hover near $3 per gallon.
In less than 15 years on the U.S. auto market, the H1 has become a status symbol to the moneyed elite -- thanks to enthusiastic endorsements from Arnold Schwarzenegger and hip-hop artists -- and a gotta-have-it toy for hard-core off-roaders.
But its $140,000 price tag, poor fuel economy and massive size have made it impractical for many customers.
"People still like to come in and look at them, but no one buys them anymore," said Dan Frost, owner of Hummer dealerships in Detroit and Novi. "We might sell one, maybe two a year."
The H1 is based on the High Mobility Multipurpose Wheeled Vehicle, popularly known as the "Humvee," which was created by AM General Corp., a military contractor. It went on sale as a civilian vehicle in 1992, and was initially boosted by its exposure in the first Gulf War.
Seven years later, GM acquired exclusive ownership of the Hummer brand name, and in 2002 added the beefy H2. Last summer, the H3, a midsize SUV that achieves 20 miles per gallon, joined the lineup and now accounts for more than half of Hummer's annual sales.
In 2005, after a hurricane-fueled spike in gas prices, H1 sales fell 16 percent and H2 sales plummeted almost 30 percent -- a sign that the brand's biggest growth potential may rest in smaller, more fuel-efficient vehicles.
Walsh said Hummer would consider building a pickup truck, but would not -- as the Chrysler Group's Jeep brand recently started to do -- build car-based "crossover" vehicles.
The "product expansion" planned for the Hummer brand will be based only on rugged truck frames, he said.
Aside from adding a high-performance Alpha version last year, GM has done little to change the original H1, a vehicle it markets as "the most functional off-road vehicle ever made available to the civilian market."
Perhaps that's because the ailing automaker knows it cannot afford to throw money at a vehicle with such a small audience, said Erich Merkle, an industry analyst with IRN Inc. in Grand Rapids.
"There never really has been much of a market for that vehicle, except with the ostentatious crowd."
Hummer continues to require its dealers to accept at least one H1 a year, but with fuel economy becoming a bigger concern for consumers, it may get harder to sell a vehicle that gets 10 to 12 miles per gallon.
Yet Walsh left the door open to H1's future.
"It's still a part of our plan," he said. "Beyond that, I really can't say."