|
Administrator
GMHummerAdmin is
Offline
Join Date: Jan 2005
Posts: 722
|
Hummer Makers Look to New H3 to Boost Sales
It is the littlest Hummer, the 2006 H3 that goes on sale next month, that company officials expect to carry the biggest burden.
While the H3 still has the blockbuster Hummer shape, it is about 17 inches less in overall length, 6.5 inches narrower and 6 inches shorter in height than its massive siblings, the original, military-derived H1 and the H2, which was introduced in 2001.
The window sticker of the H3 is also smaller. While the price on the H1 starts at about $129,000 and the H2 sells for around $54,000, the H3 will start at $29,500, with the most expensive model being $37,490.
Hummer officials expect the H3's smaller, more maneuverable size, combined with the price, will make it the best-selling Hummer by quite a margin.
"The bread and butter vehicle for the brand is our H3," said Susan Docherty, the Hummer general manager, during an interview here at a media preview of the H3.
The H3 is based on extensively modified and upgraded mechanical components used on the Chevrolet Colorado pickup truck, which was engineered by General Motors Corp. and Isuzu Motors Ltd. and introduced last year.
During development, the emphasis was on the H3's ability to handle serious off-road chores, even at the expense of the handling and ride on pavement, Docherty said. Hummers are defined by their "iconic look" and "unparalleled" off-road ability, and the automaker can't afford to change that, she said.
"You have to stay true to the brand," she said. Other vehicles in the segment may be more comfortable on pavement, she acknowledged. "But I would argue that we made the right decision."
Unlike many sport utility vehicles, the H1 and H2 are capable of amazing off-road feats -- fording deep streams, climbing extraordinarily steep hills and churning through gigantic mud baths. But dealers would no doubt like to see many more Hummers simply crossing the showroom floor and heading to new homes.
Last year, Hummer sold 447 H1s, down almost 39 percent. Almost 29,000 H2s were sold, down about 16 percent. But Docherty insisted she is not worried.
The H1 is Hummer's Ferrari, she said, and will always sell in small numbers to wealthy customers. H2 sales are down because the initial demand greatly exceeded GM's expectations, she said. Now, sales have settled into the range GM always expected. The H2 was "never intended to be the bread and butter vehicle for the brand."
The H3 will make the Hummer available to many more consumers, and Docherty said sales of 50,000 a year seem possible. So far, 110,000 people have contacted GM through the Hummer Web site to ask for more information on the H3, she said.
International sales are also planned. The H3s sold in North America will be built at a GM plant in Shreveport, La. Late in 2006, a plant in South Africa will start producing H3s for sale in Europe, Africa and Asia.
If Hummer manages to sell 50,000 H3s a year, that would put the nameplate well ahead of another GM boutique brand, Saab, which sold only about 38,000 in 2004. All of those are tiny sales numbers, though. In 2004, about 182,000 people bought the Jeep Grand Cherokee, a major H3 competitor.
"This brand is not about volume," Docherty said. It is about attracting new customers to the GM family.
"Thus far, with H1 and H2, 60 percent of the buyers who buy a Hummer have never bought a General Motors product. They are younger, more affluent, better educated. What we need with H3 is to continue that trend."
One question facing all sport utilities is the impact of the increase in gasoline prices. Research by J.D. Power and Associates, the market research firm, found that a massive shift in buying habits is not likely until gasoline reaches at least $3 a gallon and stays there for a year.
However, there is one indication that fuel economy has already hurt the Hummer brand. Forty-seven percent of those who rejected a Hummer H2 last year did so because of its poor fuel economy, according to a Power "Escaped Shopper" study. Those consumers went on to buy another large sport utility, such as the GMC Yukon, that gets better fuel economy.
Docherty said Hummer's research shows gasoline prices are not a major factor to H1 and H2 owners because their household income is so great. But the fact that the H3 gets better fuel economy may be attractive to some less affluent consumers, she conceded.
Powered by a 3.5-liter, five-cylinder engine, the H3 will be rated at 16 miles per gallon in the city and 20 mpg on the highway with the manual transmission and 16 mpg city and 19 mpg highway with the four-speed automatic.
The H1 and H2 are so heavy that under government regulations automakers don't even have to post fuel economy figures, but both vehicles are regular targets of environmental groups. The American Council for an Energy-Efficient Economy recently cited the H2 as one of the "meanest" vehicles to the environment.
Docherty said Hummer owners "are concerned about the environment just like everybody else ... but they have made a choice that (this) is the kind of vehicle they want to drive."
Hummer also appears to be struggling with quality, according to Power. The researcher firm's 2004 Initial Quality Study, which measures problems during the first 90 days of ownership, put the Hummer brand (represented only by the H2) last.
The rating includes some items such as poor fuel economy that even a semi-conscious consumer might have expected before making the purchase. But there were other complaints such as rattles, squeaks, scratches on the paint and mirrors and the stereo not working, John Tews, a Power spokesman, wrote in an e-mail.
Docherty said they are working hard to correct the problems.
|
Hybrid Mode
