Hummer Taking on New Terrain

PARIS – General Motors Corp.’s Hummers are designed to tackle any terrain, and the brand is following the same path as it expands in small-car markets, prepares to launch global production, plans additional models and asserts its right to exist in the boardroom.

GM Vice Chairman-Global Product Development Bob Lutz is on hand here to celebrate the opening of a new Hummer dealership on the eve of the Paris auto show.

He promises more for the brand of off-road vehicles. “We need two to three more products for sufficient market coverage,” he says. “There will be more variants in the line and variants of existing ones. There will be something new for H2 and some all-new entries.”

The all-new products are expected to include a smaller SUV and a midsize pickup.

“It is clear, as the portfolio expands, we must expand to even smaller vehicle categories than the H3 (midsize SUV),” he tells reporters, referring to expectations of an H4. “The H3 still is a large vehicle in many parts of the world. We need a smaller and more fuel-efficient vehicle.”

Lutz says the H4 will not ride on a unique platform but will use parts from a variety of vehicles to create something new.

He does not see the brand going unibody, but says if gas prices continue to rise, he doesn’t want to rule out a unitized-body Hummer H5 or H6 if it makes sense and if the vehicle can continue to be the most capable in its segment.

Hummer H3 to begin production in Struandale, South Africa.

“Maybe we would trade off extreme capability for fuel economy, but it’s not a decision we have to make now,” he says.

AM General Corp. launched the Hummer line with the H1 in 1999, which served as the brand’s flagship until it was discontinued earlier this year.

It was followed by the fullsize H2 SUV in 2002. A sport/utility truck version was added in 2004.

Real volume did not accrue until the H3 launch last year. Lutz says Hummer has become the fastest-growing brand in the world, adding skepticism in the boardroom is in the past.

GM board member Jerry York earlier in the year called for the sale of the brand, and Lutz subsequently said York had been schooled and had a change of heart.

Lutz now says he was chastised for putting words in York’s mouth, but in the meantime, the brand is profitable and the subject of selling or closing any brands has not been raised. “I take that as a good sign,” he tells Ward’s.

Lutz also hints at a Hummer pickup to come. “We are mindful of the trend in pickups that seat many passengers,” he says, noting a Hummer pickup would have to seat at least four.

“We won’t water down the Hummer brand,” Lutz pledges. “You won’t see Chevy pickups badged as Hummers or see Hummer starved for product.”

With the H1 Alpha gone as the prestige performance icon, an H2 Alpha will fill the void as it becomes refined and reengineered in the future, Lutz says. He declines to give a timetable.

Martin Walsh, Hummer general manager, says there will be special-edition H2s to test customer acceptance of more capability both in powertrain and equipment.

Freshening existing product down the road includes looking into a diesel for North America (legislation permitting), a study of E85 (blend of gasoline and ethanol) capability and perhaps a hybrid-electric vehicle version.

Eventually, the H2 will migrate to a modified version of GM’s GMT900 fullsize truck platform, but not for at least a couple more model years, Walsh says.

About 300 dealers, including 173 in the U.S., now sell the Hummer in 34 countries, Walsh says. Europe has about 50 dealers, and there are a dozen or so in both Canada and Mexico.

Paul Chedid was the first in Europe to import a Hummer when he convinced AM General to let him sell the H1 in Paris 10 years ago. When GM took over the brand, he had to convince reluctant executives to export, with Chedid as the first independent licensee.

This week, Chedid celebrated the opening of his second Paris dealership, investing €3 million ($3.8 million) in the 2-story, 2,000-sq.-ft. (186-sq.-m) showroom with spiral staircases, wood balconies and a pool table. He has 14 dealerships in France and French territories and expects to sell about 500 units this year.

Beginning in the fourth quarter, distribution in Europe will be handled by a new division of Croyman’s Corp., known as Croyman’s Hummer Europe.

Managing Director Pieter Gabriels says he is building a network in 27 countries and wants 70 partners in the next couple years.

Walsh says Croyman’s, which also handles Cadillac and Corvette distribution in Europe, will oversee export shipment of the new homologated H3 from Struandale, South Africa.

GM stopped building H3s for Europe at its Shreveport, LA, plant in June, after stockpiling inventory for the market until the South African-built H3s start production in two weeks. They start shipping to Europe in January.

Right-hand-drive versions will come n mid-2007, followed by models powered by a direct-injection turbodiesel.

Walsh says Croyman’s will help regulate volume and have inventory for dealers who can’t stock enough models. The idea is to eliminate the feast-or-famine ordering that dealers new to the brand often experience in the learning curve, he says.

Homologated vehicles will be built to the strictest European standards, and the other markets (Middle East, Africa, Asia/Pacific) will reap the benefits. Hummer will enter the Australian market in the ’08 model year.

The new H3s will arrive here with more rounded lines to comply with the European Union’s strict pedestrian safety requirements. Among other changes to meet new safety mandates are headlamps, knee bolsters, extra reflectors and a hard spare-tire cover in the back.

[email protected]