Hummer H3 Debuts

Hummer H3 Debuts
Honey, I shrunk the Hummer

Smaller SUV cheaper, more efficient October 27, 2004


Like it or not, Hummer is about to get bigger by getting smaller.

General Motors Corp. has major plans for the brand of rugged off-roaders, and they start today with the unveiling of the H3, a smaller SUV intended to attract new buyers when it goes on sale next spring.

Nearly 3 inches shorter than a Honda Accord sedan -- but more than 50 percent heavier -- the H3 is the first step in a plan to make Hummer a global luxury brand. GM hasn't announced prices for the midsize SUV, but expect stickers to start around $35,000, a very profitable step up from the Chevrolet Colorado pickup, which provides the H3's basic structure and many of its major components.

Hummer may be the most polarizing brand the auto industry has ever known, dividing people as starkly as Bush vs. Kerry.

Hummer-haters think the SUVs are conspicuous consumption at its most flagrant. They disapprove of the fuel-gulping big-box buses with a fervor so fevered that there's an entire Web site devoted to photos of people making obscene gestures at Hummers.

Hummer-huggers don't get that at all.

The H2 makes them feel secure and special. From its ability to wade through 20 inches of standing water to its unsurpassed off-road performance, they believe their Hummer will never leave them stranded and they're happy to pay the $52,000 to $60,000 sticker price and the daunting fuel bills.

There's also the boys-and-their-toys factor.

The H2 is the consummate combination of a Tonka toy and Army games. It's the perfect present for the man who has everything to give himself.

But GM figures there are only 25,000 to 30,000 people a year who will shell out the big bucks for an H2.

The H3 is the first step in a long-term plan to boost Hummer sales well beyond that level. GM believes Hummer can become a global brand like Land Rover or Jeep, and it's going to get a much broader product line to achieve that. Hummer only sells a handful of vehicles outside North America today.

Americans buy 1.7 million midsize SUVs a year, a number that continues to rise, despite high fuel prices. That's more than 10 times the sales of luxury SUVs like the H2.

"We're going to reach customers who aspired to Hummer, but the price was not within their reach," said Susan Docherty, Hummer's general manager. The H3 should roughly double the H2's fuel economy, using GM's 220-horsepower inline 5-cylinder engine to achieve what the company calls "peak fuel economy" of 20 miles per gallon. As the ads say, your mileage may vary, and you can rest assured it will be considerably lower than that best-case prediction.

The H2 got off to a blazing start with 18,861 sales in just six months of 2002 sales and 34,529 in 2003. That compares to around 700 sales a year for the $100,000-plus military derived H1. The H1, a modified version of the U.S. armed forces' Humvee, is a dreadfully impractical vehicle for anything but military or construction use. However its ultra-macho looks and incredible toughness won it a small but devoted following among celebrities and wealthy wannabes. GM cashed in on that image with the comfortable and sophisticated H2, which debuted in mid-2002.

After the hot start, Hummer began to run out of steam earlier this year, and sales fell 20 percent to 20,284 in the first nine months of 2004. GM always figured it would sell 25,000 to 30,000 H2s a year, Docherty said. It was more than happy to build more when the brand was hotter than a $2 pistol, but there's a plan to manage Hummer for long-term sales, she said. The new $52,825 H2 SUT, which features a minuscule pickup bed, restored some sales momentum when it hit the market recently.

GM values Hummer not just because the brand allows it to slap a huge markup on vehicles that started out as humble pickups, but because it attracts buyers who would never set foot in a GM dealership otherwise, she said. Even as sales fell this year, Hummer's appeal remained strong enough that the brand sat out GM's costliest fire-sale incentive programs. Hummer now offers a very low $500 cash incentive on the 2005 H2.

Hummer's image is defined by boxy looks and extreme capability, Docherty said. Once the H3 begins rolling out of the assembly plant in Shreveport, La., she'll begin applying that formula to other models.

"There are lots of market segments where Hummer's iconic design and best-in-class off-road capability is viable," she said.

The likely next step is an H3 pickup, which probably would look a lot like the H3T concept vehicle from the 2004 North American International Auto Show in Detroit.

However, she promises that Hummer will never be reduced to a recognizable grille that GM slaps willy-nilly on a brace of vehicles.

"There are lots things, particularly car-based vehicles, that would violate the brand's integrity," Docherty said, ruling out abominations like a Hummer minivan or compact car. "We don't want growth at all costs. You can't stretch the brand from $100,000 to $10,000."

No matter what, the Hummer is here for the long haul, soon to be delighting its owners and infuriating its detractors in new neighborhoods around the world.

Contact MARK PHELAN at 313-222-6731 or