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Posted by: David Welch on October 08, 2009
General Motors it will unload its Hummer brand to China’s Sichuan Tengzhong Heavy Industrial Machinery. GM said on Oct. 9 that it agreed to sell the brand. The deal should be done by the end of the year. And good riddance.
Hummer started hot out of the gate when GM launched the H2 in 2002. Hummer enthusiasts loved the more suburban-appropriate SUV and the militaristic beast made GM a lot of money. But the company simply couldn’t afford to build more new models for the brand and didn’t have the cash to market what the brand had to sell. GM pumped up Hummer’s sales with the H3, but the first iteration of the truck was underpowered. By the time GM got a version with a bigger engine, Hummer had lost some of its buzz and fuel prices were on the rise. GM also arguably took Hummer too far downscale by putting the Hummer name on smaller vehicles when its core audience loved its audacious size, military image, and off-road capabilities.
The brand was another problem for GM. It came to be a lightning for environmentalists, who saw the SUV brand as further proof that Detroit didn’t get America’s new-found green attitude. The greening of America may be more hype than reality, but there’s no question that GM lost the technology and green mantle to Toyota after killing the EV1 electric car and then acquiring Hummer. Bloomberg News says that GM could get $150 million for the brand. Given GM’s cash needs, that money won’t go far. But getting Hummer out of the portfolio will help GM focus on its core brands. The company will also be better able to tell a green story with the Chevrolet Volt now that Hummer is on the way out.
Want the straight scoop on the auto industry? Detroit bureau chief David Welch , Dexter Roberts and Ian Rowley bring daily scoop, keen observations and provocative perspective on the auto business from around the globe. Read their take on such weighty issues as Detroit’s attempt at a comeback, Toyota’s quest for dominance and the search for an efficient car.