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What's $40,000, Weighs 5,000 Pounds, And Comes In One Color?


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WHAT'S $40,000, WEIGHS 5,000 POUNDS, AND COMES IN ONE COLOR?

On July 1, drivers along Los Angeles' Sunset Boulevard had better brace themselves. That's when Arnold Schwarzenegger plans to arrive at the premiere of his new movie, Terminator 2: Judgment Day, driving a High Mobility Multipurpose Wheeled Vehicle, better known to gulf war devotees as a Hummvee.

To the delight of weekend warriors everywhere, the versatile vehicle, used in the war to haul weapons and soldiers, isn't just for muscular thespians. Its manufacturer, AM General, is readying a civilian version of the Hummer to go on sale next year.

AM General, a subsidiary of LTV Corp., seems to have a modest hit on its hands. In the first two days after setting up a toll-free hot line in mid-June, the company fielded some 900 calls, from as far away as Singapore, from potential buyers and dealers. AM General will sell three models, ranging from a two-door canvas-top version for $40,500 to a four-door hardtop for $44,000.

NO AIR? Don't expect glitz for that price. Unlike the $43,000 Range Rover, which features walnut dashboards and all-leather interiors, Hummvees are no-frills. AM General has padded the seats and upgraded the heating system. But the South Bend (Ind.) company isn't sure about offering air conditioning. And you can have any color you want, as long as it's tan. Explains AM General President James A. Armour: "It's important to keep the vehicle very spartan, very rugged, very much like a military vehicle."

Since the Hummvee's lack of amenities may limit its appeal, AM General is proceeding cautiously with plans to commercialize. It won't take civilian orders until this fall and has set a limit of 1,000 Hummvees for delivery in June, 1992. With the vehicle's appeal to drivers who do off-road work, such as ranchers and construction contractors, Armour says the company, with annual sales of $510 million, could eventually sell as many as 5,000 nonmilitary Hummers a year.

That may be a tad optimistic, especially since postwar euphoria is already fading. Besides, based on price, if not amenities, the Hummer is a luxury vehicle, and U. S. luxury car sales are sinking fast. In 1990, sales of luxury sport-utility vehicles, such as the Jeep Grand Wagoneer, Range Rover, and Toyota Land Cruiser, plunged 24%, to 20,728, notes Wendy Beale Needham, an auto analyst at Smith Barney, Harris Upham & Co. The Grand Wagoneer is no longer in production, and Range Rover of North America Inc. expects its sales to fall 20% this year, to slightly more than 4,000.

The Hummer has some unique disadvantages as well. At 5,500 pounds, it weighs twice as much as comparable vehicles; at 85 inches, it's about a foot wider than the Ford Explorer pickup. Its bulk pulls down its fuel efficiency to a mere 13.5 miles per gallon of diesel fuel. And its acceleration is less than hair-raising: "To go from 0 to 60, you don't need a clock, you need a calendar," sniffs a Range Rover spokesman.

AM General sees little risk in its sortie onto the commercial battlefield, though. Its Mishawaka (Ind.) plant now is operating at less than one-third of capacity, and AM General as a whole is barely profitable. So even a little extra business can make a relatively large impact on the bottom line.

Nor is AM General abandoning its core market. The company is in the second year of a five-year contract to supply the U. S. Army with 33,000 Hummers. Military sales "will remain our No. 1 business," Armour says. But with plans to sell a few thousand Hummvees a year to civilians, AM General also may give road warriors something new to cheer about.Lois Therrien in Chicago


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