Long thought to have a second chance at life after a Chinese company showed interest in purchasing the brand, Hummer is set to wind down and cease to exist after GM announced today that their deal would not move forward. GM originally bought the brand from AM General in 1999 and fleshed out a model lineup that was focused on large, military-inspired SUVs.
“One year ago, General Motors announced that we were going to divest HUMMER, as part of focusing our efforts on Chevrolet, Buick, GMC and Cadillac going forward. We have since considered a number of possibilities for HUMMER along the way, and we are disappointed that the deal with Tengzhong could not be completed,” said John Smith GM vice president of corporate planning and alliances. “GM will now work closely with HUMMER employees, dealers and suppliers to wind down the business in an orderly and responsible manner.”
Sichuan Tengzhong Heavy Industrial Machines Co., Ltd. was set to purchase the brand after discussions began in earnest last year. In October of 2009, the deal started taking shape, with GM set to continue to build the vehicles at their facilities through 2011 and netting a reported $150 million.
While many applauded GM for trying to get another brand off its books, Tengzhong wasn’t a perfect partner. It never made (or sold) consumer vehicles in the past and the deal had to clear regulatory hurdles in the U.S. and Canada.
Further, questions remained as to whether Hummer would be a brand worth keeping, GM or not. Certainly its success in the U.S. rode the wave of interest in SUVs, but market shifts pointed to a dismal future to a brand focused on larger vehicles and an image associated with a bigger-is-the-only-way.
“With only body-on-frame vehicles in their lineup, Hummer indeed faced an uphill battle in meeting increasingly stringent fuel economy and emissions regulations, not to mention the ever-looming specter of higher gas prices,” said Chris Paukert, Executive Editor of Autoblog.com. “Rightly or wrongly, Hummer had also been singled out by the media and the public as a poster child of conspicuous consumption, a once-popular movement that fell out of vogue even before the global economic crisis hit.
“Did the brand have a future? Possibly. Smaller, more efficient vehicles like Hummer HX concept suggested that the marque’s attributes could be successfully downsized, and technologies like clean diesel and hybrid powertrains could have mitigated the environmental impact of future models, but developing future generations would be very costly without a larger RD and manufacturing partner like GM.”
The last few years have not been kind to Hummer or its dealers. Hummer’s sales dropped off a cliff in recent years: 2008 saw a 50% drop in sales from 2007. 2009 was even worse: the brand’s 153 dealers pushed only 9,046 Hummers out to new customers in the entire year. Last month, the brand sold 265 vehicles in total. That’s less than 2 Hummers sold per dealership.
As of today, GM spokesperson Nick Richards told AOL Autos that 2521 Hummers remained on dealer lots.
Current and future Hummer owners will have their warranties upheld by GM through their full terms, just as the company did with Oldsmobile, Saturn and Pontiac during their wind-down periods. Hummer owners can contact GM at 1-800-732-5493 or on the web at http://www.hummer.com/hummerjsp/contact/email/index.jsp.