HUMMER Brand to Define Tagline, Increase Advertising, Build H4 and H5

HUMMER has some big changes in the near future, and that means it’s CEO Jim Taylor has a very large to-do list. On that list are kick-starting HUMMER sales, spending big on advertising, defining the “Like Nothing Else,” tagline, and increasing HUMMER’s product portfolio to include smaller vehicles like the H4 and H5.

“All our plans have to be in place so as to be ready to fire Dec. 1,” Taylor told Automotive News. That’s the date he hopes to have approval from the U.S. and Chinese government to complete the sale of the HUMMER brand to Chinese manufacturer Tengzhong. According to Taylor, that process is expected to take around four to six weeks and 12/1 marks week 6. Naturally, there was a caveat that it could take longer.

Dealers are anxious for the deal to close, since the memory of GM’s unsuccessful attempt to sell Saturn to Penske Automotive group is still fresh in their mind. “The quicker this closes, the sooner we see a business plan, the happier we’ll be,” said Chistopher Leggio, president of a HUMMER dealer in Ontario, CA.

Once the deal is complete, Taylor says to top items on HUMMER’s to-do list are:

• Boost dealer inventory
• Change brand perception with aggressive marketing
• Increase global sales to 25,000 by 2010
• Develop a future product plan and find a manufacturer
• Make future products comply with CAFE rules

In the near-term, Taylor says that HUMMER needs to let the world know that, “We’re alive and well; we’re here; we’re open for business, and we’ve got product.” With production of H3 and H3T regular production starting earlier this month, dealers will soon see a much needed boost to their inventories.

To get that message out, Tengzhong has already agreed to “spend a lot of money upon closing,” according to Taylor, who declined to give an exact amount, though it’s been rumored that the long-term budget for the Chinese company to invest in HUMMER is between $800 million and $2 billion.

Taylor says that Tengzhong has agreed to an annual marketing budget similar in scope to HUMMER’s 2008 budget, which according to TNS Media Intelligence was just short of $70 million.

In 2010, Taylor’s goal will be to sell 25,000 HUMMER around the world, and expects 20,000 of those sales in the U.S., a significant increase over 2009, an admittedly tough year for the brand that’s future was in doubt for much of the year. Through October, 2009 U.S. HUMMER sales were at 8,500.

Defining “Like Nothing Else”

HUMMER will keep the tagline, but the definition will change. If it doesn’t, Taylor says the risk is you “use an old line, keep your old products, but the world changes and now you’re irrelevant.”

The risk of becoming irrelevant is the only reason HUMMER will be motivated to come up with new, smaller, more fuel-efficient vehicles. Government regulations have mandated that all light-vehicle manufacturers must have an average of 35.5 mpg by 2016, and as HUMMER separates itself from GM, that challenge becomes immense.

“There’s no way you can make those numbers without changing the product portfolio,” says Taylor.

New HUMMER Products

HUMMER’s soon-to-be new parent company Tengzhong has hired an Austrian engineering consultant to help HUMMER determine its “ultimate product plan.” Taylor says electric and hybrid powertrains will be used in the portfolio to meet the fuel-efficiency requirements.

Tengzhong will have access to the plans already drawn up by GM for the H4, a smaller vehicle based on the HX concept, which HUMMER hopes to release within three years.

Following the H4 will be an even smaller H5. Taylor says that the H4 and H5 will eventually make up the majority of sales, similar to shift from the H2 to the smaller H3.

The production location of all HUMMER models is up in the air after the current contracts with GM run out. Options include continuing to contract GM for the work, or taking manufacturing in-house.

HUMMERGuy’s Take

This all sounds like great news for the brand, though if the timeline on the H4 is really three years and expected to hit around 2011 or 2012, HUMMER may find out that its dealers and customers aren’t so patient. After all, three years from today is quite lengthy considering it was first revealed as a concept in 2007. If HUMMER is really trying to be leaner and faster, the H4 will be their chance to prove they can do it.

What about the H5? The HX concept is pretty small – two doors and four seats. Making a vehicle smaller than that would mean cutting the seating capacity down to two passengers – something there may not be much of a market for. That is unless the H4 is actually bigger than the HX concept (think four doors), and the H5 is actually closer to the HX concept with two doors and four seats.

In any event, HUMMER will need to release a vehicle very close to the HX concept soon, and do its best to decrease the three year lead-time on its release.

Source: Automotive News