Is Hummer GM’s golden ticket to profitability?

Unfortunately, we don’t see any Hummer model, current or future, putting up sales numbers comparable the Toyota Camry or Honda Accord. So what direction does GM’s portfolio need to move? According to Fortune columnist Alex Taylor III, General Motor’s needs to master the art of the small, profitable car, just as their foreign counterparts have.

With the recent announcement in Automotive News, and GM’s Vice Chairman Bob Lutz’s comments last September, we are certain that future models in Hummer’s lineup will be smaller. Critics of the shift say that compacting Hummer into smaller models will destroy what the brand is about. However, the brand has never been about size, but rather having iconic design, and unparalleled off-road ability.

We thought Hummer forgot about the latter with their advertising. How could we forget the nine commercials staring that bizarre magician that was dispelling myths about the H3. This was an interesting brand management technique, focusing more on what the H3 was not, rather than what it is. Although the ads were amusing, the overall effect on public perception was probably limited. Luckily, the newest Hummer H3 ads focus on its class-leading off-road abilities. “New Math” showcases H3’s vital stats (60% grade, 40% side slope, 24 inches of water) while “Sand” even shows an H3 getting air-born(For the record, we’ve found the Hummers perform best with at least one wheel on the ground!). Hummer realized they needed to have some ads focusing on off-road abilities, but so did Land Rover. New ads show the Land Rover LR3 traversing through flooded areas, on rocky slopes around a washed out road, etc. While searching for a link to the video, we found Land Rover was actually traveling to real disaster areas for filming, and received a lot of negative press for ‘exploiting disaster areas.’

Creative advertising is only one piece of the profitability puzzle. A company can have the most creative ads in the world, but without product quality and efficient and capable production, it’s relatively worthless. Luckily, Hummer as two of the above: Advertising and product quality. Let’s face it, with one factory in Indiana producing the H2, and one Louisiana factory producing the H3 along with several other GM trucks, the means to produce 400,000 Hummers doesn’t exist. But this is by design — Hummer is meant to be a niche vehicle line. Yes, the Hummer brand is ‘growing’ smaller and gaining wider appeal, but it won’t be the vehicle line that saves General Motors single handedly. Instead, GM will be relying heavily on vehicles like the redesigned 2008 Chevy Malibu and even the 2008 Cadillac CTS to increase profitability.