Here’s why BrandlandUSA thinks it isn’t such a bad idea for GM jettison the brand. Because General Motors spent millions on a crazy scheme to build up Hummer around the same time that it killed off Oldsmobile, a brand which in 2001 was selling over 233,000 cars a year! As Rowland Netherway said in the Waco Tribune:
The recent GM decision indicates that the company doesn’t have an automotive philosophy or plan for the future as much as it reacts to the reaction of consumers.
Perhaps that’s the way it should be except Toyota, Honda and a few other foreign competitors appear to build cars based on long-range plans.
Toyota first introduced its fuel-efficient Prius hybrid in 1997, the year before GM bought the Hummer brand from AM General. That didn’t seem to bother anyone at GM until fuel prices rose to the point that motorists began looking for vehicles more fuel-efficient than some GM models that got no more than 10 mpg in city driving.
In 2004, soon after General Motors put out the last, tinny Olds Alero, GM announced it would put another few billion more into Saturn, making them just up market from Chevrolet. Two years later, it would announce that it would end production of the first generation Hummer. (H2 and H3 would continue). With that admission was a BIG surprise—the original Hummer was only selling a few hundred cars a year!
The question begs. Why would GM kill a division that sold hundreds of thousands of cars a year, but be content to have a division that only sold a few thousand for all these years? It’s simple really. To GM, Oldsmobile drivers did not have value. They were not hip. They were not young. They were not edgy. They were not on steroids like Hummer. These consumers did not think that it was amusing to have a car named after a sexual act. And so those consumers, taken for granted, were driven to other brands for sensible people. Like Toyota.
Hummer was made under contract to GM by AM General, the company that developed the Humvee for the Pentagon. AM General, which was the last remnant of Willys Jeep, could do small production runs. GM should have sold a few thousand Humvees at GMC dealers, and leave it at that.
Olds is now hip
When a company kills off the brand entirely, it can, in history, proclaim that the market for the Olds disappeared, and say that it was responding to market forces, instead of the obvious, that the consumer was not buying the unfulfilled promises made by General Motors. But the last laugh is on the consumer, for only a year after the last Oldsmobiles were sold from Oldsmobile dealers, they began to be seen as hip by the sort of young street kids inspired by Pimp My Ride on MTV.
These are the sort of folks that GM thought would be amused by the Hummer. But they want a old Oldsmobile instead!
In the case of Hummer it is true that the market for the elephant disappeared. But there is a more painful admission in the case of the Hummer. The market was NEVER there for a mass market Hummer. In the case of Hummer, GM valued market research over facts. Market research said that there was a market for the Hummer. Reality said that GM was ACTUALLY selling over 200,000 Oldsmobiles a year.
Humvee still lives
And another reason BrandlandUSA isn’t sad. The Humvee, actually known as the (HMMWV, or High Mobility Multipurpose Wheeled Vehicle) will still remain in production for defense use by AM General. (GM also says it might sell the brand, though we wonder who would be interested, though there is certainly a small market for it.) AM General is one of the coolest companies around, a successor to Willys Jeep, and all those other brands. See a great history on company’s website at AM General.