Why did Hummer fail in America?

In the 1990s, Arnold Schwarzenegger, a popular Hollywood actor, requested U.S. defense contractor to sell him a military truck which was used in Iraq war by the American military. Hence came the Hummer brand. It soon became one of the most sought after vehicles by the celebrities and became deeply embedded in the 90s pop culture.

Hummer H1 2006

The Hummer was a very large, bold SUV that came in bright colors like yellow and green. These aspects attracted attention of buyers who were seeking something different and didn’t mind the attention. But then it was gone in 2009 when its parent company General Motors went bankrupt.


The popularity of Hummer was similar to Prius and Beetle. They were both extremely popular iconic cars, but with the passage of time their popularity faded. Hummer didn’t live long as it came and went in less than two decades, but a decade on after it was cancelled and its still a well known vehicle. It has really made a lasting impression.

Origin of Hummer

The SUV which everyone would come to know as Hummer actually began as the U.S. military’s High Mobility Multi-purposed Wheeled Vehicle or HMMWV. Since it was difficult to pronounce, soon it was nicknamed Humvee. This vehicle was made in 1981 by United States Defense contractor AM General. Its use by American military in the first Gulf war is what made it famous. The one which General Motors offered was not the same vehicle but it was based on it.

American Military HMMWV or Humvee

So, what actually led to Hummer’s creation? The story goes like this: Arnold Schwarzenegger was filming a movie in Oregon when he saw a convoy of Humvees pass by. It was love at first sight, soon he kept pestering the contractor AM General to sell him a Humvee. It was a repeated attempt by Arnold to get the vehicle. He said that he was so fascinated by this machine that he kept imagining driving it on the mountains and deserts. The contractor first refused to sell the vehicle to Arnold as it was not street legal. After this Arnold requested the contractor to make a civilian version based on Humvee. He actually went to AM General headquarters located in South Bend, Indiana, to convince them.

Launch of Hummer H1

AM General finally accepted the idea and made first civilian version of Humvee in 1992. They named it Hummer. Arnold was present at the unveiling of the SUV and actually drove one of the first vehicles that came out of the factory.

Hummer H1

By many aspects, Hummer eclipsed other passenger vehicles on the market at that time. The Hummer H1 had a whooping 16 inch ground clearance, not offered by any other SUV. For example, its ground clearance was nine inches higher than Jeep Wrangler Rubicon. It was also wide, as wide as the biggest semi-trucks that were street legal. This made H1 very stable and despite its height, resistant to rollover. They also improved the comfort which was suitable for leisure drive. But not everything was stripped out, it did retain some of the features found in the original Humvee. This was a very capable off-road machine, even though most people driving it wouldn’t take it off the road.

GM Takeover & Launch of H2

Hummer H2 2009

Hummer saw good success for a while. Later in 1999, the Hummer brand was bought by General Motors who then expanded the lineup and offered smaller models called H2 and H3. GM launched Hummer brand in a big way by 2002, their flagship product was H2 which was a smaller and more consumer friendly version of H1, it was actually built upon GM pickup truck.


Golden Days of Hummer

The timing of GM’s launch worked well for marketing as second Guld war was starting and it was all over the news. You could see Humvees storming Iraq on all news channels, which was kind of free advertising for Hummer. In 2001 GM sold 768 Hummers, in 2002, it jumped to 19,581 vehicles with the H2 launch and in 2003 it went up to 35,259 vehicles sold.

Hummer sales chart U.S. – 2000 to 2010

After some time it seemed like every celebrity have bought one. Arnold himself bought seven of them and kept them at the same time. Mike Tyson owned six. The demand for Hummer peaked in 2006 when 71,524 vehicles were purchased by American customers. These vehicles were off-road capable but most of the customers were buying it for the status symbol, for the appeal. For this reason it was popular in odd colors like yellow, blue, red and green. It had a very prominent road presence, very hard to ignore, so people who wanted to get noticed bought eyes closed. It was mainly a fashion statement.

Rising Fuel Prices

There was growing backlash against the truck which critics viewed as abhorrent gas guzzlers. Hummer H1 had 10 miles per gallon fuel consumption, and the smallest H3 had 14 miles per gallon. The critics viewed this vehicle as a symbol for wasteful American over-consumption and addiction to fuel, that too in a time when oil prices were at its peak around $140 per 1000 barrel (WTI). Its now $57 at the time of writing this article. America was also involved in wars in oil rich Middle Eastern countries at that time.

Crude Oil price chart 1992 to 2019

The activism against Hummer got so bad that there were multiple arson attacks against GM motors. At one dealership, Hummers were vandalized and someone wrote “Fat, lazy Americans” on SUVs parked at the dealership. In a separate attack, Clippinger Chevrolet dealership was set on fire. The flames destroyed about 20 vehicles, mostly Hummer H2s.

Fall of Hummer & GM Bankruptcy

Skyrocketing fuel prices and crippling economic recession put an end to the America’s taste for gas guzzlers. Hummer sales fell from 55,986 in 2007 to 27,485 in 2008 and a big drop to 9,046 in 2009. Hummer being one of the most fuel gulping SUVs of the world, it got hit hard by the fuel prices and recession. Suddenly, it became unfashionable and out of reach for many. Some owners felt like they are keeping a dinosaur in the midst of economic crisis. As the sales went off the cliff, they did try to introduce a smaller H3, but by that time, General Motors, its parent company, collapsed. The largest auto-manufacturer in the United States filed for bankruptcy in 2009. In the aftermath, GM terminated several of its brand including Hummer, Oldsmobile, Pontiac and Saab.

Toyota Tundra U.S. sales from 2000 to 2018

It was just a bad time for General Motors, in order to move forward, they had to unload Hummer. Even if you look at the pickup truck sales at that time, they too were in steep decline. So it was evident that demand for larger expensive vehicles have come to an end, at least temporarily. GM did try to sell Hummer to Chinese investors, but that deal did not mature.

SUVs in Fashion Again

Best selling 2019 Toyota RAV4

It is strange that, as the prices of fuel have fallen from an all time high in 2008, and as America got out of economic recession, customers have stormed back to buying SUVs and trucks. Today, although not Hummer size, SUVs make up nearly 50% of US auto sales. It reminds me of a popular dialog in TV series Battlestar Galactica; “All this has happened before, and all this will happen again”.

Revival of Hummer?

So, there are two reports that GM is considering bringing back the dead dinosaur and make it a part of its electric and hybrid SUVs. GM have not commented on these reports, but such a move can turn out to be positive for the company, military pedigree and fashion icon while keeping in line with the GM’s all electric future.

Arnold Schwarzenegger driving Hummer H1 on vegetable oil

Over the years, even Schwarzenegger has been seen piloting Hummers, running on alternative fuels. He says: “One of my Hummer has been turned into a hydrogen Hummer. And that, of course, emits no greenhouse gases at all. And the other Hummer has been turned into a biofuel Hummer and that one now emits 40 to 50 percent less greenhouse gases. So I think those are the kind of initiatives each individual of us can take.”

Reviving the Hummer could also be a relatively inexpensive way for GM to broaden its truck lineup at a time when Americans are scooping up pickups and sport utilities at an unprecedented rate. Several industry watchers have said the shift toward SUVs and trucks and this new car market is here to stay. If that is true, automakers are likely to keep trying to carve out new niches to distinguish themselves and squeeze higher margins out of each purchase. Big off-road ready vehicles are once again the order of the day. The longtime off-road favorite Jeep Wrangler has climbed from 84,615 units in 2008 to 240,042 units in 2018. And Jeep also added the gladiator pickup truck to its Wrangler lineup for the 2019 model year.

Jeep Wrangler sales chart for US – 1983 to 2018

While GM has off-road capable vehicles, it doesn’t really have one that directly replaced the Hummer, nor one that could directly compete with the Wrangler. Having a dedicated, off-road oriented brand could be a boon to GM and its ongoing war for truck and SUV dominance with its Detroit rivals. So I think that it does make sense from a manufacturer standpoint, but also it seems like the consumer base is there. I mean, how much hype was there around the Jeep Gladiator launch? I mean, tons. I mean, people are, you know, still very excited about that vehicle a year later. The gladiator is actually a revival of a pickup truck Jeep sold in the 1960s. In similar manner, Ford plans to revive the Bronco, another once popular SUV.

Conclusion

Toyota brought back its Supra sports car. Honda pulled the passport name out of its archives for a new SUV. When automakers reintroduced brands, they can take advantage of nostalgia while also saving money they would have to spend introducing customers to a totally new product. Even a brand is notorious as Hummer is still a recognized one. The Hummer was certainly a polarizing vehicle, but reviving it in this market is starting to look like a smart bet.

Contact the author: tejparker@wheelsjoint.com


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