General Motors will begin selling a new smaller Hummer sport-utility, the Hummer H2, in 2002.
AM General Corp., which sold the Hummer brand to GM in December, will assemble the vehicle at a new plant in Indiana next to its existing Hummer plant at the beginning of 2002. The factory will have a capacity of 40,000 vehicles per year.
The H2, based on GM's full-sized truck platform, will be very close to the H2 concept vehicle GM revealed Sunday, Jan. 9, at the Detroit auto show, said Ron Zarrella, president of GM North America.
GM has renamed the existing Hummer the Hummer H1 in preparation for a family of Hummer sport-utilities. Zarrella said the next addition to the Hummer family, possibly an H3, will likely be even smaller and less expensive than the upcoming H2, to reach a younger audience. He did not say when the third Hummer might appear.
'Hummer is an enormously strong brand with young people,' Zarrella said. But the price of the current Hummer puts it out of their reach, he said.
Zarrella, however, does not see the Hummer family ever achieving sales volumes comparable to Chevrolet's or Jeep's sport-utility lineups. Hummer 'will be more of a specialty brand,' he said.
Under the GM-AM General agreement, AM General will pay for the new H2 assembly plant and GM will pay AM General a manufacturing fee. GM and AM General officials would not estimate how much either company is investing in the project.
The deal, however, does not guarantee that AM General will build additional Hummer products, such as an H3, said AM General President Jim Armour.
In other Hummer news, Armour predicted the sales rate of the current Hummer H1 will soon double to about 2,400 per year. The increase will result from more marketing funds from GM as well as the introduction of a new 'slant-back' version of the H1, also unveiled Jan. 9.
Zarrella said Hummer will need a larger group of dealers to handle the growing Hummer lineup. But GM is still deciding how it will expand the Hummer dealer base. The company will have more Hummer-related announcements in the next several months, he said.