Hummer dealers have had extreme highs and lows in the past year - kind of like one of their SUVs navigating a boulder-strewn off-road course.
They started 2003 with Hummer H2s still selling as fast as they hit the lots. Then by spring the early-adapter surge for the huge SUV had leveled off, and inventories increased.
But with the help of some incentives, "we got that worked out," dealer Ed Williamson of Miami says. Now Hummer dealers are waiting for the H2 SUT pickup, and eventually an H3. There's even talk of an H4.
Several issues remain, in Williamson's view. GM must continue to be flexible with dealers in setting deadlines for the specialized, Quonset hut-style stores it wants. And, he says, GM needs to move Hummer fully into its field and marketing organization.
Williamson, a member of the Hummer Dealer Advisory Board, talked with Staff Reporter Dave Guilford.
How was the past year for the Hummer franchise?
It's been wonderful from about every angle. Hummer retailers have been delighted with how well it's going. In general, General Motors has been pleased with our progress and with the Hummer marketing people in particular.
When it started, it had such a big pent-up demand for them. I mean, it's not every day that a GM dealer has somebody come and they don't care what the price is, they just want to know when they can get it. That lasted about nine months. There was such pressure from the dealer body back to GM to get as many out as fast as possible that they had that plant really ramped up. It looked like everybody pretty much ran through their waiting list about the end of March.
That was a crucial point, then?
Yeah. It's not like a water spigot where you can just reach over and turn down the supply. I ended up with about 175 or 180 on the ground, but I've got two points. But we got that worked out. They started turning the spigot back down. It doesn't always happen that way with every manufacturer.
How do you feel about what they're going to add to the brand - there's the H2 SUT, the H3 and talk about an H4. How much product is necessary for the dealers?
There's about 170 of us right now, and they're talking about maybe another 30 points. Two years from now, they'll have a total throughput with those three models of something in the neighborhood of 120,000 to 140,000 units per year. And 120,000 divided by 200 is 600. That's 50 new trucks a month, and if you do 50 used, it's a viable deal. Bigger guys like us, they're giving us numbers like 800, 900 a point. That works.
What about an H4?
I haven't talked to them about it very much. And they're not talking to us very much about this yet. I think there's two possibilities. One is a Jeep Wrangler kind of vehicle. But I think the other one - and this is just me - is a real pickup. Not an SUT, but a real pickup.
Yeah. And something that's very rugged, off-road. A decent price point. You're not going to displace the F-150, but it would be for the guys who really use them to work - the contractors themselves. I would imagine they're looking at that, but they haven't talked about it very much.
Can you explain how the Hummer council works? It's different from the traditional GM division dealer councils, isn't it?
In the General Motors nomenclature, if you are on one of those committees because you were elected or a substantial number is elected, it's called a dealer council. If everybody's appointed, it's a DAB - dealer advisory board. This is a DAB. It's just because there's so few dealers.
Another thing is, Hummer is and is not incorporated into what's known in GM as VSSM (vehicle sales, service and marketing), which is the field organization. But it will be. I started talking to John Smith (GM group vice president for vehicle sales, service and marketing) about this a year and a half ago.
I think Hummer should have been an adjunct to Cadillac to begin with. They lost a tremendous opportunity to leverage the Hummer brand into something that would have helped the rest of General Motors.
What would you say Hummer dealers' top priority is for 2004?
We certainly would like to see a very successful launch of the SUT. We, of course, want GM Hummer Division and AM General to be as profitable as possible. When the SUT comes, that'll make the plant more efficient, and any time you can get up to maximum line rate, run two shifts and all, that's the best you can do.
I think we'll see some innovations. There are some things on the SUT that I think will be on the H2 in a year or so. They've got a one-button, all-windows-down, all-windows-up button, and I hope we get that. It's those kinds of refinements. I would like to see the dashboard a little different - maybe a little more techy. I'd change the air-conditioning ducts.
What about the stores? GM apparently doesn't expect people to get into the big Quonset hut design until they get the H3.
I've never heard them exactly say that. What they did is they wanted them by Dec. 31, 2004. And then, within the last three or four months, after consulting with the DAB, they lengthened that out 90 days, but put an extra $25,000 bonus in if you make it by the end of December. I think what they're starting to realize is setting a date out there to do something like that is well and good, but it is very arbitrary.
I'm putting one of my stores in a very tony town. It's right across the street from my Cadillac store. Everybody agrees it is the absolute best place for us to go into. But the company that's coming out of there is going into a new space that won't be ready until April 2005.
Now, I spent the money. I've got $250,000 down, I've got a contract, and when it comes time that we can actually take possession, we're going to make a lot of things happen really fast up there. But am I going to make it by March 31, 2005? Impossible. Will it be a great facility? You bet.
Will it be the best location? The best location, in my opinion, would be to leave it in my showroom, but they're like a lot of these other new brands. They're hung up on their own buildings.
I suppose another big issue is getting the H3 to market?
Oh yeah. That's going to be really good. Not everybody out there can handle a 7,000-pound, $55,000 H2. I had to cut two inches off a couple beams in my carport just to get it in. There are several parking garages in all of our communities that you just can't get it into.
So the 3 will be a little more civilized in that regard?
It's going to be (GMC) Envoy size.
Have the dealers had enough influence on GM's decisions in the past?
It's pretty good right now. They really listen to Hummer dealers. And they've got the right guys on the committee. So I think we have a lot of influence.
Anything you can point to?
We got that drop-dead date on the building pushed back three months. Now we've got to do it again and again. That would not have happened if it hadn't been for some retailers talking about it. I hope we're going to have some impact on what H4 is, but we haven't really started talking about that yet. That's more than three years away.
How do you like the advertising?
I like the advertising a lot. Liz Vanzura (Hummer advertising director) is excellent. Liz really understands it. And the agency Modernista has a great team. It really portrays what that vehicle is.