Hummer by GMC: A Compelling Revival for General Motors
The UAW negotiations are nearly complete and GM’s factory workers should be returning to work within the next week. While the new agreement between GM and the UAW will be adding employee benefits in take home pay and healthcare, talks have resurfaced of the return of GM’s Hummer brand with the announcement that GM will no longer be closing its Detroit-Hamtramck plant. Currently home to production of the Chevrolet Impala and Cadillac CT6, the Detroit Hamtramck plant is said to be the future home of GM’s upcoming electric pickup truck and unsaid “van or utility” vehicles. Reuters reported earlier this year that GM is considering a revival of the Hummer brand as an electric vehicle maker.
Sales of crossovers and SUVs have continued to grow while sedan sales have all but tanked over the past few years. While the EV movement is accelerating, it has become clear to manufacturers that the best way to accelerate development in the technology is not in making cheap, affordable models. After all, car makers are in the business to make money, not lose it, and EV technology is still expensive. Developing the technology and implementing it on higher end, luxury vehicles still allows a profit margin, where as economy cars leave little to no space, in most cases losing money, in today’s market for most manufacturers. GM has already committed to putting Cadillac at the front of its EV movement, but they still need to find other areas of the market for the effort to expand, and for sake of profits you can bet they want electric SUVs.
Hummer, once a popular vehicle brand in the early 2000s for its military vehicle inspiration, large proportions, and heavy duty capability, saw its demise when GM restructured following its bailout in 2009. Hummer never had baggage from the past, but simply was no longer needed as gas prices rose and the public demanded smaller, more fuel efficient vehicles. Fast forward to today, and people want these larger vehicles again with added capability and modern technology. Given that these vehicles were always rugged and athletic in styling, and still relevant for the market segments in demand today, the brand itself gives GM a big opportunity.
GM is making heavy efforts to develop platforms that can be used across a wide range of vehicle class sizes to save in development costs. For EVs, this is important given that the technology of batteries and powertrains can cost upwards of $30,000 in new vehicles. As with trucks in the past, a modern Hummer EV platform can be utilized for multiple models, saving money and providing opportunity for growth. A modern Hummer architecture could spawn upwards of 3 models, including a 2 and 4 door SUV and pickup truck. By properly pricing the vehicles into a higher end market, these models will make profits as they sell. Given how many luxury buyers want a vehicle that will stand out and make a statement, such models will be popular in California and other areas where luxury markets are present. Of course, these models don’t have to be luxury SUVs, but on higher trims they may be able to achieve the same status as GMC’s Denali vehicles.
Just as the Jeep Wrangler has become popular for its rugged looks, capability, and customization, Hummer will provide an all terrain vehicles brand for General Motors. Given that the Ford Bronco is soon to rejoin the market, there is no room for GM to jump into ICE adventure vehicles, but with EVs, Rivian is the only manufacturer currently moving into this headspace.
Another important point, EV architectures provide so much more interior volume than many ICE models, so Hummer’s don’t have to be as large as they use to, more so the size of the old H3. Regardless, GM could be poised to bring back a trademark that would find instant success and make profits while utilizing an easily modifiable architecture. As Bob Lutz said in his book “Car Guys vs Bean Counters” and on a recent Autoline After Hours, Hummer would be better off as a sub-brand within GMC for economic purposes. Given that GMC will inevitably still have ICE model for sales over the new decade, Hummer could help the brand shift into new areas with a new electric SUV and pickup truck.