automotive

GM To Let Hummer Die As China Deal Falls Through

Hummer/GM

Hummer was set to be sold off to Sichuan Tengzhong Heavy Industrial Machinery, but General Motors on Wednesday said that will not be happening. Like its Pontiac and Saturn brands, Hummer is going away.

GM, which says Tengzhong was "unable to complete the acquisition of Hummer," will begin winding down the brand.

"One year ago, General Motors announced that we were going to divest Hummer, as part of focusing our efforts on Chevrolet, Buick, GMC and Cadillac going forward," said John Smith, GM and VP of corporate planning and alliances, in a release. "We have since considered a number of possibilities for Hummer along the way, and we are disappointed that the deal with Tengzhong could not be completed." The company says it will continue to honor warranties, while providing service support and spare parts to current owners around the world.

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Ironically, the GM marque gets the highest scores for a mass-market brand in the latest J.D. Power & Associates Consumer Service Index; in fact, GM has six of its brands in the top seven. Three of them, however, will soon be only a memory. Following Hummer in the rankings is soon-to-be-defunct Saturn, followed by Buick and Chevrolet. BMW's Mini brand takes fifth place. General Motors' Pontiac -- also in its final days -- is next, then GM's GMC truck brand.

Rounding out the top 10 mass brands are Ford and Hyundai. At the bottom are Nissan, Jeep, Mazda and Suzuki. The best improvers over last year in mass-market vehicles are Kia and Volkswagen.

In premium cars, Lexus for the second year comes out on top in customer satisfaction with dealer service, doing particularly well in service quality; service initiation; service advisor; and service facility factors. Lexus is followed, in order, by Cadillac, Jaguar, Acura, and BMW. Cadillac and Mercedes-Benz post the greatest improvements from 2009 among luxury brands, per J.D. Power.

The study, which ranks brands by consumer experience at retail, is based on responses from more than 114,200 owners and lessees of 2005 to 2009 model-year vehicles. Fielded between October and December last year, the study is based on dealership experience during a vehicle owner's warranty period, (usually the first three years). Parameters are service quality; service initiation; service advice; service facilities; and vehicle pick-up. The study shows that overall satisfaction with dealer service has increased across the board for the 10th consecutive year.

The bad news is that while automakers are seeing higher sales volume this year after slow sales in 2008 and 2009, auto dealers are looking at some slow years ahead if J.D. Power's predictions are accurate. The firm says dealers, who rely on vehicle-service business for revenue, will see big drops in service business following two slack sales years. The firm says 2013 will see the dealer-service market hit a low point caused by 20% worth of service business declines starting in 2009.

Jon Osborn, research director at Thousand Oaks, Calif.-based J.D. Power, says dealers have no choice but to focus on luring people to their service bays. "Over time, many vehicle owners gradually defect to non-dealer service facilities for repair and maintenance needs, particularly when the warranty period expires," he said, adding that dealerships must focus on not only providing superior levels of customer service, but on making service more convenient, and competitively priced versus non-dealer business, like Jiffy Lube.

4 comments about "GM To Let Hummer Die As China Deal Falls Through".
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  1. Leon Thomas from Flashy Trends, February 25, 2010 at 11:22 a.m.

    Seen as a vehicle of success, suddenly represented one of excess!

  2. Bruce Rowe from ViaSat Inc., February 25, 2010 at 11:38 a.m.

    What a shocker that a giant, gas guzzling vehicle wasn't a good long-term business. Hopefully Hummer owners feel as embarrassed as they should have when they bought them.

  3. Rajan Sharma from Self Employed, February 25, 2010 at 3:01 p.m.

    But I bet the Hummer brand will get resurrected someday, somehow. Just not till autos use fossil fuels...

  4. Dave Woodall from fiorano associates, February 25, 2010 at 3:14 p.m.

    Oh well......

    On a brighter note, I predict some enterprising company will begin making body kits to convert Chevy Silverado and Colorado/GMC Sierra and Canyon pick-ups into H2's and H3's respectively...which is what the H2 and H3 have been all along anyway.

    Hummer civilian vehicles...proof that one IS born every minute.

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