As Mark Phelan pointed out, GM would dearly love to unload the unloved HUMMER brand on some overseas sucker investor. The rumor mill is gristing the idea that India's Mahindra and Mahindra may scarf the tree hugger's least favorite vehicle of all time, ever. It seems only natural; the company's been building the AXE, a Humvee knockoff, for the Indian Army. Just-Auto cites an anonymous "senior official at M&M" who told them "Mahindra is very keen on acquiring the Hummer, because of many reasons, but I can't go into all of them but for one it is the most seen vehicle on TV in any country, these days at least the military version of it. It is still too early to talk of prices and timeframes but we are in the process of designing a civilian version of the Mahindra AXE and owning the vehicle it was modelled [sic] after would make a lot of sense." Not only that, HUMMER would give them a well-known premium brand to compete against rival Tata's recent Land Rover acquisition. Analysts think the HUMMER brand could put about $750m into GM's coffers. Or not.
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If the 750 million is just for the brand name I would say GM should jump upon the oppertunity.
GM can’t afford to do anything with Hummer right now themselves. They can’t introduce new models apart from badge engineered clones, and I seriously doubt they’ll be able to succesfully launch the Hummer brand in India/China themselves right now (which, together with Russia are probably the only places on earth left where there could be a market for Hummers), so loading it off to one of a small amount of parties who could might not be a bad idea.
Perhaps AM General will buy it back. Didn’t they sell just the brand name to GM? They build the H2 and built the H1. GM just builds the H3. AM General was just awarded a half billion dollar contract to build more military vehicles–they are flush with war profits.
JJ: They are building Hummers in Russia already. But there is a very limited market. Not every Russian is an oligarch.
Well, I did suggest this 2 weeks ago but was derided. Maybe people can’t accept that women might have a clue about the car industry……
I thought that Hummer was built for GM by AM General, and that with AMGen being a military supplier would not be for sale to a foreign company. (after posting, I see that factotum answered my question.)
Now if we’re strictly speaking about the Hummer name, copyrights and IP, no problem. It would probably be one of the better moves from them in recent history. GM would score some ‘green’ cred by cutting loose the ‘division’ as it were, but $750 million really doesn’t do a whole lot for the bottom line.
Actually the orgional H1 was designed by a lot of the same engineers who designed the Jeep Cherokee (XJ).
When Renault bought into Jeep/AMC the military contracting division had to be spun off.
Hummer still have value as a niche brand even after GM whipped the horse to death selling crappy cousins of the Tahoe as Hummers.
For an Indian automaker, this is definitely a smarter acquisition than Tata’s luxury marques.
why not?
let someone else burn cash for a change
Katie, you have way more than a clue in my book! Your insights and point of view are always appreciated. In case you don’t hear it often enough, thank you!
To the main point, Mahindra picking up Hummer makes sense. Mahindra continued making the old Jeeps under license until the mid 1990s and is a significant truck and tractor maker today. Just as Fiat flourished once out from under the GM umbrella it is possible that Mahindra could make something out of Hummer. Maybe they can pick up Saab as part of the deal since poor Saab needs someone with brains, money and drive to help them become relevant.
This article claims that Tata wants it, too: http://economictimes.indiatimes.com/Tata_MM_in_race_for_GMs_Hummer/rssarticleshow/3104546.cms
If this is the deal, then I suspect that AM General will be adding itself to the shopping list. The US military is seeking a replacement for the Humvee, so AM General’s own future is also uncertain, even without the expiration of its Hummer deal with GM.
Buying both AM General and the Hummer brand would give the buyer access to both military contracts and civilian sales, while AM General’s current owner would not be exposed to the potential loss of its US military business.
Half-scale Hummers or full sized monsters threading their way through New Dehli?
John Horner :
To the main point, Mahindra picking up Hummer makes sense. Mahindra continued making the old Jeeps under license until the mid 1990s and is a significant truck and tractor maker today. Just as Fiat flourished once out from under the GM umbrella it is possible that Mahindra could make something out of Hummer. Maybe they can pick up Saab as part of the deal since poor Saab needs someone with brains, money and drive to help them become relevant.
+1
For Mahindra it makes sense since they already manufacture models that are very similar to the original Jeep.
Hummers are right now seen everywhere: toys, t-shirts, watches, bicicles, TV, three huggers, internet, commie countries in the making (like mine), etc… It makes sense to have just such brand.
Fiat in fact flourished with GM money AFTER the breakup, and not because they got out. It was very bad before going into that umbrella, and I don’t know how the italians make a deal in which GM had to rather buy them completely or give them the same money to go away, but they’re sure smart. The Fiat Croma is made with a GM platform, although they didn’t use another one to build Alfas and Lancias.
Saab… damn, I wouldn’t like to see this brand disappear. Is there a place for quirkiness in this world?. I think yes, but maybe marketing studies prove me wrong.
I am afraid of the luck of the ones that are going under the Toyota umbrella when it becomes more powerful: Isuzu, Subaru, Daihatsu…
Stingray
I have hope for Subaru resiting the ToMoCo Borg.
With the painful exception of the Saabaru they were able to resist GM.
“I am afraid of the luck of the ones that are going under the Toyota umbrella when it becomes more powerful: Isuzu, Subaru, Daihatsu…”
Isuzu and Subaru certainly can’t be any worse off they they were when married to GM. Isuzu went from a strong second tier Japanese player to being completely GONE in the passenger car and light truck market. Subaru mostly stayed on their own except for the bastard child Saaburu.
Well, I did suggest this 2 weeks ago but was derided. Maybe people can’t accept that women might have a clue about the car industry……
Yes you did suggest it. I questioned it, and still do. M&M already knows how to make this type of vehicle, only more fuel efficient. The Indian army doesn’t need Hummer, and the civilian population of India certainly doesn’t – not in any large numbers.
Arguably, it would give M&M a foot in the door in NA, but they’d be better off bringing their own products up to US spec than spending money on Hummer. Even Bajaj’s little Ape clones were brought up to US spec for sale here, so it’s not like it’s a Hurculean task.
As RF has said in the past, never underestimate the mania for aquisition.
Hummer sort of reminds me of Avanti – there’s a small diehard market which will keep it around in very low volume forever. But is this a market worth having? And more to the point, aren’t there better ways to enter this (dwindling) market than buying Hummer?
@factotum
They are building Hummers in Russia already. But there is a very limited market. Not every Russian is an oligarch.
A lot of them are though. Moskow has more millionaires and billionaires than any other city in the world. Some 120000 millionaires live there, and more importantly, it’s Russia, so pc-ness doesn’t affect sales too much (yet).
If a company like Gemballa is able to sell batches of this to them Hummer must be able to sell one or two H2s to unsuspecting rich Russians…
Pch101, AM General cannot be sold to a foreign company if they wish to continue to sell any military products to the United States Military.
Or at least, that is how things used to work.
In today’s world, God only knows what’s going on…
AM General cannot be sold to a foreign company if they wish to continue to sell any military products to the United States Military.
The point that I was making earlier is that AM General’s relationship with the US military may be coming to a close. If the replacement for the Humvee goes to someone else, then AM General is going to be stuck between a rock (GM dumping their distribution and production agreement) and a hard place (the military choosing a different contractor.)
That would leave AM General stuck with a military vehicle for export in a high cost labor market, and an idle production line for civilian SUV’s that not many people want. If I was AM General’s owner, I’d be eager to sell it.