Hummer Shutdown – What Will Arnold Drive Now??

It’s hard to miss Hummer‘s distinctive and recognizable design traits once you see one on the road. The boxy, anti-aerodynamic, beast of a vehicle is recognized worldwide. Jean Halliday stated in an AdAge article today, "As recently as 2006 the truck was still seen by many consumers as a fun — even cool — ride, making regular appearances in Hollywood (notably on HBO’s “Entourage”) and at big sporting and red-carpet events." The Hummer was brought to life for the military and made publicly popular and sought-after by California governor Arnold Schwarzenegger. Although that was initially the most "rough around the edges" version of the Hummer, the H1, we quickly saw more civilian focused models arrive with the birth of the H2 and more recently the H3. The H2 was certainly a hit! Not only with high profile sports figures but also with the corporate world as well. CEO’s were now finding it cool own a vehicle that could scale mountains!

If you’ve ever driven one of these monsters they certainly do attract attention. With celebrities snatching these vehicles up, customizing them from top-to-bottom and many others following suit; demand for this brand was high. But, beginning in July of 2007 and most dramatically again in March of ’08, demand has fallen off like Big Brown’s Triple Crown hopes 1 minute into this weekend’s Belmont Stakes.

What is causing this dramatic loss in demand? For starters Hummer has always had its critics. Seen as a gas guzzling environmental killer the Hummer has been known to attract equally negative attention. In fact, a friend of mine recently traded in her H2 for a new ML 350 because of the guilt associated with all the negative attention. However, there is one quick conclusion on what has had the most impact — Yes, of course, the recent dramatic rise in gas prices!!!!

Source: DOE, Energy Information Administration

It’s no coincidence that as gas prices began to skyrocket this past March that we have seen the dramatic negative impact on demand of the Hummer. So much so that GM’s CEO Rick Wagoner recently announced the possibility of selling the Hummer brand and concentrating on the compact/fuel-efficient vehicle segment. The Hummer brand will be a hard sell to prospective buyers so long as gas prices remain high worldwide. So does this mean we will no longer see these vehicles on the road? Highly unlikely! There will always be people willing to pay a premium to seen in an attention grabbing hill climber, river fording vehicle like the Hummer, despite its perceived impact on the environment. Who knows though, perhaps we’ll see Arnold in a Prius!

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