Last updated: June 3, 2009 9:30 am

What a Hummer

It was a bitter sweet moment for General Motors when it announced, a day after declaring bankruptcy, that it had found a Chinese buyer for its muscular Hummer brand. The undisclosed price – thought to be about $500m – is a mere speck in the financial black hole that GM has become, but the fate of the unique franchise may be instructive. While hardly a core marque, with about 0.5 per cent of the automaker’s North American sales last month, Hummer had become a symbol of ruggedness. Sadly, it never made the transition to mass-market success.

Hopes for Hummer were poor even when it went on the block almost a year ago. Demand for the vehicles was slumping, with crude oil just weeks shy of its record high and radical environmentalists having recently set fire to Hummer showrooms.

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The previously unknown Chinese firm that has bought the brand, Sichuan Tengzhong Heavy Industrial Machinery, will be the subject of a few punchlines but it may have the last laugh. Far more valuable than the designs or 220 global dealerships they are buying is a brand that has benefited from advertising that money cannot buy during Operation Desert Storm.

GM, which purchased the brand in 1999, eventually chose to shrink and dilute Hummer. Like today’s Jeeps, they now hardly resemble the military Humvees that inspired them. Buyers of the hulking, discontinued H1 were willing to pay $140,000 and today’s largest model, the H2, starts at $63,000 in spite of being based on the mass-market GMC Yukon. If the new owner can once again lure buyers who seek something unique – carbon footprints and pump prices be damned – it need not sell more Hummers than GM did at its peak a few years ago.

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