Shut down of Hummer Brand
The recession had a tremendous on many products. The recession has pushed many products further to the point of shutdown among the Hummer brand which will be shutdown.
To see image of a Hummer vehicle: http://rw-3.com/wp-content/uploads/2009/02/hummer.jpg
According to CNNMoney.com, General Motors' deal to sell its Hummer brand to a Chinese automaker fell through Wednesday and the company said it now plans to shutdown the brand.
The large SUV brand is based on the Humvee military vehicle. It was always a niche vehicle but its image and sales were hit particularly hard by rising gasoline prices earlier this decade. Last year, GM only sold 9,046 Hummers, down 67% in 2008.
Hummer is the third largest brand that GM is being forced to shut down as part of its bankruptcy reorganization last year.
Chinese automakers have shown interest in buying established western brands as companies there strive to become more global players.
Why do you think are some of the possible effects of the shutdown of Hummer? Other than the rising gas prices what do you think are the other reasons why Hummer reached shut down point? Do you think that GM is losing out in the competitive market?
Saturday, February 27, 2010
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I think that the shutdown of Hummer shows that the demand for smaller and more fuel efficient cars is rising as gases prices continue to increase. The cost of keeping a Hummer is simply becoming to large to be worth it. There are other cars of equal sixe which can get far better gas mileage now and Hummer can no longer compete. I don't believe that GM is failing in the competative market, although it is going to have to get rid of brands (like Hummer) which people are no longer willing to buy and create new cars that are more in demand.
ReplyDeleteI agree with Preston here. People now-a-days are trying to save as much money as they possibly can. Buying a Hummer during these hard economic times just doesn't make much sense because they are so expensive to keep running. People are much more interested in vehicles that are more fuel efficient and save them money. A
ReplyDeleteI think its a actually a good sign that GM shut down its Hummer brand. While obviously negative in the fact that jobs were undoubtedly lost in the process, shutting down Hummer is indicative of GM's finally having realized that their policy of over-reliance on large SUVs is no longer economically viable. Freed of some of their money-losing SUV brands, hopefully GM will now be able to once again return to profitability, which is good, because as taxpaying (or soon to be taxpaying) Americans, we now own a substantial stake the company.
ReplyDeleteI definitely agree with Ryan's comment. Given the government's new role in GM, efforts should be made to cut loose the failing models to increase competitiveness. For the last decade, the American auto industry has artificially inflated the demand for unwieldy SUVs, exploiting the insecure public's need for a tank of a vehicle. As gas prices rose and demand tapered off, the American companies chose not to lower supply; since the vehicles have even less demand outside the U.S., export of the surplus wasn't an option.
ReplyDeleteBut to get back to government involvement in GM, I think that a government-run/directed competitor in an industry can do spectacular things. I'm not saying that the nationalized company is inherently better, but that it may be able to push for innovation by itself, forcing the private industry to advance as well. Because of lobbying by the auto and oil industries, the government has ensured that fuel economy requirements stagnate, allowing American car companies to engage in business practices that were noncompetitive in the long-run. Now, with cars like the Chevy Volt, American auto makers will finally feel pressure from the domestic market to invest in research and development more than just marketing.
In my (pretty strongly disgusted) opinion - Hummers are gas-guzzling, gaudy, and overly assertive vehicles. One thing about a recession is that it has the ability to shut out un-necessary things from the playing field. (E)
ReplyDeleteFunny you mentioned this, just yesterday I was driving around with a friend and happened to see an old classic original Hummer and realized we don't see those anymore compared to when it was the thing to get.
ReplyDeleteWe figured it was because of gas prices and how consumers want a more fuel efficient car, which is why Tayota and Honda are increasing sales (well Honda at least). Hummer's just eat gas like it's its profession.
I agree with the overall theme of everyone's comments that people are focusing on purchasing more fuel efficient vehicles. With the price of gas every changing you don't know whether it will cost you $75 or $100 to fill up your SUV tank. As the article said, Hummer was a niche vehicle so the market was never as large as any of the other vehicle markets. On account of this, I feel that Hummer was doomed from the start because of it's limited market and low efficiency. E, A
ReplyDeleteI agree that everyone is trying to save money and having to spend 30 dollars less on every tank of gas when you fill up adds up tremendously. When i went out to the west coast last year, all of the cars are small and not suvs or even gm/ford/chrysler, all the cars over there are foreign because of how much better they are. It isn't surprising to see hummer have to be shutdown.
ReplyDeleteI have always hated Hummers. When I was a more immature person (in middle school) I used to put my chewed gum on the back of the handles of parked Hummers. Part of me wishes that this was a socially acceptable thing to do. Hummers destroy the environment as well as people. They are a dangerous vehicle through and through. In collisions they protect the occupants, but the increased rate of injury to the people the car hits is greater than the protection it grants to the occupants. Plus, they tip easily.
ReplyDelete