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Miss Case: Hummer

Thursday, December 1, 2011 ENTR200

Rebecca Gloff

on 11 March 2014

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Transcript of Miss Case: Hummer

Dihong Gao
Rebecca Gloff
Joe Harper
Geoff Tanner
Tori Thomas
What Went Wrong?
Target & Competitors
Double click to crop it if necessary
1999: Research revealed that doctors, CEO’s, and millionaires valued their individuality and like to stand out
Hummers were not as common, and were valued for their rugged individuality
(cc) photo by Metro Centric on Flickr
(cc) photo by Franco Folini on Flickr
(cc) photo by jimmyharris on Flickr
(cc) photo by Metro Centric on Flickr
Miss Case: Hummer
AM General began making military vehicles in 1983
Started creating civilian models with GM in 1992
1999 GM bought exclusive rights
First civilian Hummer was based on military Humvee
One of the few vehicles, which over 6,000 pounds, allowed owner to claim farm equipment tax credit with the IRS
H2 and H3 based on GM trucks, not military
Classified as a Class 3 truck but no
special license to drive
“Truth is, the Hummer is a symbol more than anything. It's all about image and attitude. It's purchased more for looks and brawn than practicality and purpose. So, if you're looking for another way to get noticed…the Hummer could be just what you've been waiting for.”

Turn of the millennium, people looked for bigger better things to show wealth, high value on tangible goods
Jeep Wrangler
Jeep Grand Cherokee
FJ Cruiser
Lexus LX470
Toyota Mega Cruiser
Lincoln Navigator
Lamborghini LM002 (1986-1993)
Geared for off road use
“The Hummer is a tiger offroad. The H1 can climb a 22-inch vertical wall, navigate a 60% grade, traverse a 40% grade side slope fully loaded (with nearly 3,500 pounds of payload), and operate in up to 30 inches of water. The H2 can climb a 16-inch vertical wall, navigate a 60% grade, traverse a 40% side slope, and operate in up to 30 inches of water.”
Poor engine speed is not a result of poor engine but design – it’s made for off roading!
Insurance is higher than most vehicles
Gas mileage is terrible
Narrow roads and parking – wide vehicle
Maintenance is high – need a specialist
Low resale value
Mostly made for off-roading, so otherwise a useless vehicle
Not much cargo space despite the size of the vehicle
Poor visibility if under six feet tall
Cramped interior
Slow “pick up and go”
Few colors
Due to massive weight, slow to stop in emergency situations
Lack of security features: child locks, side air bags, child seat, tethers
Sales peaked in 2006 with 71,524 units, then dropped 22% in 2007, then 47% in 2008, followed by 67% in 2009, with 9,046
Profits in 2006 peak: $45 million
By 2008 Hummer was costing GM money!
Trying to sell for the past 2 years at about $150 million
Used to be a success by the help of Arnold Schwarzenegger when he owned a fleet of Hummers, but is more recently described as prime example of the errors of the auto industry
Sale to Chinese industry, Tengzhong, was expected to develop more smaller, fuel efficient cars, but the government did not approve the purchase
3rd time since GM emerged from bankruptcy to shut down a company (Hummer, Saturn, SAAB, attempted Pontiac)

Only focuses now on Cadillac, Buick, Chevrolet
The Target market Hammer and its rivals fighting for
If I Were the founder...
Full transcript