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GM targets 2009 Launch of New Hummer

DETROIT, Nov 8, 2006; Reuters reported that General Motors Corp. will likely launch a new Hummer truck in 2009, the head of the niche brand told Reuters on Wednesday.

"The new product will have unparalleled off-road capabilities," Hummer General Manager Martin Walsh said. "Like our current Hummers it would be recognizable from a distance."

The brand currently has two models: the H2 and H3. It stopped production of the H1 in June.

Earlier this year, GM's activist investor Kirk Kerkorian urged the automaker to consider spinning off Hummer, which began as a high-mobility vehicle for the U.S. military.

But GM executives have argued Hummer is key to its strategy as it tries to recover from a $10.6 billion 2005 loss, reverse a market share slide and return to profit in the U.S. market.

Global Hummer sales rose 54 percent in the first nine months of 2006, when overall GM sales fell 2.5 percent.

Walsh said the brand is "very successful" because 60 percent of Hummer buyers have never owned a GM vehicle before. "We bring them in from other brands, and then they stick within the GM family when picking their next vehicle," he said.

Hummer typically targets affluent people in their 40s. The median age for an H3 buyer is 44, and 43 for an H2 owner. The average household income for H3 owners is nearly $128,000 while the average H2 buyer's household earns close to $170,000. GM product chief Bob Lutz said earlier this year Hummer needs to add two or three more models.

OVERSEAS GROWTH

Hummer last month started producing H3s at a plant in South Africa, which will serve all markets outside North America.

Walsh said Hummer plans to launch the H3 in Australia and South Africa next year, and expects solid growth in Western European markets such as the UK, Germany, France, Italy and Spain over the next year.

Even as GM's sales of sport utility vehicles were hurt amid high gas prices earlier this year, Hummer sales remained strong through those months.

And despite the possibility of another rise in gas prices, Walsh said he does not see an immediate future for a hybrid version of any Hummer product.

"We don't really see hybrid technology as an ideal platform for Hummer because it does not allow the vehicle to demonstrate true off-road capabilities," Walsh said.

Yet he did say making flex-fuel capable Hummers, so they can run on gasoline or ethanol and gasoline blends, is part of the brand's future plans.