Should the deal between General Motors and Sichuan Tengzhong Heavy Industrial Machinery close on December 1, what is the first task at hand for the Hummer brand? Finding a supply base for its new up-and-coming models.
According to Automotive News, the pending deal between GM and Tengzhong has GM providing H3 production for approximately three years. After that, it’s carte blanche.
“Starting day one in the new company,” said Hummer CEO Jim Taylor, “we have to quickly decide: What is our manufacturing and supply solution when the GM contracts turn off? Do we take it in-house?"
Hummer could decide to renew its production contracts with GM for the H3 (Tengzhong isn’t purchasing the necessary tooling) and AM General for the H2. Of the two, the latter is most unlikely, as Hummer is increasingly looking to smaller vehicles for both fuel economy and marketing reasons.
“There's no way you can make those [2016 CAFE] numbers without changing the product portfolio,” Taylor said. By 2016, the average fuel economy of all vehicles sold by an automaker must average 35.5 mpg.
To address this issue, look for smaller Hummer products to come into the fold. As part of the sale, Tengzhong will receive all engineering and development work GM performed for the H4, shown in concept form as the HX at the 2008 Detroit auto show. An even smaller H5 model is also reportedly under development.
Taylor says the H4 could reach production in three years -- but at this point, it’s unknown where it (or the H5) will be built.
Source: Automotive News