GM

GMC launches production Hummer SUV

GMC launched production of its second all-electric vehicle, the Hummer EV SUV, at its Factory Zero factory in Detroit on Monday - but that may be small comfort for those who have already placed orders, as brand boss, Duncan Aldred said it could be until sometime in 2024 before GMC can meet initial bookings.

Like the rest of General Motors, the light truck brand is moving from internal combustion engines to battery-electric powertrain technology and is preparing a third model, the Sierra EV pickup, to enter production in a year's time. GMC is working on several more all-electric models, Aldred confirmed, although he declined to identify what's coming next - or when.

GMC is also "assessing interest" in overseas markets, in particular China. But while the response has been positive, Aldred said a final decision has yet to be made on bringing the electric truck range to the world's largest EV market.

Long Waitlist for Hummer EVs...In a year when GMC achieved record market share and highest transaction prices ever, the Hummer was one of its great success stories, Aldred said during a press conference. press release on Monday. The automaker received 90,000 advance orders for the two EVs when it cut orders last year. Even so, "that takes us to 23, really to 2024," before all those customers can take delivery, he said.

When the order bench closed, the original Hummer EV pickup made up about 60% of advance bookings, although he suggested that should level out in the longer term. But GMC has yet to decide when to reopen the Hummer order bench.

Like the pickup truck, the new model will initially be sold in fully loaded Edition One form, at $105,595 for the SUV. But less expensive variants will start rolling out later this year. The first Hummer EV SUV sold for $500,000 during a charity event at the Barrett-Jackson Auction in Scottsdale, Arizona over the weekend.

Really high expectations...Aldred said he also has "very high expectations" for the Sierra EV once it launches next year. That optimism could be boosted by strong demand for the F-150 Lightning from rival Ford Motor Co.

That automaker has so far registered more than 250,000 advance orders, and officials recently said they will also need until at least 2024 to fill that backlog. Ford initially set up a dedicated EV factory in Dearborn, Michigan to produce 25,000 Lightnings annually. It is now expanding that operation to handle up to 150,000 a year.

There's significant "flexibility" at the Factory Zero plant in Detroit, Aldred said, but the facility also has to handle a number of other EVs that GM is bringing to market. This includes the Chevrolet Silverado EV that will go into production this quarter.

Future EV plans...Asked by TheDetroitBureau about future EV plans, Aldred said GMC is in line with the strategy of its parent, General Motors CEO Mary Barra, outlining a "pathway to a fully electric".

But it will take longer for some products to emerge, given their “use case,” warned Aldred. Heavy trucks, he said, “will be among, if not the last to go (electric).”

Right now, EVs remain a fractional player in the US market – although their collective market share grew from just 1% in 2019 to 5% last year. But gasoline and diesel products will remain the dominant part of the GMC lineup for some time to come.

Creating a Unique Niche...The brand itself has long been a niche, marketing more upscale versions of the SUVs and pickup trucks sold by General Motors' Chevy brand. But it has been carving out a more distinct identity since British-born Aldred was appointed general manager of GMC and sister brand Buick in 2010.

Among the major moves, GMC has released two distinct sub-brands, the highline Denali and the off-road ATX. And they've recently introduced even more exclusive packages, Denali Ultimate and ATX4.

Denali and ATX accounted for 46% of GMC's US sales last year, attracting a younger, wealthier customer who "want it all," Aldred said. That helped push the brand's average transaction price to $59,111 last year. Vehicles with the Denali badge had the third-highest transaction price in the industry at $76,392, according to industry data, leading several luxury brands such as BMW and Jaguar-Land Rover.

A good year – for the most part...While 2022 was a relatively good year for GMC, Aldred recognized that it could have been better. Like the rest of the industry, it struggled to cope with shortages of semiconductors and other key components that limited production and, in turn, sales.

“Things are much better now”, said the executive, “but we are not (at home) free”.

Having more semiconductors will be particularly helpful in finally starting to ramp up Hummer production, as both models rely heavily on digital technology.

Overseas Opportunities...More broadly, increasing production could help GMC's broader expansion plans. The brand has a modest presence abroad and has seen demand grow by 28% in Mexico in 2022 and 17% in the Middle East.

Now, it's looking at other opportunities, among other things getting ready to launch in South Korea this year. China could follow with the Hummer. But the only challenge for GMC is the size of its light truck products, which makes it difficult to increase demand in many parts of the world.

by: Paul A. Eisenstein, Detroit-USA