Price increase?

[Tiger Bait]

There has been speculation that there will be a diesel option available for 2004. $7000 does sound like a reasonable price for that option (it's about 5K on the pickup truck with another $2.5 K for the allison transmission upgrade, I think). I doubt that they would stop production on gas models since in some areas of the country there is a 3 or more month backlog of orders already in the pipe. just my thoughts. [img]/infopop/emoticons/icon_confused.gif[/img]

[Steve R]

It's like trying to guess the stock market..nobody has a crystal ball. My thoughts parallel Heehaws...but that's mostly based on having seen behind the curtain at Hummer's marketing research & development: Price is heading up.

Keeping it simple and implementing typical marketing strategies...the first "wave" of consumers on a new concept are referred to as "innovators". We are innovators: we are willing to pay a premium, take a risk and economically speaking allocate a greater degree of marginal utility towards the aquisition of this good.

(Like....oh my God....in the midst of bong-resin, barley, rye & hops...it would seem some of my college education stuck with me!!??)

Bottom line, GM could have easily taken advantage of our willingness to blow coin in order to get into these bad-ass toys. A typical marketing ploy would be to release these things at $58K and sell as many up until demand slowed....THEN, GM starts offering their oh-so-typical "incentives & rebates" to cheapen the price and bring the next wave of purchasers to the table.

So what happened? I spoke with some Hummer-boys, and what happened was a gross under-estimation of what is now regarded as a sales phenomena. The H2 is a hit well beyond their expectations. They only asked a reasonable price HOPING these things would find a market. When pricing it never occurred to them "How much will people be willing to pay for a Hummer made practical for daily use"...instead they figured what a reasonable mark-up would be and gave it their best shot to get this thing in garages.

I've said it before: some body changes, some interior upgrades, a bigger engine...and through "innovation & improvments" the new H2's will be soaring just under the Range Rover price. And ya know what...they'll sell 'em all!

[Steve 2]

A friend went to a dealer and they told him there will be a $7000 price increase shortly and that they will be producing only diesels for a few months. Has any one heard the same rumors?

[BKLYNH2]

Its very interesting to hear the different "stories" everyone has heard from car salesmen. I think everyone should post their experiences for well being of future H2 owners. I had several while shopping for ours. Overall I feel that dealers are partially fabricating demand. One dealer we went to couldn't stop telling us how much over sticker he was getting and how he could not promise to get anyone an H2 within 12 weeks for no amount of money. I saw the same H2 on his lot for three weeks, and this was in September. It could even still be there. I made it clear that we were not paying over list and he could call us if things changed. He called today. For a while I think they embellished the demand to weed out those that they could find to spend the extra five grand, and if that meant the car sat on the lot for three weeks it was worth it for the extra cash. One of the more useful tools I found while searching for my H2 was the gmbuypower.com website. At this site you could see almost every dealers inventory. This gave a good idea which dealers were getting the most cars and how long they were around for.
I think the present price is appropriate. It's a bit more than most other large SUV's(American made), not as lux inside as some but definitley a lot more performance.

[cognitive]

I don't think the price of the H2 will go up. I do think however that the 2004 model will have two base models. One will be much like the current H2 and the second will be the one we keep hearing about with the higher quality interior and higher HP engine. The lower end model will appeal to the current market. If it didn't exist, Hummer would basically alienate a huge market. Remember that the Escalade is really the only competition for Hummer and it's priced slightly higher than the H2. They do know that they can push the cost up and many people will still buy them. The higher end model will fulfill this purpose. It will compete slightly more with the Mercedes - the ones who want the glitz and will pay almost anything for it.

The current market availability of H2's is pretty much fabricated. GM had high goals for selling the truck and I think we're starting to see the desperation to meet the goal. There's pretty good evidence of this. The dealers are alotted a certain number of trucks to put on their lot as well as to custom order. Well, if you haven't noticed, many of those on the lot are sitting there for awhile. They are NOT flying off the lot. The dealers will lie about this to get you to place an order. They will lie about the ones on the lot that are 'sold'. Why? Because unless you indicate that you want to drive one off the lot that day, they'll push you to order one or to take one in next months batch. They know there's enough impatience around that the ones on the lot will either act as advertising or someone will come in and demand an H2 at any price.

Ask your dealers some questions:

Q: Is their going to be a price increase?
Dealer: Yes probably in the next month or 2.
Reason: Get you to buy now.

Q: When does the H2 2004 come out?
Dealer: Late next year.
Reason: Far enough out so that you feel comfortable getting the 2003 now.

Q: When can I get one with a sunroof.
Dealer: Oh, it could take almost twice as long.
Reason: They want you to take one without a sunroof b/c they know the ones with a sunroof will sell easily. Also, if they want to push the non sunroof model they'll use the line "ah, most people don't use the sunroof anyway." That may be true but I think most people are in awe of cars with sunroofs.

Q: I want a basic model but I don't want to place an order. Do you have one?
Dealer: No. You won't find a basic one on the lot. You have to buy one with the options.
Reason: Yes, it's true however, there ARE basic H2's on the lots occassionally. These usually appear when someone has cancelled their order. You have to be vigilant to find these but they are there.

Q: I want Yellow. Can I get it in Yellow (the color that doesn't appear to be on the lot).
Dealer: Why? Don't you like red? There's a red one coming in that I think you'd like.
Reason: Some colors sell better than others so they'll push they'll push any color that they have coming in.

Q: How is the demand?
Dealer: Oh it's huge. All of the H2's are sold.
Reason: Get you to place order.

Q: Why have those been sitting here on the lot for weeks?
Dealer: Oh those are being picked up today.
Reason: Create perception of demand.

Q: (one week later)... why are those H2's still here?
Dealer: Oh, those aren't the same ones. Those are going out today.
Reason:... same same

Q: (one month from the last time you asked about the sun roofs) Why do all of the H2's on the lot have sunroofs when you told me they wouldn't be made until early next year?
Dealer: Oh those were ordered several months ago.
Reason: Coverup.

I could go on and on about dealer talk but you get the idea. If the price goes up, then I don't think I understand economics as I don't believe the demand is that high.

[JJ]

STEVE 2
Sounds like just another attempt to get you to put your money down now...........

I've heard everything from GM putting in the Northstar engine, approx. 30-40 hp more, to adding a diesel option. Plus theres the H2 Performance model, supercharged. And then theres the H3 and H4 models coming soon not to mention the SUT (which appears to be real). Just doesn't seem reasonable to expect that GM could handle all of this - something has to give.

You know, come to think of it I've read that GM will be test marketing the HUMCOPTER. A vertical take-off version of the H2 for short segment commuting - should be a big hit in LA and NY. Rumored to be a gas hog though....

JJ

[Texas Red]

There is currently no diesel option for the H2. I don't know what your dealer (salesman?) is talking about when he says "shortly," 2004?? Maybe. He probably doesn't know what he's talking about and just needs to go back to selling shoes!

Jim
Red H2 in Texas

[MAC]

Escalade may have a slightly higher MSRP but it is discounted by thousands $ cash back and whatever deal you can make, plus zero percent, zero down, in the end, it is much cheaper than Hummer.

Around here Hummer dealer lot has no Hummer, period.

From the business bean counter' view, having lots of new Hummers on the lot not selling is very expensive and dangerous, the natural thing to do is to cut price and bargain downward, unless Hummer has rule against that, but not sure if that is legal. You have to remember the dealers pay interest on all the cars on the lot, their job One is their own survival but Hummer brand image, if they have to, they can make all sorts of quiet deals. Once sales REALLY slows down, the jungle rule of "Supply & Demand" applies, the evidence will show: Discount. You have to move the merchandise as fast as possible, basic rule. So I am not sure having lots of Hummers on the lot but faking strong demand is a logical guess.

Of course, Hummer can and do limit production to create a short 4-8 weeks wait. Current wait for MB new E class is 6 months.