GM to build Hummers in Russia

[maybe some day...]

GM to build Hummers in Russia
Output of 200-400 of the SUVs set for Baltic plant to slake demand of wealthy Russians.
August 27, 2003: 12:27 PM EDT

MOSCOW (Reuters) - General Motors Corp. said Wednesday it will assemble its Hummer H2 sport/utility vehicle in Russia to target the country's growing business elite with money to burn and a need to impress.

GM (GM: Research, Estimates) signed a framework agreement with Russian automaker Avtotor at Moscow's annual motor show to produce 200 to 400 of the huge vehicles, which are based on the military Humvee, and hopes to begin selling them in November.

Hummer H2

The vehicles will be made at Avtotor's plant in Kaliningrad, a Russian enclave in the Baltic region.

The Hummer H2 has drawn the ire of environmental activists. It weighs about 6,400 pounds and has a six-liter V8 engine. It falls outside U.S. regulations on fuel economy, so its gas mileage is not rated by the Environmental Protection Agency.

"We expect our customers to be achievers who want to show off their success and follow the fashion set by Hollywood actors, or successful people who hunt and need to travel across difficult terrain," GM's regional marketing manager Pawel Widel told Reuters.

"It will be a very unique car in Russia, and Arnold Schwarzenegger is its icon, so it's a very strong and masculine image," he added. Tough-guy actor Schwarzenegger drove a Hummer H1, the predecessor of the current model.

The vehicle sells for $50,000 to $60,000 in the United States, but Avtotor Chairman Vladimir Shcherbakov said the Hummer H2 will sell for $85,000 to $110,000 in Russia.

"It's a niche product, so realistically 400 is the maximum we can hope to sell in a year. We don't have plans to produce thousands of them," he said, adding that the market for all luxury SUVs in Russia is only about 10,000 per year.

Avtotor currently assembles KIAs and BMWs at the Kaliningrad plant. All parts for the Hummers will be imported from the United States.

Shcherbakov said the company will invest another $70 million in the plant on top of $200 million already spent.

GM would not give any figures, saying the agreement is at a framework stage and that many details still need to be ironed out.

GM already makes cheap off-road Chevrolet Nivas at a $322 million joint venture with AvtoVAZ in the Volga town of Togliatti, and AvtoVAZ has said the plant soon will begin producing Opel Astras.

Widel said the Hummer H2, available in bright yellow and orange as well as the original black, meets all Russian environmental rules.

"It won't be long before you see them on the streets of Moscow and St. Petersburg," he said.
Copyright 2003 Reuters All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

[maybe some day...]

GM to build Hummers in Russia
Output of 200-400 of the SUVs set for Baltic plant to slake demand of wealthy Russians.
August 27, 2003: 12:27 PM EDT

MOSCOW (Reuters) - General Motors Corp. said Wednesday it will assemble its Hummer H2 sport/utility vehicle in Russia to target the country's growing business elite with money to burn and a need to impress.

GM (GM: Research, Estimates) signed a framework agreement with Russian automaker Avtotor at Moscow's annual motor show to produce 200 to 400 of the huge vehicles, which are based on the military Humvee, and hopes to begin selling them in November.

Hummer H2

The vehicles will be made at Avtotor's plant in Kaliningrad, a Russian enclave in the Baltic region.

The Hummer H2 has drawn the ire of environmental activists. It weighs about 6,400 pounds and has a six-liter V8 engine. It falls outside U.S. regulations on fuel economy, so its gas mileage is not rated by the Environmental Protection Agency.

"We expect our customers to be achievers who want to show off their success and follow the fashion set by Hollywood actors, or successful people who hunt and need to travel across difficult terrain," GM's regional marketing manager Pawel Widel told Reuters.

"It will be a very unique car in Russia, and Arnold Schwarzenegger is its icon, so it's a very strong and masculine image," he added. Tough-guy actor Schwarzenegger drove a Hummer H1, the predecessor of the current model.

The vehicle sells for $50,000 to $60,000 in the United States, but Avtotor Chairman Vladimir Shcherbakov said the Hummer H2 will sell for $85,000 to $110,000 in Russia.

"It's a niche product, so realistically 400 is the maximum we can hope to sell in a year. We don't have plans to produce thousands of them," he said, adding that the market for all luxury SUVs in Russia is only about 10,000 per year.

Avtotor currently assembles KIAs and BMWs at the Kaliningrad plant. All parts for the Hummers will be imported from the United States.

Shcherbakov said the company will invest another $70 million in the plant on top of $200 million already spent.

GM would not give any figures, saying the agreement is at a framework stage and that many details still need to be ironed out.

GM already makes cheap off-road Chevrolet Nivas at a $322 million joint venture with AvtoVAZ in the Volga town of Togliatti, and AvtoVAZ has said the plant soon will begin producing Opel Astras.

Widel said the Hummer H2, available in bright yellow and orange as well as the original black, meets all Russian environmental rules.

"It won't be long before you see them on the streets of Moscow and St. Petersburg," he said.
Copyright 2003 Reuters All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

[DRTYFN]

NO WAY!!!! I call BULL SH*T!!!!! No way, no how!!!!

[maybe some day...]

<BLOCKQUOTE class="ip-ubbcode-quote"><font size="-1">quote:</font><HR>Originally posted by DRTYFN:
NO WAY!!!! I call BULL SH*T!!!!! No way, no how!!!!<HR></BLOCKQUOTE>

Do you have any idea how much freakin' money is over there in certain circles??? The military may be starving but the new class of entrepreneurs are doing quite well.

[SJ]

maybe some day:

I have family in various parts of Europe. My wife's family lives on the border with Kaliningrad, Lithuania, and Belarus.

There is money in the consumer field, but it's not on the same widespread scope as North America. It's a very select group of people that are involved in legitimate and illegitimate business that can afford these luxuries. The report says that they hope to sell 400 units in Russia - OK, this seems realistic, so maybe GM is doing this venture for brand esteem and to get a foot-hold in Europe in preparation for the H3?

I saw 1 H1 and 1 H2 in Europe and it's most likely that the owners are mafia or politicians - based on where they were parked and the area. Highly successful business people have money, but they don't constitute much of a market for GM to try to sell these gas guzzlers in nations where gas/petrol runs about $3.50 to $4.75 per gallon.

The two things Kaliningrad have going for it as an assembly site is access to the Baltic Sea and Favorable Trade Conditions due to its zone established by Russia. The report still seems very speculative, as if GM is just testing the waters.

I wouldn't drive a H2 in Kaliningrad, Warsaw, Prague, Moscow, or Budapest for any amount of money you paid me. Too much traffic, high cost of gas, and the threat that mobsters will take your car in broad daylight [you're lucky if they don't shoot you].

Interesting Report No Less!

[RasterMaster]

Hummers are made in only ONEplace, that is Mishawaka, Indiana.

Check out the OkC Chapter Page!

[MAC]

To make 200-400 vehicles, it is basically a low tech handmade process of putting together parts. Buy and ship in the parts, substitute any parts you can buy or make locally. Most local body shops here in the States can do the job, so in essence, this is a big Russian body shop. Russian mafia are so good at stealing cars in Europe, guess the problem here is there are just so few Hummers to steal in Europe, and Hummer owners over there are not the types you want to mess with.

If this is true and works out, everybody wins. GM sells lots of parts, more profitable than selling vehicles; Hummer can say we now make Hummers in Russia, put a map pin on the map. Russians win, instead of copy the Hummers, now they have the legal right, cut the cost with as many local parts as they can. There are tax breaks, write off, depreciation, often worth more than the vehicles they sell.

Toyota and Nissan have plants in many countries around the world, in many of these countries, exact same vehicles made in Japan are available, they are far more desirable, cost 50%-100% more, yet always enjoy a waiting list.

If you don’t trust the Enron or Worldcom numbers, wait till you deal with Russian or any third world numbers. $70 million in press releases is usually $7 million in reality. It is perfectly normal to cheat, wrong or defraud.

[H2 Daddy]

Wouldn't it be easier to just build them here and then ship them?

[MAC]

I often wondered about fake Rolex watches or fake designer wears, they are so well made, so real and work just as well or better, why don't they spend some of that brain power to design or invent something original and new? It is amazing when you take a close look at the fake goods, not easy at all, requires skill, resources and brain.

For the Russians to buy 500 new USA made Hummers factory direct should be $30K-$35K each? plus $2K-$3K for container shipping or less on a returning empty car carrier. Seems to me it is a lot cheaper to ship in the originals. There could be extra benefits by assembling them in Russia, tax and depreciation, government support, whatever.

[Big Z]

O.K.--What am I missing--Since when did GM start Building--HUMMERS???

[DennisAJC]

Oh come on! Why is everyone so glum???

We should be all flattered. Next thing you know we'll have a few Reds joining the Forum.

McDonalds in Moscow? The times are a changing.

He ain't heavy.....
He's ma HUMMER baby!
03 NUDE Pewter Lux H2
03 Dressed Range Rover

[RasterMaster]

I doubt much has changed in Moscow. They still sell weapons to our enemies, they have yet to clean up their own messes, and their leader is former head of KGB.

Check out the OkC Chapter Page!