The Telegraph
Since 1st March, 1999
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Muscle on wheels for moneybags

Moscow, Aug. 27 (Reuters): General Motors Corp today said it would start to assemble its Hummer H2 sports utility vehicle in Russia to target the country’s growing band of businessmen with money to burn and a desire to impress.

GM signed a framework agreement with Russian automaker Avtotor at Moscow’s annual motor show to produce two to four hundred of the huge cars, which are based on the military Humvee, and hopes to begin selling them in November. The vehicles will be made at Avtotor’s plant in Kaliningrad, a Russian enclave in the Baltic region.

The Hummer H2 weighs almost 3,000 kg, has a six-litre engine and fuel consumption of just 20 litres per 100 km. It falls outside US regulations on fuel economy and has drawn the ire of environmental activists.

“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 said.

“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. Schwarzenegger drove a Hummer H1, the predecessor of the current model.

Widel said the car sells for between $50,000 and $60,000 in the US but Avtotor chairman Vladimir Shcherbakov said the Hummer H2 would 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 was only around 10,000 per year.

Avtotor assembles KIAs and BMWs at the Kaliningrad plant. All parts for the new model will be imported from the US.

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

GM would not give any figures, saying the agreement was at a framework stage and that many details still needed 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 will soon start production of Opel Astras there, too.

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

“It won’t be long before you see them on the streets of Moscow and St Petersburg,” he said.

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