GM CFO downplays Cadillac Sixteen, confirms H3

Reuters / February 27, 2003

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DETROIT -- The Cadillac Sixteen, a 1,000 horsepower 16-cylinder luxury sedan concept vehicle that was the hit of the Detroit auto show, will probably not go into production, General Motors' Chief Financial Officer said on Wednesday.

But GM CFO and Vice Chairman John Devine confirmed during a Prudential Securities conference in New York that GM will build the Hummer H3, a smaller version of the rugged Hummer H2, the military-like sport utility vehicle that has been a hit since it went on sale last year. GM is also considering another Hummer truck, the Hummer H4, he said.

Referring to the Cadillac Sixteen, Devine said; "We're not going to do this probably, but it got people's attention that Cadillac is back and has the capability, we think, to do the best cars in the world."

Devine reiterated that GM will launch a sport utility truck (SUT) version of the Hummer H2, which is due to go on sale in second quarter in 2004. Devine added; "We have something called the H3, which will be a downsized version of the H2, coming out shortly after that, and we're thinking, frankly, about an H4."

The growth of the Hummer and Cadillac brands have fueled GM's two successive years of U.S. market share gains and stronger profits.

Cadillac chief Mark LaNeve has said repeatedly that the GM division would like to make a high-end vehicle selling for more than $100,000 to add prestige to the brand, rather than head downmarket into the $20,000 to $30,000 price range as some of its competitors have done.

FUEL ECONOMY DEBATE

AutoWeek magazine, a sister publication to Automotive News, named the Cadillac Sixteen the "best in show" of the Detroit auto show. But some analysts said the automaker would be reluctant to put such a large engine in a vehicle, given the current debate over fuel economy.

GM said in October last year it would place V-12 engines in future Cadillacs for the first time since 1937. Those engines would have technology which would shut down some cylinders when they are not in use to save fuel. At last year's Detroit auto show, GM showed the Cadillac Cien, a sports car with a 750-horsepower V-12 engine.

Mike DiGiovanni, the head of GM's Hummer division, told Reuters in an interview that the H3 has not yet been fully approved. "If all things remain equal, we don't have some negative economic downturn, I think John's comments are accurate; it will fall shortly after the SUT (H2 sport utility truck). It's proceeding very well."

"With H3, we expect to do over 100,000 units a year," DiGiovanni said. GM officials have said previously that the H3 could be priced starting in the $30,000 to $35,000 range.

He also confirmed that GM is studying building an H4. "At this point, it's a concept, it's an idea. we really have a ton of work to do to determine whether we can make a business case," he said.

Hummers are currently sold at 157 dealerships, about 60 percent of which are paired with Cadillac. DiGiovanni said that Hummer plans to expand its dealerships with the addition of the H3, but to no more than 200, to ensure a high number of sales per dealership.

Originally posted by muckz
Yay! More SUV's, more!