When Ken Townsend first laid eyes on the hulking Hummer H2 in all its macho glory at the Los Angeles Auto Show more than a year ago, he was stopped dead in his tracks. Townsend, 55, a partner with Ernst & Young, reckoned he could finally drive something that every other well-to-do Malibu resident didn't have. Says Townsend: "My first thought was, 'I gotta have it."' He shelled out $64,000 last August for the 3.2-ton truck.
It's bulletproof luxury -- and the only thing troubling Townsend now is that too many people followed his lead. Even with the economy in the tank and all the bad press for big, gas-guzzling sport-utes, demand for the H2 shows no sign of easing off. It has been selling at a rate of as many as 3,800 a month since hitting showrooms last July, outpacing established luxury SUVs such as the Cadillac Escalade, Lincoln Navigator, and Land Rover Range Rover, to become the top seller in its class. "This is one of the hottest things in Los Angeles," says Wesley Brown, an analyst with automotive consulting firm Nextrend Inc.
Even cash-grabbing tactics by dealers haven't deterred buyers. The sticker starts at $54,000, but dealers across the U.S. often pack the trucks with so many options and gadgets that buyers can't find one without $10,000 in equipment included. Items like chrome wheels or an exterior rack for the spare tire -- which comes bolted into the cargo area and takes up most of the storage space -- cost about $1,500 each. Worse, high demand has prompted some dealers to add thousands to the price. Comedian Scott Thompson, better known as the freakish red-haired character Carrot Top, bought his black H2 in California to avoid a massive markup from a dealer in Las Vegas, where he often performs, says Evan Weiss, sales manager of Team Hummer of Pasadena, which sold the SUV to Thompson.
Why is the truck so popular? "The testosterone element is a key part of [it]," says Michael DiGiovanni, general manager of Hummer for General Motors Corp. (GM) Nearly three-quarters of buyers are men, who are happy to shell out big bucks for a vehicle so pricey that only the most successful alpha males can afford one. Actor Arnold Schwarzenegger persuaded military contractor AM General Corp. to sell him one of the trucks in 1992. The H1, as it is now called, is modeled on the Humvee that U.S. troops used during the Gulf War. The $100,000 H1 still boasts a small cult following, but its spartan interior and rough ride have limited sales to 700 a year. GM recognized the Hummer's cachet and bought the name in late 1999. The auto maker designed the H2 with more creature comforts than the H1. GM has plans for a smaller H3 and after that the H4, which has been billed as a Jeep Wrangler on steroids.
The Hummer craze is not just an American phenomenon. Some dealers have sold H2s at big markups to wholesalers, who then sell the trucks to buyers in the Middle East and Europe for twice what they pay stateside, Weiss says. GM plans to start exporting the truck soon. But with plenty of buyers like Townsend in the U.S., those rich, restless, and rugged elsewhere will have to wait. By David Welch in Detroit