TV Famous Towbin HUMMER in Vegas closes its doors

The up-for-sale and floundering HUMMER brand, coupled with high gas prices, has led to the closure of one of the U.S.'s largest HUMMER dealerships. Towbin HUMMER of Las Vegas, which garnered national attention as part of the A&E television series "King of Cars," is the only HUMMER dealership in Las Vegas, yet will be the eighth HUMMER dealer to close this year.

With General Motors still trying to unload the HUMMER brand, there is little good news for the HUMMER name as sales have dropped 47% this year, lending a hand to the 5% decline in the brand's U.S. dealer base. However, the closing of Towbin HUMMER has been newsworthy because of the geographic location of the dealership. According to Dan Towbin, co-owner of the dealership, "Las Vegas is a custom fit for HUMMER. It's all about bling and it's in the desert." The fitment of the gas-guzzling SUVs in Las Vegas is in stark contrast to the location of a HUMMER dealership in San Francisco, where the people are a bit more environmentally friendly and another dealership also recently closed. Now Towbin will sell Smart cars instead.

One of the difficulties in moving the HUMMERs off dealership lots is the cost associated with filling one up. At a national average of $3.66 a gallon for gas, it would cost $84 to fill up an H3, the smallest and the base model. Another difficulty for dealerships in surviving the current economy is the lack of profit made per vehicle sold. According to edmunds.com, a HUMMER buyer in August received an average of $8,861 in purchasing incentives, compared to $80 in incentives for BMW's Mini and $131 for Toyota's Scion. With the H3 priced around $31,000, HUMMER's $8861 in discounts represents nearly a quarter of the sale price at 22.6%, the highest in the automotive industry.

The remaining value of the HUMMER brand lies overseas, where buyers in the Middle East, Africa, Asia, and Eastern Europe may still want to purchase the SUVs. Sheldon Sandler, founder of Bel-Air Partners, says "it's hard to see where the value is for dealers or consumers in HUMMER in the United States. It's yesterday's fashion statement...sort of the automotive equivalent to hula-hoops."

Source: Wall Street Journal Blog