Is the Hummer running out of gas?

In perhaps the clearest indication yet of the changing nature of motorists' purchasing habits, automotive giant General Motors (GM) yesterday launched a major restructuring plan designed to bolster production of cleaner, more fuel-efficient models, cease manufacturing at four factories producing trucks and SUVs, and launch a review into selling off its iconic Hummer brand.

Speaking at the company's annual meeting, chief executive Rick Wagoner said the restructuring was in direct response to shifting consumer demand in favour of more fuel-efficient vehicles, a situation he predicted would continue in the long term.

"Higher gasoline prices are changing consumer behavior, and they are significantly affecting the US auto industry sales mix," he said, adding that the company believed these changes were "more structural than cyclical".

Environmentalists welcomed GM's decision to review the future of the Hummer, a 2.6 tonne vehicle which does only 10 to 15 miles to the gallon and has been repeatedly attacked by green groups as a symbol of the auto industry's alleged failure to take environmental concerns seriously.

Sales of the vehicle have plummeted in the US amid soaring petrol prices and a concerted campaign against the car by green activists that saw some showrooms face arson attacks. US sales for the first four months of the year fell 27 per cent on 2007 levels to just 12,243 vehicles.

GM said it would consider all options for the car, "from a complete revamp of the product lineup to a partial or complete sale of the brand".

The shift away from gas guzzlers will be accompanied by a significant scaling up of production in more fuel-efficient vehicles, including the company's long-awaited plug-in hybrid the Chevy Volt.

At the meeting the GM board formally approved funding to take the vehicle into production. "The Chevy Volt is a go," said Wagoner. "We intend to show a production version of the Chevy Volt publicly in the very near future, and we remain focused on our target of getting the Volt into Chevrolet showrooms by the end of 2010."

The company also gave the go-ahead to plans to further expand its range of smaller fuel-efficient vehicles, including a compact Chevy and a new version of the Chevy Aveo.