Tuesday, June 17, 2014

Best Selling Cars Around The Globe: Trans Siberian Series Part 14: The Hummers of Ulaanbaatar

This is the next step in our Trans-Siberian adventure. We stay in Mongolia, and after one week in the Gobi desert, saying that getting back to the Mongolian capital Ulaanbaatar (nicknamed UB here) is a total shock is an understatement. You would assume that civilisation progressively creeps back to culminate in UB, but it’s not so. Anything outside of UB is desert steppe, and when you arrive in the city it’s like turning a huge switch on: you instantly are in traffic jams going for kilometres! I saw in 10 seconds the amount of cars it took one week to spot outside the capital…

I couldn’t go on without pausing on one of the most surprising particularities of the UB car landscape: the astounding frequency of Hummers…

If you can’t wait for the next report, you can follow my trip in real time here, or check out 174 other car markets on my blog.

All models are represented, with the H2 being the most frequent. When riding my bike to Terelj National Park, I was even passed by a hugely huge H1 Alpha Wagon and it took both sides of the road to pass my tiny mountain bike! Scary. I also spotted a few pick-ups. One interesting fact in Ulaanbaatar is that a majority of these Hummers are driven by women. With 80% of the highest-ranking jobs in the capital held by women it makes sense that they drive one of the most expensive American vehicles around.

If you are interested, there is one Hummer on sale right in front of the big State Department Store in Ulaanbaatar for 90 million MNT which is a steep US$52,000. Any takers? Which begs the question: but where do all these Hummers come from? When the brand shut down in 2010, there were reportedly 2,200 vehicles remaining to be sold, so it would make sense that a share of these found their way to Mongolia. A very interesting South China Morning Post article explains it all for us.

In 2010 Terbish Bolor-Erdene, a 30 year-old entrepreneur president of the Mongolia Hummer Club, said there are around 300 Hummers in Ulaanbaatar, a quarter of them sold through his dealership. This number could well have jumped to 500 or 600 today. ’The Hummer started out as a military vehicle and we Mongols still think of ourselves as warriors. It’s just a perfect fit for our country and our people.’ he said. The SCMP says the vehicles are particularly popular with Mongolia’s nouveau ‘khans’. Owners include pop singers, CEOs and famous athletes. Sumo wrestler Davaagdorj Dolgorsuren, who became Japan’s 68th Yokozuna, drives a Hummer H1 (probably the one who passed me on my way to Terelj!).

Mongolia’s love affair with the Hummer started in the late 1990s when a brash cashmere magnate named B. Jargalsaikhan started driving around Ulaanbaatar in a Humvee, one of the original military vehicles designed and used by the US army. Hummers have since filtered into Mongolia’s growing upper class. Luvsandorj Magnaidorj, a policy director for the local traffic police office, drives an H2.

In 2010 when the article was written in the South China Morning Post, Bolor-Erdene and other importers were purchasing Hummers in the US and shipping them to Mongolia, via China. Shipping a vehicle cost around US$2,600 and once it arrives in Mongolia the importer will likely pay an additional US$6,000 in import duties.

The Hummers were then shined up and sold in parking lots around the city, with high mark-ups resulting in big gains for importers. In 2010 Bolor-Erdene said his asking price for his latest import, a Hummer H2 SUT, was US$120,000, whereas a typical US price for this vehicle was US$56,800 at the time. Now that Hummer production has stopped, importers like Bolor-Erdene have to rely on the remaining stock available (it is unclear whether there are still some new Hummers around) or used vehicles.

But the Hummer was not the only American gas-guzzler to be seen frequently around Ulaanbaatar… See below for more Yankees.

Matt Gasnier is based in Sydney, Australia, and runs a blog called Best Selling Cars Blog, dedicated to counting cars around the world.

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