General Motors (GM.N: Quote, Profile, Research, Stock Buzz) expects to sell its Hummer brand by the end of this year or early in 2009, as it shores up capital to survive a deep industry slump amid record losses, its chief operating officer said.

GM, which has lost $51 billion over the past three years, plans to free up $15 billion in liquidity with cost-cutting, asset sales and new borrowing under a July plan intended to reassure investors that it can ride out of the down turn.

“We are trying to approach this (Hummer sale) on an urgent basis,” he said. “End of this year is a fair amount of time. It can conceivably happen … but if it takes us to early next year, that is okay, too,” Fritz Henderson told reporters.

“We are working quickly. It will be premature to mention something,” Henderson said on Wednesday, adding that “several” suitors had approached GM. But he declined to name any.

U.S. VEHICLE SALES DROP

At the launch of a new model in the Indian capital he added he expected the U.S. auto industry to face challenges for some time and sees vehicle sales there falling to 14 million vehicles in 2008 from 16 million last year.
GM was not just looking at selling brands but also other businesses, but Hummer would be among the first, he said.

The gas-guzzling Hummer has hurt GM’s image at a time when consumers demand more fuel efficiency as high oil prices hurt. Hummer’s U.S. sales fell 40 percent in the first half of the year.

GM is getting serious about selling Hummer. So serious, in fact, that COO Fritz Henderson expects the brand to be gone by the end of the year or early 2009.

“We are trying to approach this on an urgent basis,” he said. “End of this year is a fair amount of time. It can conceivably happen…but if it takes us to early next year, that is okay, too,” Henderson told reporters at the inauguration of GM’s second plant in India. “We are working quickly. It will be premature to mention something.”

Fritz said that GM has been approached by “several” suitors, but declined to specify who they might be. This is the strongest statement on the subject yet from the General, which has until recently been tight-lipped about the future of Hummer.GM is hoping the sale of Hummer, whose sales are down 40% this year, will help offset some of GM’s monumental losses over the past few years and free up money that can be invested in other products. GM’s sales are down dramatically this year and the company predicts that the U.S. market will shrink to 14 million vehicles this year, down from 16 million in 2007.

Henderson said that GM’s top priority is to turn around its North American business and continue to invest in emerging markets like India, where GM hopes to hold one tenth of the market share by 2010, when Indian vehicles sales are expected to top two million units annually.

Speaking about whether investment in foreign markets will offset the slump in the North American market, Henderson said: “It is not about either/or, it is about both.”

GM is realigning its North American production to reflect a U.S. auto market reeling from an oil shock being compared to those of the 1970s. It plans to close four truck plants but add shifts at two others that build popular higher mileage cars.

Henderson expects softer sales in the United States in 2008 as oil prices and the credit crisis deter customers.

“It is going to stay challenging for some time,” he said. “Have we found the bottom? I don’t know.”

On Tuesday he said the top priority was to turn round the North American business and continue investments in emerging markets such as India and China.

He inaugurated the car maker’s second plant in India on Tuesday and GM hopes to control a 10th of the Indian market by 2010, when passenger vehicle sales are expected to hit more than 2 million vehicles.

When asked how soon he expected emerging markets to offset the slump in U.S, he said: “It is not about either/or, it is about both.” (Writing by Narayanan Somasundaram, Editing by Mark Williams, Greg Mahlich)