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General Motors wants to triple sales of its Hummer sport utility vehicles within the next three years despite high gas prices causing U.S. motorists to pinch pennies at the pump.

GM's sluggish sales resulted in a $1.1 billion first-quarter loss but the Detroit automaker believes the new H3 will still sell. The smaller, less expensive Hummer will be released at the end of May, marking GM's first entry into the midsize SUV market.

In a market full of ordinary SUVs, H3 is an extraordinary new presence, said Susan Docherty, general manager of GM's Hummer division. H3 will appeal to a slightly younger and more diverse group of customers with a base price and a size that puts it in the heart of the midsize utility segment.

GM expects the Shreveport-built H3 to be the line's bestseller and hopes to push Hummer sales to 80,000 annually by 2007. The brand sold fewer than 29,000 vehicles last year.

The H3's size, price and fuel economy are more in line with GM's Chevy Trailblazer than its Hummer H1 or H2.

The H3 will start at about $29,500, about a quarter of the price of the H1, which goes for $117,508, and half the price of the H2 at $53,055.

The new model will get much better gas mileage - 15 miles per gallon in city conditions and 18 mpg on the highway - compared to the H1 and H2, which get about 10 mpg in the city and 12 mpg on the highway.

The Trailblazer starts at $30,800 and gets 15 mpg in the city and 20 mpg on the highway.

Despite higher gas prices, H2 sales are on pace to match 2004 figures.

Consumer demand, as reported by our dealers, is actually a little stronger than we thought they'd be, said David Caldwell, a spokesman for GM's Hummer division.

If the buyer can afford the truck, the price of gas doesn't matter, he said.

Because demand has been steady, GM may increase its Hummer production to keep pace with demand for the large SUV, he said.

Bill LaBruyere, general sales manager of Hummer of Metairie, the lone Hummer dealership in the New Orleans area, said GM has slowed production of the vehicles, but sales have not diminished despite gas prices. He expects an increase with the introduction of the new model.

Interest in the H2 has dropped a little bit because of fuel prices, but sales really haven't slipped. We sell every one we get, he said.

Hummer of Metairie sold 61 vehicles and leased 30 last year. The dealership sold 161 and leased five in 2003, according to the motor vehicle registration service of Louisiana.

But the price and fuel efficiency of the H3 should increase public interest in the brand, especially among younger buyers, he said.

We've already had seven orders placed on them already and they won't be out until late May, LaBruyere said. We really think the H3 is going to be popular and we're expecting great things.

GM spent $250 million to add 296,000 square feet of manufacturing space at its Shreveport plant to produce the H3, bringing its total investment in the plant to $1 billion.

The new H3 production line created more than 300 jobs and added to the approximately 3,200 GM employees in Shreveport.

But Hummer may have to continue to develop new models to meet its sales goals.

Sens. Dianne Feinstein, D-Calif., and Olympia Snowe, R-Maine, have sponsored a bill to eliminate the SUV loophole in federal fuel efficiency guidelines by 2011. The bill would apply the same federal fuel efficiency standards used on passenger cars - 27 mpg - to SUVs and light-duty trucks, which made up more than half of new car sales in the United States in 2004.

Federal fuel economy standards require light trucks and SUVs weighing up to 8,500 pounds to average 21 miles per gallon.

The standard doesn't apply to larger SUVs such as the H2. But the bill would increase the weight range of vehicles restricted by federal standards and make it harder for manufactures to build SUVs not governed by those standards.

The bill could save as much as 1 million barrels of oil per day, reduce dependence on foreign oil imports by 10 percent and reduce carbon dioxide in the atmosphere, according to Snowe.