Hudson's Blog

May 25, 2009 - Ringing in the New Saturn

Saturn lost its way.

General Motors had a great idea to revolutionize the way it built and designed cars and this became Saturn. The original Saturn SL sedan wasn’t a class-leading vehicle by any stretch of the imagination, but it was a good American car at a good price. Saturn dealers built up stand-alone showrooms with haggle-free sales and salespeople on salary instead of commission.

Saturn owners became a cult. They would return to dealerships for service and get a free car wash. They would return to dealerships as if they were family members joining a reunion with hot dogs and hamburgers. They would even make the pilgrimage to Spring Hill, Tennessee, to visit the “birth place” of their beloved cars.

Any uniqueness designed into the original Saturn models and dealerships faded as the 1990s passed. The “reunions” ended and dealers dropped the car washes. Eventually, products were built outside of the Spring Hill plant in regular General Motors plants. Models shared platforms and engines with other GM products, diluting the characteristics that made Saturn “a different kind of car company.”

Toyota tried to create the cult of ownership with its Scion brand. The distinctive (for the US market) design of the Scion xB and the fun, sporty nature of the Scion tC have generated their own sub-culture, similar to where Saturn started. Had Saturn created some unique vehicles and continued family-like feeling among its owners, the brand could have become a success.

Which brings us to today, nearly two decades after the first car rolled off of the Spring Hill assembly line. General Motors believes that it cannot make Saturn work. With more than 400 dealers who have spent millions of dollars for scratch-built showrooms, General Motors can’t affordably walk away from them, most of which are strong non-Saturn GM dealers as well.

GM has already announced the end of production for Saturn vehicles, but still intends on selling the dealer network. Among the most interesting potential buyers for Saturn is the Penske Automotive Group.

Automotive News reports that Penske is negotiating with Renault Samsung Motors of South Korea to supply products. Current Samsung products could directly replace each of the existing Saturn products (aside from the niche Sky roadster and the large Outlook crossover). And since all Samsung products are based on Nissan products, getting the vehicles up to US specs wouldn’t be a stretch.

Penske’s Saturn could have a compact and mid-sized sedan as well as a compact SUV ready for launch not too long after the papers are signed. But could they make it a success?

Just like Saturn’s current lineup of the compact Astra, mid-sized Aura, and Vue, the Samsung SM3, SM5/SM7, and QM5 are good vehicles without much to distinguish them. They lack the “fun” of a Scion. They lack the image of a Subaru. And Saturn lost the cultiness of a Saturn many years ago.

Penske’s group has been very good at managing the automotive business. From racing to sales to fleet management to service, they’ve done a great job. Even as the sole importer of Daimler AG’s Smart cars, they’ve been a success. But the purchase of Saturn would graduate Penske to a whole new level of “full-line” marketer.

Even with the help of Renault (and their wizard leader Carlos Ghosn), the Penske/Saturn/Samsung combination would be a long-shot bet. General Motors built this brand up from scratch with billions of dollars invested and only had a few quarters of profits in nearly 20 years of existence. Even with dramatically lowered investment cost, making Saturn a success now will be nearly impossible.

This will either be Roger Penske’s greatest achievement in the automotive realm (and he just won his 15^th Indianapolis 500) or the move that tarnishes his automotive business legacy. Sadly, the latter is more likely.

9:26 pm | Categories: saturn, samsung, renault, penske, roger penske, carlos ghosn, general motors Permalink | Alert Administrator

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