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Wednesday, February 25, 2009

Standalone Saturn?

There has much discussion recently in the press about the possible future of Saturn as a stand-alone auto company. One scenario has GM spinning off Saturn to the dealer network, and the independent company would source cars from wherever it could, and sell them as Saturns, much like Sears' Kenmore brand.

There are some major problems with this idea. First, Saturn would have to find suppliers of cars that would be worthy of being sold as Saturns. Speculation centers on Chinese automakers. But the issue here is, none of the Chinese, as far as we know, are ready to enter the U.S. market. Malcolm Bricklin's big plans to bring Chery here with Visionary Vehicles fell apart; so apparently did plans for Dodge to bring a Chery sourced Hornet. I had the chance to examine a Chery car at last year's NAIAS, and I can tell you it was not up to North American standards for fit and finish. Even if Chinese Saturns were within a couple of years of being ready for U.S. customers, they would have to be very good to win over a skeptical public.

The other problem is the issue of market capacity. Without big-brother GM adding its corporate heft to Saturn, it would be yet another small import car company, similar to Subaru, Mitsubishi, Suzuki, Kia, and the former Isuzu. It would be another little brand trying for customers, in a market that is oversaturated with nameplates.

Saturn's problem is that it's brand has ceased to represent anything unique. It was started as a moderately priced seller of small cars and wagons with a no-hassle sales experience. It was morphed into a mid-market to up-market seller of decent but unexceptional cars and crossovers (they even had a Saturn minivan!). The only constant was the no-hassle dealership. In this market, basing a car brand around a sales attitude is not going to cut it.

Unless a foreign carmaker buys the Saturn brand and distribution network, I really doubt that Saturn has a future as an independent company. And if someone does buy Saturn, they are going to have a hard time making money.


jason said...

Couldn't they just source Opel here like they do now?

The Auto Prophet said...

No, they wouldn't make money at it. They can't make money on Astra, for example, because of the exchange rate. If they want to sell inexpensive cars, they have to source from the Chinese or other very low cost producer. said...




Anonymous said...

I'm late in getting into this discussion.
Why not buy Saturn and reopen as it did originally. A economical car built in the US with plastic parts etc.
If it was started using the original SC and SL models and stuck to that business model I think it could be very successful again!
Keep it simple! Keep the basic car the same and change the body panels for new looks every 5 to 8 years.
Hank III