VH_Supra26
02-16-2009, 07:00 PM
by Ralph Hanson
http://www.motorauthority.com/content/thumbs/2/0/2009_saturn_sky_redline_main630_02-0212-630x360.jpg
The latest news for Saturn is grim, despite the brands "good cars" says Lutz
The last couple of months have seen General Motors looking at dropping its poor performing Saturn brand, along with sales of Hummer and Saab. Now the retiring product-development guru Bob Lutz has said he doesn't think the brand will make it through the current market trough, though he likes the cars.
The problem isn't limited to the slumping economy though - Saturn has never amounted to what GM had hoped for. "We spent a huge bundle of money in giving Saturn an absolutely no-excuses product lineup, top to bottom. They had a better and fresher lineup than any GM division, and the sales just never materialized. So we have to act on that. It's our duty," Lutz told Automotive News.
While GM is throwing the majority of its cash and effort at its most profitable brands - Chevrolet, Cadillac, and Buick - the company has so far insisted that the Saturn brand has both a "current and future" product program. Saturn dealers, on the other hand, are anxious about the brand’s future and have been kept in the dark.
The outlook isn’t good. According to Autodata vehicle statistics, Saturn’s sales figures in January dropped 59.8% on the same period a year ago and the brand’s share has dropped to below 1% - less than Buick and Pontiac. GM has also said it will drop eight nameplates by 2012 and many of them are likely to be Saturns.
Securing a foreign buyer seems unlikely for the weakened brand, since Saturn doesn’t actually build any of its own cars, engines or transmissions. The entire lineup consists mainly of badge-engineered vehicles borrowed from other GM brands.
If GM doesn't get rid of Saturn, one key area it will focus on is to figure out how to reduce the brand's structural costs and create a business model that is profitable - in the past 20 years, Saturn has been profitable for only one year.
On the flipside, dumping Saturn and cutting its losses may seem like the easier choice than constructing a new business model for the brand, though doing so would put GM out of pocket by a significant amount of cash – something it currently does not have. To dump the brand, GM would be forced, by law, to buy out the 211 Saturn dealers across the country at a cost of nearly $1 billion. That may be the better long-term option, however, says Lutz. "The fact is, we don't have the time or the resources to take 10 years to figure it out and possibly turn it around."
All Content Copyright 2006-2008 Motor Authority
http://www.motorauthority.com/report-gm-may-keep-saturn-and-rebuild-it.html
http://www.motorauthority.com/content/thumbs/2/0/2009_saturn_sky_redline_main630_02-0212-630x360.jpg
The latest news for Saturn is grim, despite the brands "good cars" says Lutz
The last couple of months have seen General Motors looking at dropping its poor performing Saturn brand, along with sales of Hummer and Saab. Now the retiring product-development guru Bob Lutz has said he doesn't think the brand will make it through the current market trough, though he likes the cars.
The problem isn't limited to the slumping economy though - Saturn has never amounted to what GM had hoped for. "We spent a huge bundle of money in giving Saturn an absolutely no-excuses product lineup, top to bottom. They had a better and fresher lineup than any GM division, and the sales just never materialized. So we have to act on that. It's our duty," Lutz told Automotive News.
While GM is throwing the majority of its cash and effort at its most profitable brands - Chevrolet, Cadillac, and Buick - the company has so far insisted that the Saturn brand has both a "current and future" product program. Saturn dealers, on the other hand, are anxious about the brand’s future and have been kept in the dark.
The outlook isn’t good. According to Autodata vehicle statistics, Saturn’s sales figures in January dropped 59.8% on the same period a year ago and the brand’s share has dropped to below 1% - less than Buick and Pontiac. GM has also said it will drop eight nameplates by 2012 and many of them are likely to be Saturns.
Securing a foreign buyer seems unlikely for the weakened brand, since Saturn doesn’t actually build any of its own cars, engines or transmissions. The entire lineup consists mainly of badge-engineered vehicles borrowed from other GM brands.
If GM doesn't get rid of Saturn, one key area it will focus on is to figure out how to reduce the brand's structural costs and create a business model that is profitable - in the past 20 years, Saturn has been profitable for only one year.
On the flipside, dumping Saturn and cutting its losses may seem like the easier choice than constructing a new business model for the brand, though doing so would put GM out of pocket by a significant amount of cash – something it currently does not have. To dump the brand, GM would be forced, by law, to buy out the 211 Saturn dealers across the country at a cost of nearly $1 billion. That may be the better long-term option, however, says Lutz. "The fact is, we don't have the time or the resources to take 10 years to figure it out and possibly turn it around."
All Content Copyright 2006-2008 Motor Authority
http://www.motorauthority.com/report-gm-may-keep-saturn-and-rebuild-it.html