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Penske Plans For Saturn Cleared Up, Sort Of

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On: Thu, Sep 24, 2009 at 2:21PM | By: John Welch

Penske Plans For Saturn Cleared Up, Sort Of

Saturn has always been an eclectic brand. Offering nothing more then two different versions of the same car for nine long years (the 'S' which came in SOHC and DOHC versions between 1990 and 1998), Saturn always found another way to connect with customers. Their dealership policies concentrated on a personal relationship with the customer, simple to understand pricing, and friendly rapport keeping the showrooms packed. Competing for the GM design teet with GM's other brands was often a losing battle for Saturn, leaving them with sub-standard products at a time when the Japanese and Koreans were pumping out higher quality vehicles for the same price.

No amount of customer loyalty can make up for a bevy of off-putting products, leading to a serious decline in sales. Saturn is looking at moving less then 100,000 units this year, way down from Saturn's sales peak, 286,000 units in 1994.This year alone overall sales for the division have dropped 58 percent. Instead of killing Saturn, ala Pontiac, the General is adding this beleaguered brand to the auction block, along with Saab, Opel, and Hummer.

It looks like Roger Penske is interested. Recently, certain details of his purchase have come to light, clearing up exactly what the (real) 'most interesting man in the world' plans to do with his new baby . . .

Penske purchasing Saturn is not really news, this story has been floating around for months. Penske has been tight lipped on his plans for the Saturn Division, his silence justified by the legal ramifications surrounding this massive business deal. A few clues as to how he plans on making Saturn a success in the future are now apparent.

“This is a distribution business, not a manufacturing business,” Mr.Penske told auto analysts in a conference call in late July. “So, it’s similar to what we have at Smart.” That is a very telling quote. The deal Penske has with Daimler involves distribution of the Smart solely. Penske avoids certain risks because all of the manufacturing is handled by Daimler — Penske simply imports the cars and puts them on his Penske Auto Group lots. Penske can order exactly as many Smart cars as he feels he can sell, eliminating unnecessary overhead.

The plan is to make use of Saturn's 350 established dealerships. This network of loyal customers is ripe for the picking. There are some Saturn loyalists who would buy 25 year old re-badged Pontiac LeMans if they were sold by Saturn. GM will stop building and supplying Saturns in 2011, leaving Penske free to shop around for the best deal from any automaker. The front runner so far is Samsung/Renault.

Building what amounts to Korean-market Nissans, Samsung/Renault has a portfolio of semi-desirable vehicles and has been eying the U.S. market for many years. Some of their models are strictly Renault-sourced and may present interesting newcomers to our market. Anything based on the Renault Twingo would be nice.

Penske explains the Smart Car deal in his own words . . .

There are more details yet to come, but it looks like Saturn may yet live on . . . what form it takes is still up in the air.

Source: The New York Times

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