Houston, Texas, April 2007

It's Now Or Never for Saturn

Saturn division was GM's long neglected builder of econo-box automobiles.

Saturn was a new kind of automobile company when General Motors launched the experimental brand back in 1990.

Why then-CEO Roger Smith thought they needed yet another brand of automobiles is still subject to debate. Some say it was an attempt by the struggling bureaucratic dinosaur to reinvent itself.

But when a big source of the bureaucracy was the overcrowded stable of brand "divisions", a shoot-in-the-foot award seems justified.

Folksy imagery positioned the Saturns as user-friendly, in a manner reminiscent of VW Beetles of the 1960's.

Created as free-standing marketing unit, and featuring a unique low pressure sales environment, the brand's main appeal was to people who preferred a non-confrontational style.

Although Saturn's vehicles were plain-janes, reliability and customer satisfaction ratings have always been acceptable.

GM allowed that circumstance to support the money losing brand for 10 years while the vehicles grew stale.

Sales peaked in 1994 at 286,003 automobiles, and fell to 212,017 units by 2004.

The car-lot humanizing experiment was a failure, and lost maybe $15 billion for for GM.

In the US market, as Henry Ford famously retorted, it is impossible to make money with a small car.

The conventional wisdom says you need a broad portfolio to be profitable. I say "small" is being confused with "economy": look at the BMW mini.

But GM needed to break the Saturns out of the small-car mold, so new customer-service positioning and a broader vehicular lineup was the answer.

The disaster that ensued after the abrupt dismissal of Oldsmobile taught GM not to axe a marque prematurely, but it was die or grow for Saturn.

So the long term result was that instead of General Motors getting Saturnized, Saturn became more like rest of GM.

GM cannot afford to have Saturn engineer and manufacture unique vehicles. Saturns will henceforth share platforms and components with other GM brands.

The division became a blueprint for GM's turnaround plan.

GM began a three billion dollar rebuilding program, starting with a Bob Lutz inspired halo model, the Sky roadster.

An all-out new-product drive produced a complete line-up of new automobiles, although many were based on existing platforms from the Opel division.

The Comeback Kid

Saturn is a small part of GM, contributing just 6% of autos sold, and holding less than 2% US market share.

If the new vehicles fail, GM likely will follow. Saturn is the canary in the GM mine.

At least in the short term, the product blitz is working, Saturn sales were up 50% year-over-year in February, 2007.

Many of these sales are to former Honda, Nissan, and Toyota buyers.

In import friendly markets like south Florida and southern California, Saturns are holding their own. The new vehicles, especially Aura and Vue, are selling well.

Quality: Desperately Seeking Saturn

High customer satisfaction ratings characterize the brand.

JD Power ranked Saturn third among customers surveyed at service departments.

In the J.D. Power and Associates 2006 Customer Retention Study, Saturns ranked 20 out of 37 makes. A below industry average 40.4% of those surveyed returned to purchase another vehicle.

Higher Automotive Lease Group (ALG) projected residuals, compared to other 2007 domestic automobiles, support the comeback bid.

Qver the years, there have been several serious quality gaffes.

Production was halted on Saturn's continuously variable transmission (CVT), after many failed, although none were recalled.

Engines were historically noisy. Models in the mid 90's had some recurrent cylinder head problems which the company covered up, allowing warranty coverage to run out.

Numerous consumer complaints on Saturn, covering virtually every aspect of the car ownership experience, are posted on the web.

None of the division's automobiles are "recommended" in the Consumer Reports 2007 Annual Auto Issue.

Three new vehicles in the freshest domestic product lineup include Sky roadster, Aura midsize sedan, and Vue crossover SUV.

A recent Houston test drive of a Saturn Outlook seven passenger SUV impressed my whole family.

There are five of us, with only the wife under six feet tall. Add one large, friendly, and refreshingly knowledgeable Saturn salesman for a total of six passengers.

My wife and I sat in the third row seats, the ones usually designed for elves.

There was plenty of room for adults back there.

My oldest son, the current buyer, had to be reminded that he has no kids to haul.

Maybe this GM comeback thing has a chance.

To replace the aging entry-level vehicle, Saturn Ion, a remodeled Opel Astra coming in late 2007. It comes as a suicide-door coupe and sedan.

Saturn in Texas

Saturn remains near the top of JD Power's survey of consumer satisfaction with car dealerships.

My recent dealership exposure, after walking the I-10 motor mile in Houston, Texas, found the Saturn lot very congenial.

Yes, I confess to spending my spare time hanging out at car dealerships.

The division is adding 10 or 15 stores a year, many in smaller under served cities.

Twenty five dealerships sell new Saturns in Texas.

The once forlorn brand has an all-new sales strategy: they deliver Saturn vehicles to prospective buyers for test drives.

My problem with the no-haggle model: buyers have to pay the full sticker price.

Some dealers are getting around this by inflating or deflating trade-in values, and adding pricey options.

But our very professional salesman didn't budge when we did the "I'm starting to walk away unless you are cutting a deal" dance.

But there is an upside.

Waiting lists still exist for the hot halo car Saturn Sky.

While hefty additional dealer markup stickers adorn its twin Pontiac Solstice, Sky sells for sticker.