Saturn: From Which Planet Is Business Week?
There is an old adage on Wall Street: If Business Week calls a trend, sell and run. TTAC has followed the dalliances between China and Detroit for many months now. The rumors ran the gamut from SAIC buying all of GM to a small Chinese manufacturer picking up Hummer. So far, nothing materialized. Now, Business Week jumps on the bandwagon: “The last hope to stop General Motors Corp.’s wounded Saturn brand from falling out of the solar system appears to rest with some unknown automaker building cars for the dealers to sell. Chinese and Indian automakers, which have made noise about entering the U.S. market, would be the most likely suppliers.” A bit belatedly, Business Week made some calls.
They found Saturn dealers receptive to the idea. No wonder: selling Chinese cars beats closing a shop that’s not protected by state franchise laws. Writes Business Week: “Carl F. Galeana, who owns two Saturn dealerships in Michigan, said he would welcome a buyer from China or India, as it would keep the company going and bring innovation to the product line.”
Then Business Week called India. They could have saved the long distance money.
Predictably, Tata Motors spokesman Debasis Ray said the company wouldn’t be interested in the Saturn brand or its distribution network.
“We are happy as we are,” he said. Which was an exaggeration. Overlooked by Business Week: Tata is hanging on for dear life.
Mahindra declined to comment. They probably are sick repeating what they have said as early as December: They don’t have the money.
As for Chinese manufacturers to ask, Business Week could only remember BYD. They didn’t return the call.
Now why on earth would a Chinese or Indian car manufacturer be interested in buying Saturn of all people? According to Business Week logic, “Saturn’s dealers, with laid-back salesmen and no-haggle pricing, often match luxury brands’ scores in independent customer satisfaction surveys. Their locations could be a ready retail network for a foreign automaker to come to the U.S.”
There will be no shortage of willing car dealers when a foreign automaker will set foot into the U.S. What Chinese automakers need is a recognized brand with some technological know-how that helps them overcome their (real and perceived) deficiencies in the safety and quality dept. If they don’t want Volvo or Saab, why would they want Saturn?
Bertel Schmitt comes back to journalism after taking a 35 year break in advertising and marketing. He ran and owned advertising agencies in Duesseldorf, Germany, and New York City. Volkswagen A.G. was Bertel's most important corporate account. Schmitt's advertising and marketing career touched many corners of the industry with a special focus on automotive products and services. Since 2004, he lives in Japan and China with his wife <a href="http://www.tomokoandbertel.com"> Tomoko </a>. Bertel Schmitt is a founding board member of the <a href="http://www.offshoresuperseries.com"> Offshore Super Series </a>, an American offshore powerboat racing organization. He is co-owner of the racing team Typhoon.
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Ingvar: what you said is absolutely true, yet GM gave Saab protected status because they believed it was their way to get a premium brand into Europe. I've read that when asked about Saab's place in the GM heirarchy that the execs never questioned the wisdom of having Saab and keeping it, the unspoken response being the reporter was stupid for asking. And yet they spent nothing to develop it. Or Saturn. Unless it was to shove another SUV or clone crossover or minivan or an Opel based derivative into the line, they didn't spend much on the other brands either. Totally clueless. The question is why did they hold on to them for so long ? I think it's both our answers. Profit sometime in the future. Via the GM way of business as usual for all brands.
Saturn as a future business proposition is no more relevant that your local neighborhood lemonade stand. Neither is capable of creating their own product line. As a trainwreck saturn is going to be an interesting study of a failed business plan.