By Andrew Dederer
May 13, 2008 -
Does the head of Saturn have photos of important movers and shakers with goats? How else can you explain Saturn’s survival? All that’s left of GM’s “different kind of car company” is the same old spray of red ink. From import fighter to importer of Americanized Opels, Saturn’s been an abject failure for decades. And yet, GM’s has deemed Saturn one of their three “sales channels.” While there are few (non-goat-related) “image” reasons for Saturn to continue, a close look at the numbers shows its defense lies in what can be done, not what people [re]think.
There’s no two ways about it: Saturn has lost its “mindshare.” All those fond memories of American pride, homecomings, dealer barbecues, friendly sales folk and dent-proof plastic panels have faded away. Spring Hill has sprung. But then,let's keep Saturn's lost branding in perspective. GM’s “gang of three” (Pontiac, Buick, GMC; Saab, Hummer, Cadillac) doesn’t have much brand equity either.
Pontiac is defined by a handful of hot cars built because division-heads grew tired of flogging posh Chevies. Buick has history, but it hasn’t been a credible “luxe” car for anyone under 60 for 30 years or more. GMC is another exercise in “keeping the Chevies down.” And Cadillac is wandering all over the map, offering gilded pickups, bling SUVs and Nurburgring-fettled European-style sports sedans.
Equally important, Saturn hasn’t pissed in its customers’ cornflakes. Saturn remains relatively free from the incendiary “I’ll never buy a GM product again” consumer frustration with lousy build quality and disinterested dealers (a.k.a. the "perception gap"). In that sense, the brand’s amorphous rep offers a far better recovery point than the rest of GM's brands (save Hummer).
In fact, Saturn dealers have consistently exceeded their customer’s expectations. In customer satisfaction surveys, Saturn’s dealer network scores well above GM’s other brands– and many imports. Saturn dealers are carefully chosen (even company-owned where the law allows). And best of all, there aren’t too many of them.
In today’s fragmented car market, a small number (435) of single-franchise dealers (90 percent) is a very good thing indeed. While Saturn’s sales aren’t setting the world on fire, their per-dealer sales are comparable to Chevy’s (about 550 vehicles per dealer a year). In comparison, the combined averages of Buick/Pontiac/GMC (BPG) dealers rack-up about 400 vehicles sales per dealer (Toyota and Honda average well over a thousand).
Fewer, stronger dealers make controlling image and holding the line on promotions a much easier proposition. It’s worth noting that the Saturn Sky has nowhere near the lot problems of its near-relation the Solstice. With only 400-odd dealerships, a Saturn dealer would have confidence that if he asked for a Sky, he would get it. Pontiac dealers, less sure of new supplies, marked their first Solsti to the skies and killed sales momentum dead.
Saturn dealers may be strong, but it’s there are some real heavyweights in the BPG mix. The top 400 “combo” dealers– the top 20 percent– are at least as big as the Saturn dealers. So why would GM cull its BPG dealers— a rumor currently swirling around Motown– to protect a brand they’ve never really liked or understood?
Simply put, if The General kills “any” dealers, they have to kill all of them. There’s no legally defensible way to separate “good” B/P/G dealers from the deadweight. The [epic] legal bills involved in killing 2000 dealerships would be far greater if GM tried to only kill the “worst” 1500. Whole lines have to be killed en masse.
Turning Saturn into “Opel West” may have been one of the least successful product strategies GM’s launched in a long time (and that’s saying something), but it has a silver lining. It separates Saturn from Chevy. Without B/P/G, without having to worry about stepping on corporate toes or badge-engineered clones, Chevy could begin to resemble the “full” car line it claims to be– instead of diving for the bargain basement.
Saturn would have space to become… something. This website has suggested Saturn become GM’s “green brand,” offering a range of all alt. power vehicles (the plug-in Saturn Vue is scheduled to proceed the Chevy Volt). Alternatively, Saturn could become the “stylish” alternative for more discerning (and well-heeled) buyers, a sort of “Atlantic Mazda.” Yes, this would place Saturn close to the classic Oldsmobile image, before that brand was killed off. But tempus fugit.
Simple mathematics suggests it’s not time to give up on Saturn. Despite its incoherent branding, misfiring marketing, non-competitive products and declining sales, GM executives must know that the division looks more like where they want to go than any of GM’s other stores. Of course, to get from here to there, GM needs to find a way to make money off Saturn— a goal that has eluded them since January 7, 1985, the day the brand was launched See? There’s always a catch.
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May 13th, 2008 at 7:13 am
And just as importantly, since all Saturns are going to be or already are straight rebadges of Opels, it costs GM nothing to slap a Saturn badge in place of the Opel badge. Probably even cheaper than Ford’s differentiation of Mercury!
May 13th, 2008 at 7:44 am
@dwford: Good point, though the exchange rate is killing them right now. Simple enough to produce Opels stateside, once they get everything moving
May 13th, 2008 at 7:44 am
I disagree. Saturn was a stupid idea from day one. It’s mission statement was (paraphrasing) “fight Euro and Japanese cars”. Why couldn’t Chevrolet do this?
The Japanese stuck to a simple formula of “cheap, reliable cars” and only later did they add “quality” into the mix. Chevrolet could have very easily added this to their brand.
Toyota haven’t brought out a brand to compete with the “american muscle car”, they just tweak the styling of their brand to the market they are in, whilst retaining the core values of “cheap, reliable, quality cars”.
I personally, believe that Saturn was borne out of frustration. People were leaving GM to Euro and Japanese marques and Roger Smith thought that “if we create a new brand, it’ll sustain their interests long enough to stay at GM”.
If you look at a lot of Saturn’s line up, it could very easily be divided amongst GM’s (bloated) portfolio.
And another reason why Saturn is a stupid idea is that if people want to buy a Euro or Japanese car, they’ll buy a Euro or Japanese car. It’s like if VW came out with an American muscle car (i.e plenty of power and just a bit rough around the edges. Which I mean in a good way) then it would be just a plain imitation, nothing more.
One reason we buy foreign cars, is because we like that taste of something new or foreign. That’s why we buy designer clothes from Europe. It’s something different…..
Well, that’s what I think…..
May 13th, 2008 at 8:08 am
At this point, the cost to kill Saturn ($1 billion dollar dealer franchise termination payoff per Oldsmobile, unused production capacity, bad publicity) outweighs the cost to keep it alive (threadbare R&D via Opel/GMDAT + Lambda badge engineering, goodwill from the 1990’s, revenue stream as pitiful as it may be), that it’s not unreasonable to keep it going.
Problem is, where can GM make the big cuts? withering BPG the same way Cerberus is trying to consolidate DCJ, starving each individual brand down to one or two products, and letting weak dealers die on the vine?
May 13th, 2008 at 8:10 am
My very first car was an Opel Kadet which my father bought for me at a Buick dealer. It was in the shop all the time. It is the worst car I have ever had — hands down.
If you are trying to create and maintain a different kind of car company you don’t rebadge cars. You design and create your own.
My dad had a Buick Riveria with a rattle. The cause was a GM coffee cup in vent duct. GM wanted to charge to remove it because the car was out of warranty. I appealed to the regional GM rep. He laughed and asked me to send him the coffee cup. Only after multiple letters and phone calls would GM pay to remove their mistake. My dad didn’t much care. The cost wasn’t much. I was outraged at GM’s lack of concern for its quality and its customers. I have never bought a GM car and expect I never will. And I recently told this story to a retired GM Executive who was in charge of their transmissions. He turned red and said nothing.
May 13th, 2008 at 8:12 am
If you consider that Saturn was an attempt to escape their small car Karma resultant from years of Vegas, Chevettes, Citations, and 80s Cavaliers. In that sense, it has been successful. Many early buyers are still faithful, because they had S1s that racked up 150,000 miles fewer problems than a new Chevette would encounter by its first oil change. They did change perceptions. Was it enough? Nah, but it did change minds.
Were they were unsuccessful was in getting that perception change to rub off on the rest of GM, and in generating high sales numbers. Here’s the irony considering the article today. Most people I’ve known that wanted to buy a Saturn but didn’t skipped it because they would have had to drive anywhere from 30-150+ miles to the nearest dealer, and they weren’t going to do that. It’s the same thing that holds back VW and Subaru in much of the southwest as well.
May 13th, 2008 at 8:19 am
I bought a 1991 SL-1 when they first came out. It was a good car for the money. Not perfect, it had a lot of engine vibration, the radio was shit, and the brakes had troubles (so did a lot of GM cars) but I liked it. 4 years later I sold it and got 72% of what I paid for it. Awesome resale. It got 38 MPG regularly, was ergonomically well designed, and the dent proof side panels were an excellent idea. You don’t see them all dinged up and they can’t rust.
I was the first one at my company to buy one, I gave test rides at lunch. Several people I work with bought them and all were happy not just with the car, but the dealer.
An Acura driving friend told me the Acura dealer would detail his car, cleaning the rugs and treating the tires when he had it in for service. He laughed that GM would never do that. When the brakes went out and GM fixed it under warranty, they detailed it. My friend bought a Saturn a month later, trading in his Acura for an SL-2
I think they have the right idea on the dealer end. The problem is making Saturns in this country with UAW labor. Also, how can Saturn stretch their legs when hampered by RenCen?
May 13th, 2008 at 8:46 am
@dwford
And just as importantly, since all Saturns are going to be or already are straight rebadges of Opels
The Astra is a Opel rebadge. And? That’s the only Opel I see in Saturn’s range.
May 13th, 2008 at 9:01 am
Mirko—-In addtion to the Astra, the Vue is an Opel rebadge and to a lesser degree the Aura.
May 13th, 2008 at 9:05 am
The Aura has a similar front end styling to the Opel Vectra, but shares nothing else. No drivetrains, no common interor parts, completely different car on the same platform.
The Vue isn’t an Opel rebadge either. The exterior looks like the Opel Antara, but that’s a Daewoo anyway and not a real Opel. It’s as European as kimchee made to look like sauerkraut. The Vue doesn’t share drivetrains or interior parts with the Antara.
See the Opel/Vauxhall interior here:
http://www.worldcarfans.com/3060803.003/photo1005/opel-antara
Saturn interior here:
http://usnews.rankingsandreviews.com/cars-trucks/2008-Saturn-VUE/photos-interior/
The only real Opel rebadge is the Astra.