Not “a” Saturn. “The” Saturn car company. Yes, that’s right: ladies and gentlemen, Saturn has just left GM’s building. Bloomberg reports that the feel good GM division that had once seemingly overcome GM-itis, only to be sucked in by the Borg of GM’s divisional infighting, has finally achieved independence. The Penske Automotive Group has offered a bid in the low nine’s ($100 to $200 million) for a company that has gone through well over ten billion dollars and not a penny of profit. Was it all GM’s fault? Is the Saturn “no haggle”-friendly dealer formula still a winner in today’s heavily discounted world? There’s no telling. But there is a twist. Apparently the cars that may be used for this “different kind of company” will be Renault based and built . . . in South Korea. Who wants to bet that the PRC will also be in Saturn’s orbit within the next few years? Any takers?
I just saw a Saturn ad yesterday. Though that was for a television show that I had DVR’d probably a couple weeks ago.
I like no-haggle. Better yet, I like no-addons. For that reason, I like CarMax for used cars. And I despise most new car dealers.
If (when the time comes) I buy another new car, I’ll probably go through the web or Sam’s Club…
Well I’ll be double dog damned. This is a shock. I truly believed this brand was well cooked and done. [It may still be, of course…..]
I don’t get it. The original Saturn business model made sense and GM almost made it work until they didn’t due to their “GMness”
I’d like to see Roger’s business plan for this acquisition. I don’t see how selling rebranded anything makes money. Saturn doesn’t exactly have a holy grail reputation.
Saturn may be the first automotive brand to try the Home Depot style of retailing; a pure retailer with product provided by multiple suppliers. I really thought that was where Chrysler was headed under Cerberus. But then Cerberus is so last year.
Stack ‘me high and sell ’em cheap with a good warranty can move enough metal to make money. This is particularly true if the sales are incremental units for a company like Samsung which already covers the fixed costs with sales in other countries.
“I like no-haggle. Better yet, I like no-addons. For that reason, I like CarMax for used cars. And I despise most new car dealers.”
Carmax charges $149 for the tag and title processing in Georgia. The real cost in this state is $20.
Too bad design, engineering and manufacturing will be overseas. One of Saturn’s assets was that it was a small car designed and built in the USA to compete with the world’s best. Never did live up to the promise, but for me at least it was a reason to root for the company and hope to see them do well. If it’s just another mid-market import I’m not so interested.
South Korean built + Renault based = NO THANKS.
This will probably have great appeal to the “cars are just appliances” crowd. They can walk into a dealer and buy a (presumably) dependable if barely adequate car just like they can choose a washing machine at Sears. The most difficult decision will be picking a color.
How is this going ot work for the current Saturn customers all dozen of them. Like if I go and buy a Saturn today, Astra or Aura or maybe even a Vue. In 2-3 years when they are selling Korean built Renaults what do I do about warranty work or servicing. Take it to a Chevy dealer that doesn’t have a single Astra part go to the Saturn place that isn’t owned by GM and doesn’t have the old parts inventory anymore.
If American’s have even 2 brain cells Saturn’s sales should totally crash and vanish in the next few months on this news. Leaving Penske with a totally dead brand with no customers. I just don’t see how this transition is going to make any business sense and not leave it’s customer base totally screwed.
@ Redbarchetta: +1
Unless Penske’s group is getting a whole bunch of R&D from Opel or GMNA and plans to have their own designs supposedly built in America, I think they’ll soon be headed down the path that Redbarchetta describes very swiftly. I just don’t see the incentive to walk away from a Penske owned Honda or Toyota franchise and walk over to the Saturn dealer. What can this cobbled-up car company/retailer do now that Toyota, Honda or Hyundai can’t do better? What will drive people to buy a future Saturn over some other much more established brand? Great dealership experiences only will get you but so far. If the buying public never walks through the doors, what will Saturn do then?
Penske has been very sucessful at everything he has done. I wouldn’t under estimate them. This should be great to watch.
If I were King (or President) I would put them in charge of GM.
superbadd75 : South Korean-built badge-engineered Nissan sedans with a no-dicker sticker doesn’t sound so bad to me.
Walmart Motors.
Car historians will look at Saturn’s 20 year run and see cars that started out one way, twittered a little the past few years into badge engineered cars and ended as a clearing house for POS cars built by the lowest bidder.
Sad. I had an SL-1 in 1991 and thought it was a good car for the money. Had high resale 3 years later. It also got over 40 on the highway and was a lot of fun to drive.
Yeah, I’m with these guys. I always thought the original idea that GM had was sound but then just got totally creamed by GMs inability to tolerate anything that’s “different” even when it’s successful.
Saturn would have done OK as a company that made a small car/wagon, a mid-size car/wagon, and maybe a crossover to go with each one. They needed to stay plastic bodied, offer a very low number of engine transmission choices for each model, and few options.
I loved the first gen Saturns were you could tell which engine it had based on the model number. Oh it’s an SW2! It has the higher horse four banger!
I know we “all” hate transportation appliances on this site but here’s what I think. Transportation appliances for your commuter vehicle and then something cooler, more compelling, more interesting, for your “fun” vehicle.
I think the first model Renault-Samsung has marketed on an international level is the Renault Koleos. It’s pretty good CUV, and makes sense because it spared Renault the effort of making a CUV by itself.
This is the Renault Samsung website:
http://www.renaultsamsungm.com/main/index.jsp
It seems Samsung (together with Infiniti) will be responsible for the large car segment at Renault. That means: no more Vel Satis, good bye Laguna. They won’t be missed by many, although personally I like them.
Penske’s move is interesting. I see some overlap with Nissan. Perhaps Saturn will just be the place where orphans (cars the other brands don’t want to sell) from Renault-Nissan-Samsung will be marketed?
Disregard my statement in an earlier post regarding Penske’s purchase of Saturn (posted in the Hummer/Chinese government post). Sad to see if this is true that Penske will simply import crapboxes from overseas to dump onto Saturn showrooms. Damn…can ANYBODY in America build anything worth a dang anymore? Where is our industrial base? I sometimes really do fear for our nation these days…
I like my Fusion, but even it is built in Mexico…a shame that if a person even wanted to buy something truly worth it and built in America (by that I mean American nameplated, as well), one would be hard-pressed to do so. I, for one won’t be stepping into a Saturn showroom down the road if all they are peddling are cheap tinboxes from overseas…
threeer: NYBODY in America build anything worth a dang anymore? Where is our industrial base?
You can thank our obsession with rock bottom prices. Not enough fair product for a fair price. A friend called it a race to the bottom. Bottom price, bottom quality, bottom paycheck.
Frankly I prefer to buy quality even if it means I can’t buy stuff as often. Cheap crap just makes me poor. Some folks like constant new stuff. I’m just as happy to keep the old, make it last, and keep my money in my wallet/mattress/mason jar in the backyard.
Redbarchetta has a good point. Who gets stuck with the warranty liability for existing Saturns? Either way, I don’t see either entity (the “new” GM or Penske) with a whole lot of motivation to make huge investments in manufacturing or stocking replacement parts for GM Saturns.
If I were an existing Saturn owner, I’d be pretty worried. If I were in the market for a new car, I’d steer way clear.
Dang, people. Is there one person here who sees anything right with the world? If we look at our posts over the past many months, we would see that, on the whole, we don’t think any car company knows what the heck they are doing. Toyota is GM. Honda has lost its way. Porsche got greedy. Chrysler deserves to be put down. GM let the unions run riot over management, and they deserve death for buckling to labor. Ford is on life support, and Barry is doing all he can to destroy the one last vestige of American free enterprise . . . and it goes on and on.
It seems to me that Penske knows a few things, and one of them is how to save a company if Detroit Diesel is any indication. I do not think a business man with his reputation for making smart moves would just take a flier on a venture like this.
I have read countless comments here about how “car guys” need to be in charge of these companies. So, please tell me, who is more of a car guy than Penske?
Steven Lang–
You left out that Saturn will continue to purchase and retail cars from GM for some period of time.
http://online.wsj.com/article/BT-CO-20090605-706741.html
http://www.gminsidenews.com/forums/f75/saturn-penske-deal-saves-350-dealerships-13-000-jobs-80302/
I, for one, will be on the horn with my Saturn dealership today to ask about parts and service 5 years down the road.
ruckover–nicely put.
Wow, they got Roger to bite. I thought for sure he would take a long, long look……and walk away. Hope he knows what he is doing. If anyone can pull this off, he can.
If there were really enough people out there to be pissed off about any potential warranty issues would we be having this conversation? I thought the problem was that no one was buying Saturn cars (to date I’ve seen exactly ONE Astra, ONE of the new VUE and ONE of that big SUV on the road. ONE EACH.)
If anyone can make this work it is The Captain. I’ve seen far more smart cars on the road than new Saturns for crying out loud.
What Roger Penske is saying, by purchasing the hulk known as Saturn, is …
– “Thanks GM, your cars are good enough to get me to the next level. But after that, they’re crap.”
– Nice logos. Nice looking dealerships. Nice bunch of dealers. I hope they can stick around till the rebuild.
– “You guys at GM really didn’t know what you’re doing. You should have been listening to your dealers about what your customers REALLY want, and not your bean counters.”
– “Hey UAW. Sorry there’s no room at the table for you on this. Not only that, I’m willing to cast my fate and fortunes with Renault, who doesn’t exactly have a stellar record with selling products in the U.S.
– “Hey UAW, another thing … I have more confidence in the idea that these cars can be built in South Korea, and that it’s easier for governments to negotiate with Crazy Kim about his bombs than it is to deal with Gettelfinger about union benefits and wages.”
The next three years will be bittersweet for Saturn factory employees in the U.S., right? Do you think any of them might be a bit disgruntled?
A couple of questions. Why does Penske (with his money) need to take three years to get Renault designed and South Korean built cars to the U.S., when Fiat says they’ll need 18 months to bring in the 500? The smart products flew off the shelves and everyone said Penske’s a genius. Now he’s trying to call the shots with the manufacturers, so lets hope, for his sake, he winds up more like Max Hoffman than Norm Braman and the Sterling.
Marchionne and Penske are really in the same situation here. The difference is one guy is doing it with his own money, and the other is doing it with borrowed money.
And essentially, they’ll be competing exactly the same sort of customer.
I think Roger has bit off more than he can chew, this time around.
Being a successful racing car owner (in several series) and running a successful truck leasing company doesn’t mean that he can turn Saturn into the CarMax of new cars.
Clearly importing penalty boxes and selling them cheap won’t work – GM tried it, Bricklin tried it, Cryco tried it. And nobody has made it work yet. Well, okay, I guess VW made it work for awhile. :-)
So, I am willing to give Roger his due for being smart enough not to follow that failed business path, but as others have said, I’d really like to see his business plan.
Bruce
Jimal I’m not sure that you are correct on that. Sure Saturn’s sales suck right now and have sucked for a long time. But Penske bought into Saturn for a reason, it does have customers, and I’m sure he was going on the hopes of retaining those customers for future purchases while working to gain more. I’m sure the guy has a plan and maybe it’s a good one but he does have a lot of things working against his success unless he dumps a lot of money into the pig over the next 10 years.
Saturn has to maintain marketshare over the transition period while they hand the keys over and start changing product, or Penske just paid too much for nothing. How do you or anyone invision him selling these GM cars for these several years to customers that know they are buying from a brand that will no longer be supporting those products. A) they will either have to be sold dirt cheap since you are basically getting little warranty with your brand new car, or. B) Saturn will be like 2 dealerships in one, half GM half new Saturn, where all I see is dollar signs.
If this transition period isn’t handled in just the right way, all those current/near future Saturn owners wont be coming back. Penske just bought the name and dealership experience and some old GM product to keep it going for now. If the product transition turns out to be a giant cluster****, the dealership experience goes down the toilet along with the Saturn name. Sure he could rebuild the name and reputation with his new product, but that will take time and lots of it, and even more money.
Weird thing #1: Penske buys Saturn from GM. I had hoped that Penske would have purchased GM, in it’s entirety. But you can’t always get what you want.
As for warranty and parts issues, I would have to believe that there would be an agreement somewhere in the MoU concerning these things going forward. I believe manufacturers were bound by law to have a seven year supply of parts for anything they put on the road. Or it was stock the parts for seven years. Either way, at least in the short term, the GM sourced parts shouldn’t be a big deal, especially the North American sourced stuff. The european stuff, well who knows?
Finally Carlos Ghosn get his Renault entree into the North American market courtesy of Roger Penske. Who’da thunk it? Besides, this is hardly any different than GM, who sources some stuff from Europe, some from North America, etc. The Chevy Colorado is a Thai-based design, the Aveo is Korean, the Malibu is GM Europe. They already have the UN of car engineering, design and production. Roger & Co., are just using the same idea.
Weird thing #2: I was just in front of the used car dealership pictured in the photo, no less than five days ago. It’s really strange to see it on this site.
Potential snafu:
GM is discontinuing production of Saturn cars effective 2009, which I presume to mean – pretty much immediately.
I don’t even think any 2009 Astras were imported from Opel-Belgium. The cars on the lots are left-over 2008’s aren’t they?
My point is this: If it is going to take 18 months for Chrapster/Fiat to get Fiats federalized for US sale, it’ll take at least 15-18 months to federalize Samsung-Renaults for US sale. You can’t simply slap square Saturn badges on and put cars on the ship to the US.
So…. what will Saturn car dealers sell in the interim time? Left-over 2008 and 2009 cars?
Notviable.com
I concur with the “I wouldn’t bet against Penske’ observation.
I think I’d be more, rather than less, likely to buy a Saturn from Penske than from GM. Is there a reason, anything in their history, to think that his organization would leave Saturn’s Opel-buying current customers high and dry for parts and service? Even if Opel goes tango uniform in Germany, there will be parts.
Penske owns a lot of dealerships as well as a truck leasing company. From their website – Penske Automotive Group is the second largest publicly-traded automotive retailer in the United States as measured by total revenue. I wonder how large Saturn is compared to the rest of their operations?
edit re: menno’s comments – How many months of inventory does Saturn have, to carry the dealers until they have new stuff?
This is a great (short-term) move in my opinion.
In a few years I can see Saturn going head-to-head with Chevy and Kia (by that point Hyundai will have successfully moved their upper-tier brand into VW territory).
Look, what this whole Reanault-Samsung tie-in means is that they have a source of R&D and Production lined up for the short term all ready. This is great. Small, efficient, novel, nice-looking economical car designs sourced from Europe and built by exceptional high-quality factories. As a short-term solution this is great.
Penske is a Canadian company, so I think that they will naturally have a plan to transition the design and production capabilities closer to home. By that point domestic production costs should be more competitive.
This is an A++ development coming out of the GM situation in my opinion.
So is the ditching of HUMMER… give that utterly damaged brand to an obscure truck manufacturer in China… if they can wring more value out of the name then more power to them!
Underestimate the Captain at your own risk.
Study the history of Detroit Diesel (probably one of GM’s biggest sinkholes when RP took it over).
Many of us @ the General hoped and prayed for years that the BoD would dump red ink Rick and beg Penske to take over. Probably the one guy who might have saved GM.
“A couple of questions. Why does Penske (with his money) need to take three years to get Renault designed and South Korean built cars to the U.S., when Fiat says they’ll need 18 months to bring in the 500? The smart products flew off the shelves and everyone said Penske’s a genius. Now he’s trying to call the shots with the manufacturers, so lets hope, for his sake, he winds up more like Max Hoffman than Norm Braman and the Sterling.”
The idea that the Fiat 500 is actually going to be on sale here in 18 months strikes me as complete bollocks. And even if Fiatsler pulls it off, who the hell cares? What’s it going to be competing against, the Mini and the smart fortwo? Big market there.
I don’t know if Penske can be successful here, but he is at least taking an innovative approach. This sounds almost like a Malcom Bricklin-esque plan with less BS and more money behind it.
@ ruckover,
What fun is it to cheerlead?
Redbarchetta +1. This is a ballsy move for Penske. How does he bridge the gap until he can sell other manufacturers cars through Saturn dealerships, with product that has been shown to be unpopular and unprofitable?
Penske seems to be banking on the Saturn, no haggle, dealership experience and the outlet car market model being the wave of the future. I’m not so sure. I think the true innovation in car sales will come in the form of the manufacturer direct model.
This is one of the intriguing issues about the whole car-industry reconfiguration.
The 18-month minimum “wait:” If what is called for is immediate change of direction than I would think that among the first orders of affairs is for the US to create some sort of cross-Atlantic harmonization of car regulations, thus allowing Fiats, et. al. to make it across much quicker.
My bet is that Penske’s timeline is a conservative one. There is obviously a business plan underlying the decision to pick up Saturn, so having room for potential delays in there is simply prudent.
South Korea has in fact had a lot of union-management unrest over the recent years. If you think that outsourcing the South Korea is a great way to avoid unions, think again.
http://www.taipeitimes.com/News/biz/archives/2009/01/06/2003433033
http://seattletimes.nwsource.com/html/nationworld/2008031077_beef03.html
http://www.thefinancialexpress-bd.com/search_index.php?page=detail_news&news_id=4644
http://www.pensionsatwork.ca/english/pdfs/whats_new/0607/South_Korea_Experiences.pdf
Wouldn’t it be interesting if Penske decided to use only imported European disiels for all Saturns?
Even more interesting would be a merger/group investment of different auto performance companies to purchase Pontiac and remake it into what it was intended to be: excitement brand.
This is the best case scenerio for Saturn. Penske knows what the heck they are doing.
becurb :
June 5th, 2009 at 12:19 pm
Being a successful racing car owner (in several series) and running a successful truck leasing company doesn’t mean that he can turn Saturn into the CarMax of new cars.
Penske owns many car dealerships already, including the largest, most successful car dealership on the entire planet (Longo Toyota-Scion-Lexus outside Los Angeles). He knows A LOT about selling cars. If there was anybody who could turn Saturn around, it’s Penske.
It’s all fine by me. I’d consider one of these: It’s not GM any longer and it’s product is not built by the UAW. I’m in.
Of course they’ve both already reamed me via the bail out. But now
it’s about revenge. Bring em on.
Intriguing. Do we get the Dacia Logan? Will the Samsung — Renault — Nissan — Saturns be sold as Saturns? What will Carlos do with Nissan?
Is this a throw down to Marccione?
Will Ghosn get Sarkozy to spike the Opel — Magna deal?
Is this the first stage of a classic roll up? or of an explosion that will see new players in new configurations.
Raskolnikov: I, for one, will be on the horn with my Saturn dealership today to ask about parts and service 5 years down the road.
Whoa! You really expect to get the truth from a dealer on any subject??? VBG! I wish I could find a dealer of any brand that I had trust in. I really do.
Of course they’ve both already reamed me via the bail out. But now it’s about revenge. Bring em on.
Interesting. How much have your tax liabilities increased? Did the IRS send you a letter demanding extra money?
Echoing Henry Ford, they were heard to say, “You can have any colour you like, as long as its yellow.”
I remember an acquaintance being able to purchase Peugeot parts at the local dealer for several years after Peugeot left the US. I don’t think Saturn parts will be an issue.
Plus recent Saturns are incredibly generic, if an ASE certified mechanic can’t fix one he should have his credentials taken away. They don’t have millions of special parts and tools like VW does.
Renault Samsung is apparently ranked number 1 for quality among Korean domestic manufacturers.
long126mike : Har Har.
We’ll be paying for it one way or another. This is only the beginning. My statement stands.This crap is not sustainable and printing money to pay for all these bail outs to the UAW and the zombie auto companies and their suppliers will take it’s toll in more ways than some “bill” from the IRS.
Where do you think this money is coming from ? Whose money do you think this is ? If you think this isn’t going to trickle down to cost every one of us in the future via direct taxation or runaway inflation then I’d like to live where you are living.
Davey49: I have had little to no problem finding parts for my 63 Valiant over the course of neatly 30 years.
Penske is no fool. As well, Saturn customer service is highly rated. Even if he does the “buffet” style of multiple providers, again – he is no fool.
If you check out the Renault Samsung Wikipedia article, you will see that its cars are rebadged versions of Nissans, essentially, the Versa, Sentra, and Altima. It is not obvious where Carlos is going with this, but I am sure that he and Roger have a plan.
@ DweezilSFV
I’m not sure where you get these “printing money” ideas, but M1 is lower now than it was last December. The total public debt also grew 50% faster in the last 4 months of 2008 than the first 4 months of 2009. And as for inflation, the real risk we were facing recently has been deflation. Prices declined between this April and the last – the first time in 55 years that has happened. The recent run-up in energy prices has tempered that risk considerably for now.
You may not know or recall this, but the former president’s first budget proposal in 2002 worked on the assumption of a $5.6 trillion surplus by 2010. Instead, his 8 budget years (including the one we’re currently in) will have more than doubled the public debt — well over a $10 trillion difference from claims and projections that were used to justify the fiscal policies which followed.
When one takes into account the extreme drop in tax revenue of $450 billion (which is natural in a deep recession), putting former “supplementals” onto the budget (instead of only accounting for it in the public debt ledger), and also accounting for the fact that $1 trillion of this year’s projected on-budget deficit was clocked in before Inauguration Day, then it clarifies the situation.
but the former president’s first budget proposal in 2002 worked on the assumption of a $5.6 trillion surplus by 2010.
Oh, I guess the Laffer curve didn’t quite work out for him.
–
When one takes into account the extreme drop in tax revenue of $450 billion (which is natural in a deep recession), putting former “supplementals” onto the budget (instead of only accounting for it in the public debt ledger), and also accounting for the fact that $1 trillion of this year’s projected on-budget deficit was clocked in before Inauguration Day, then it clarifies the situation.
Yes, but those aren’t real conservatives. Real conservatives are manly piraty men who’ll take deflation right to the balls without even a peep.
Also, we need to have free money, not this fiat crap, but based on real commodities (like the paper they’re printed on, or gold nuggets), just like somalia.
The SM3 is based on the Renault Megane.
About new cars for Saturn. I assume that GM and Opel will build new Saturns when asked. At least for the cars who’s badged engineered twin is kept in production
Redbarchetta: What Roger is getting is a nationwide dealer network infrastructure for a (relative) song and a brand name that has some following. There are plenty of Saturns out there and my guess is that by the time this is all said and done most of them will be out of warranty anyway. I believe sales started their drop off the cliff when the Ion came out.
I think that this has a lot going for it. First, the federal government made it clear in March that they were guaranteeing the car company warranties. Warranty work is a profit center for dealerships, so it isn’t a problem for Penske — he’s going to make money on it.
The Saturn dealers got high marks for customer satisfaction, so they are starting out with with a good marketing platform at salvage pricing.
GM should have considered *keeping* the Saturn dealerships and used it as a relatively low cost “Green” brand. Or something.
Anyway, the idea of splitting manufacturing and design/sales might work extremely well. Think of Apple. They no longer manufacture anything but they design and source every product with a coherent design philosophy.
There is a lot of excess manufacturing capacity worldwide, which leads me to believe that getting product at acceptable price point is very doable.
Your typical Saturn buyer was there for a no haggle experience and was looking for “car as appliance”. Starting with this concept, I think a lot of buyers want less choice. Let Penske pick a single “Saturn” trim level with the cars reasonably well optioned, a couple of colors, etc. I’ve always liked Honda/Accura for their no option philosophy. They have gotten a little away from it with too many trim levels (Like LX, EX, then with/without 6, leather or no leather, and nav or no nav). It is still a lot easier than other manufacturers with the various packages.
Saturn probably attracted a lot of Vegans, so they could ditch leather part of their design philosophy. The single trim level would eliminate the agony of the upsell. You walk in and Roger and his design team has a couple of colors that work with the particular model, a single, practical trim level, etc. This would be a huge expense savings, as you would need much less inventory, etc. And an attractive price.
Obviously, cars are a lot more complex than computers (excluding the operating system), so the idea of company owned design and retail centers (Apple) — without ANY manufacturing just might work.
I don’t know that much about the car business, but I could see this working.
Also, FWIW, Penske has a logistics firm. http://www.penskelogistics.com/
Outsource the capital intensive part of the business and keep the relationship with the customer — the dealers — and the design.