California Autos Examiner

Wednesday, January 14, 2009

Whither Saturn?

I had a chance to speak with Rick Wagoner, Troy Clarke and Jill Lajdziak regarding the future of the Saturn brand. Here is what I found out…

Mr. Wagoner was very straightforward: GM thinks Saturn has a great lineup, GM loves Saturn dealers, but the fact is the brand has been a money loser. Given the current climate, GM has to move as quickly as it can to find a solution. Discussions are underway and a decision will be made soon. As for an exact time frame? Think months, not a year.

Mr. Clarke echoed the same themes: GM is looking to find a resolution and it won’t be a year before we find out what that solution is. Mr. Clarke did add, “Saturn dealers are entrepreneurs.” That gave me some hints that dealers might be purchasing the division from GM, but that is just a rumor, and was confirmed by no one at the company.

I asked Ms. Lajdziak a number of questions regarding her brand...

Firstly, I asked about the status of the next generation Aura sedan. The answer was that the original 3.5 timeframe for the current model has been extended to somewhere in the neighborhood of five to six years.

Saturn has looked at including at a free maintenance program for new cars, but has elected to use those dollars for incentives instead. As far as extending Saturn’s warranty to four years, Ms. Lajdziak showed little interest in that scenario, stating that GM wants to keep its warranty coverage similar across its brands. I added that it didn’t stop Saab from reducing its powertrain coverage from the standard GM 5/100,000, but Ms. Lajdziak seemed unswayed.

For the brands future: think small. A number of times during my interview, Ms. Lajdziak continued to bring up that Saturn believes its strength will be in small cars. Think Corsa and the Meriva people mover.

As for the Astra? Jill loves the car, in fact she purchased one for herself. For a next generation model, losing the exchange rate penalty would go a long way. Adding a few more American touches, like larger cup holders, turn signals with detents and more familiar dash layouts will help the JD Power surveys. Saturn was very surprised to see the 3-door/5-door model mix end up favoring the 5-door. Saturn had originally projected a 60/40 split favoring the 3-door, but ended up 75/25 favoring the 5-door. With regards to hatch verses sedan, Saturn is still weighing the merits of both. Personally, I am a big hatch fan, but I expected that Saturn was headed towards a sedan given the Astra’s sales numbers. It’s great news to hear that Saturn might stick to its guns and stay hatch. We don’t need another Aura/Malibu conflict and I’m afraid that an Astra sedan would battle it out (and lose) to the Cobalt/Cruze.

In my opinion, neither Wagoner nor Clark seemed overly enthused about Saturn’s prospects. The reasoning behind that is sound, how long do you let a brand keep losing money before you let it go? Saturn has had a complete product renaissance and yet it still suffers in the marketplace. Would a new, smaller/premium direction turn things around? Maybe, but it remains to be seen if GM has the dollars/patience to find out. A best case scenario would be for the brand to be purchased by its dealers and then new vehicle development contracted back to GM. That’s my two cents on the matter.

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