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Saturn dealers hope to spin-off brand into new company

02/18/2009, 4:50 AM

By Nick Aziz

Saturn dealers, hit by the news that General Motors plans to axe the struggling brand, are attempting to orchestrate a spin-off from GM, according to the Wall Street Journal. The plan involves branding vehicles made by foreign automakers as Saturns. GM announced today all Saturn models will cease production by 2011.

Dan Januska, the owner of Saturn of Scottsdale, told the Journal a plan on the drawing board would involve selling vehicles made by Indian or Chinese manufacturers. “There are not a whole lot of alternatives,” said Januska, a Saturn Dealer Council member. “Someone is going to see the value of us and I don’t know who it will be.”

If Saturn separates from its parent company ahead of the planned 2011 closure, it’s unclear if GM would continue to supply vehicles to the firm. It would likely take two or three years to prepare Indian or Chinese cars for U.S. sales.

During GM’s press conference late Tuesday, CEO Rick Wagoner said it’s possible another venture will find value in the brand’s dealer chain. “It’s a good distribution network. If someone comes up with an offer, we’re very open to that.” Wagoner said.

If Saturn is to become an independent company, plans are likely to come together within the next two months. Execution of any strategy is likely to take years, however.

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02/18, 7:12 AM

posted by:

LQQK TwiCe

If Saturn hasn’t been a profit for 20 years what makes them think that spinning them off will help them become profitable. Is it just to prolong their job until they can find a new job?

02/18, 7:40 AM

posted by:

VictorRaikkonen

It was always a crap brand nearly wholly ignored by GM… then after nearly twenty years of said neglict they decide to try to produce vehicles people actually took notice to. However, like with nearly all GM products it has been copies across three brands and the only difference between them is the sheet metal. ****ing pointless.

02/18, 7:53 AM

posted by:

oldraven

They should buy Opels from GM at fleet prices, then rebadge them at the dealer. HaH!

02/18, 7:56 AM

posted by:

bauer100

yes, because GM is the only company that has “copies with sheet metal differences” across all its brands.

02/18, 8:25 AM

posted by:

A4

at least they have the will to survive, and plan on doing something about it

02/18, 8:39 AM

posted by:

Gundy

A4, yes! The dealers taking a chance is what it’s all about. They can’t make their own cars without manufacturing plants, so, rebadging foreign makes, like GM’s been doing for the last few years anyway, might be the answer.

02/18, 8:45 AM

posted by:

ricky_b

Sad, because of all GM divisions, this is the one I could identify with the most since most of their products are now Opel based. My only real beef is that GM came up short. The car I wanted to look at was an Aura (based on an Opel Vectra). They did a good solid job but GM refused to let the price point go about $30k because it would cross into Buick territory (duh… how about the Saturn Outlook?). Anyway, because of the price limitation, I couldn’t get features that I wanted which were available on a Passat, so I went with the Passat instead and have been happy with it.

Bottom line, GM never put the identity focus enough into Saturn for the public to truly embrace it. So they floundered and now apparently are heading for the heap.

02/18, 8:48 AM

posted by:

HoosierHero

I think they can be successful. They just can’t try to compete in the mid $20k range. Keep it simple and keep the price in the range of Civics. They used to be the little “green” company before “green” was in vogue.

02/18, 9:00 AM

posted by:

MercMark

Yeah I’m going to buy a f***ing Chinese made car. NEVER IN A MILLION YEARS!
It would have lead laced paint, trim, plastics and the AC would leak asbestos into the car.
But if you got in an accident all your worries would be over…

02/18, 9:01 AM

posted by:

idrinorbarsaku

ricky_b,
you made a damn fine decision not sticking with the aura and got the passat instead. I used to drive a 2007 aura xr. I drove it for about 1 year until i had enough of it and got the ‘08 passat with the komfort. Now my dad drives the aura and it is in the dealer at least 2 times a month…good thing it’s a lease!

02/18, 9:12 AM

posted by:

DCG3

Screw re-badging just change the signs at the dealer to vauxhaul and sell vauxhauls gaurentee they will sell better than saturn also a good way to bring some diesels into the US market.

02/18, 9:21 AM

posted by:

DCG3

*bring some lower price point diesels that will sell aside form the higher price point diesels, but no US buyers walk into the MB showroom and say I want the diesel one… so if you sell a vauxhaul diesel and market it as clean and green the eco hippies will buy it for around 17 k easy

02/18, 9:23 AM

posted by:

idrinorbarsaku

DCG3,
sounds like a great plan. Wouldn’t they have to pay up to start selling their cars? vauxhauls aren’t even allowed into the US….well, OBAMA is president, maybe he can change that too!

02/18, 9:28 AM

posted by:

Veda

Actually thinking about it if they can sell chinese cars for really cheap… it may just work in this harsh economy.

02/18, 9:46 AM

posted by:

DCG3

idrinprbarsaku if your labeling me as an OBAMA supporter then think twice………………… nothing can piss me off more than our current leadership

02/18, 10:09 AM

posted by:

jandrews90

The think the only Value the saturn brand holds to potential buyers is their dealer network.They don’t have any chance of starting their own company by rebadging other cars, the most likely outcome is that a foreign company will just buy their dealerships for their own cars.

02/18, 10:32 AM

posted by:

MDtopdad

Well DCG3,
As far as I can see the only problem with your plan is that Vauxhauls are strictly right hand drive. Perhaps you meant an Opel, since the rest of Europe drives them and they are identical except for drive formats

02/18, 10:45 AM

posted by:

wbent

Never happen.

02/18, 10:47 AM

posted by:

bigdawg

Turn the Vue into a Buick, kill the rest. I can’t see Saturn surving selling cars built in China or India…

02/18, 10:49 AM

posted by:

mayer_ray_nagin

If Saturn starts selling Chinese cars they should change their name to yoUranus.

02/18, 10:57 AM

posted by:

02WRXPSM

Saturn cars have always been crappy, underpowered garbage. Their single claim to fame was the plastic side panels — not exactly something to brag about, a Tupperware car. Good riddance and may I never see the monstrosity that is the Ion again, especially fools in the Redline versions who think they are fast.

02/18, 11:26 AM

posted by:

Thunder Chicken

This is very likely the opportunity that China and/or India have been waiting for. When Hyundai, Kia and Daewoo first came to these shores they had to start from fresh. Didn’t work out so well for Daewoo, and it took decades for Hynduai to become a real contender. GM putting the entire Saturn dealership network up for grabs opens a huge door for China or India.

…And yes, Chinese cars are absolute CRAP, but so were Hyundai, Kia, and Daewoo (and Honda, and Toyota, and Nissan, and Mazda, etc) when they first came over here. For the first few years they’ll sell crappy bottom-feeder throwaway cars at rock bottom prices. As they sell, they’ll learn how to build better cars that meet American expectations and expand into different, more profitable segments. Anybody who doesn’t think this can (and will) happen is a fool. If Hyundai can go from selling the Pony in 1984 to the Genesis in 2009 WITHOUT a ready-made dealer network waiting for them, imagine what China will do with one.

This is the one and only way that selling or closing Saturn will come back to haunt GM: They’re opening the doors to even more competition.

02/18, 11:27 AM

posted by:

shaver

US needs forward thinking leadership. Should we as US citizens be buying our durable goods from China and India? In reality these coutries want to beat, buy, own and control us. While I have never been one to promote protectionism it seems it is time to start taking control of our countries future and wealth. If it is not too late. Our trade agreements should atleast mirror those of the country we are dealing with, Korea, China and Japan all limit US access to their markets, WTF.

02/18, 11:29 AM

posted by:

johnnycanuck

Turn them all into comedy clubs. I can’t think of a bigger joke than Saturn.

02/18, 11:32 AM

posted by:

Thunder Chicken

…and if anyone thinks the American public will refuse to buy Chinese product, look no further than Wal-Mart, the one retailer doing well when everyone else is hurting. People can spout patriotic all they want, but for 99% of the population, patriotism ends at the wallet. If a Chery or Mahindra is available for 60% of the cost of a relatively comparable car people will flock to the Chery or Mahindra. And if those companies commit to improving their products as they mature in the market they will eventually become household names just like Honda, Toyota, etc…

China is coming. Fear it, deny it, pray against it all you want, but it’s coming. And when it does, it will be a day of reckoning for all other manufacturers, domestic and import.

02/18, 11:45 AM

posted by:

The Stig

What else can Saturn do … say nothing and hope buyers will still flock to their stores?

02/18, 11:46 AM

posted by:

Need more oil for GM is an idiot

Thats all we need junk from china in this country and then rebadged as saturn junk. This is a bad idea all togather just let saturn die already.

02/18, 12:06 PM

posted by:

zfenderguy

To whioever came up with the idea illustrated above: Good luck with all that. That idea sucks. All these people talking about bringing in Chinese cars and selling them at Wal Mart or Saturn lots or whatever forget that the Chinese can’t even make a vehicle capable of US certification. maybe they can sell Tata Nanos at 7-11 however.

02/18, 12:12 PM

posted by:

TomF

Chinese products stand for value, not quality. People are willing to buy an $11 Chinese radio that falls apart in two years, but not an $11,000 Chinese car that falls apart in two years and maybe gets you killed before then when the steering wheel comes off on the freeway. The Saturn dealer network isn’t thinking strategically, they’re thinking only about preserving a distribution system by filling it with some product, any product. Never mind that the public will vomit all over said products. What a stupid idea.

I like the Vauxhall idea though. I like Vauxhalls. Too bad GM won’t allow the Saturnites to compete against GM with GM products.

02/18, 12:29 PM

posted by:

oldraven

I think bringing Vauxhaull to the US is about as likely as me growing three tits on my back. Remember that their viability plan includes shrinking from 8 divisions to 4. Adding a division right now would be suicide.

02/18, 1:10 PM

posted by:

RaineMan

Well… there’s one down. Now let’s see Saab, Hummer, and GMC follow suit.

02/18, 1:27 PM

posted by:

Blakkarr

That is a rare thing. A division becoming it’s own company without backing from the parent company.

It might be possible if the people taking SATURN have a business plan that works. I could see SATURN being forcibly turned around into a new stand alone company, but they need to focus on only a few cars to start and offer something new, whether it is a focus on Hybrids, Performance, or Volkswagan-like compact luxury and sport.

That said I was afraid this was going to happen to SATURN after OLDSMOBILE got the shaft. No solid mission, lacking budgets, no goals. OLDSMOBILE was stripped of everything but its personality by the end. SATURN is going through the same decline. Early SATURNS were cheeky, but you expecting them to improve, but they are consistently the cheapest version of anything sold by GM and it shows by another division. What every happened to being the small car division. With that SATURN should have been courting the youth market even offering Compact sports cars like the ION Redline Rally.

Whatever.

Aside from some nicely futuristic styling, SATURN really was ignorable. I won’t miss them. I still lament OLDSMOBILE, the division that deserved to survive over BUICK and PONTIAC.

02/18, 1:36 PM

posted by:

ricky_b

idrinorbarsaku – ouch. sorry to hear about he Aura problems. I ended up with the Passat Wagon (yes, I really wanted a euro wagon). Mine is the VR6 which came with 4Motion and Sports package. Have to say it’s been a blast to drive in the four months I had.

02/18, 1:48 PM

posted by:

RaineMan

Saturn should sell its dealer network to the Indians… that way they have a place to sell the Tata Nanos and Appalachan pickups.

02/18, 2:17 PM

posted by:

idrinorbarsaku

i wish i could have gotten the vr6 with awd, but i am just fine with the 2.0 and the sport/kumfort package that it has. it just came down to the gas, and me being a student, i would much rather spend that extra money on something else:)

02/18, 2:47 PM

posted by:

danzman

woohoo! I can’t wait to purchase a Chery Saturn…..

02/18, 3:50 PM

posted by:

Flipper

Just what everybody wants to buy ,unproven product sold at a non-discounted MSRP.

02/18, 4:27 PM

posted by:

JakeK66

Vauxhaul ? Why not sell them as Opel since Opel is the same thing… Vauxhaul is made in right hand drive only countries, so Opel makes more sense. I said that from day one when they brought in the Aura. I quoted saying “Why not just change Saturn to Opel, since they are using their products anyway?” Saturn was never going to succeed selling Euro cars, no matter the economic climate. It’s always been known for cheap plastic cars, even now with a stylish lineup, people still see them as that.

Renault may now have the dealer network they need to bring their cars to the US again… Let’s just wait and see.

02/18, 4:28 PM

posted by:

athens

Blakkarr:

Saturn doesn’t have separate ownership from GM. GM shareholders own Saturn. Saturn doing business as a division of GM will simply wind down.

It’s a dealership network that claims it has plans to become licensed distributors of cars made by another manufacturer.

It is analogous to what Malcolm Bricklin did with Yugo back in the 1980s.

Or more recently Penske Automotive became the US licensee to distribute the Smart Car in the US.

Penske is a huge conglomerate with truck leasing and 253 car dealerships. The company’s stock is traded on the NYSE, so they obviously had the capital to make the Smart successful in the US.

Bricklin flopped with the Yugo. He didn’t have enough capital.

Question is whether a network of some car dealers, which will have no product to sell pretty soon, can raise enough capital to be able to acquire exclusive distributorship rights to market and sell a foreign made car in the U.S.

02/18, 4:39 PM

posted by:

global_lightning

And what would GM gain by selling to the Chinese or Indians? A new, low cost competitor in its home market. Saturn will be declared dead by the end of the month.

02/18, 4:39 PM

posted by:

Thunder Chicken

China can’t make a car that meets US standards *right now*. Give them a few years. Does anyone honestly think that after those Chinese cars very famously folded up like tinfoil during government testing that the Chinese manufacturers just said “Oh, well, forget it then”? No, they took their wreckage back to China, examined it, and are at this very moment making changes (or clean sheet designs) that will meet those standards. Yes, they’re probably using political activists as crash test dummies, but the cars will eventually be built to North American standards. Anyone thinking otherwise has their head up their ringpiece.

GM and VW must have at least some faith in Chinese manufacturing ability. They’ve got Chinese people building cars for them. Many Chinese-made components are already on the road in North America, including powertrains. The Chinese are famous for reverse engineering others’ work and copying it. How long does anyone actually think it will be before this happens with cars?

People gambled on Hyundai, Kia, Honda, Volkswagen, Toyota, Mazda, and all the rest when they first started selling cars here, too. The first offerings of every one of those manufacturers were cheap, crude, throwaway cars. They cost much less than their more accepted competition, and they succeeded. China will do the same. The Reds are coming. Get used to the idea.

02/18, 4:42 PM

posted by:

Thunder Chicken

Athens: A big reason the Yugo flopped is that Yugoslavia itself flopped at the fall of the iron curtain. When communism fell nobody bothered showing up for work at the Yugo plant. I don’t see China flopping any time soon.

02/18, 5:45 PM

posted by:

athens

Thunder Chicken:

It is true that no one showed up to work at the plants when the UN embargoed products from Yugoslavia during the 1990s breakup of Yugoslavia and the rebels and then NATO bombed the plants.

But investors that helped broker the deal to set up a Zastava franchise in the US were more interested in selling military equipment that Zastava also made than cars. Tanks and armored personnel carriers are more profitable than cars.

02/18, 6:29 PM

posted by:

Blakkarr

athens @ 02/18, 4:28 PM

That only shows how little I care about Saturn. But maybe the those Stockholders will try to make some lemonade from this lemon.

One can hope but, just not this one.

02/18, 7:01 PM

posted by:

zoomzoomer

I’m sure one of the Chinese or Indian manufacturers will swoop in hoping to acquire the Saturn dealer network.. but there’s no reason to rebrand their own vehicles as Saturns, since Saturns never really sold anyway.. not to mention the brand’s reputation is forever tarnished by being associated with GM.

What could it hurt if GM were to sell the next Astra and Aura (Insignia) at Buick/GMC dealers, either under the Pontiac or Opel name.. if they had just dumped Saturn a few years back and sold the Opel products as Pontiacs, they probably wouldn’t be in this mess now.

02/18, 7:50 PM

posted by:

Blakkarr

zoomzoomer,

If GM had put more effort into small and compact cars back int eh 1990s when they really had the chance to, they would not be in this mess now.

But I do agree with you, fully.

FORD tried to spin off their European cars as a new division, MERKUR, and that failed miserably. I can’t recall a single ad or commercial. MERCURY was a strong division then and getting to Euro RWD cars that were at or near the top in their class in EUROPE at the time would have been a major boon.

GM shipping their European small cars as Chevys and Pontiacs would have been a better move than starting up the “not GM ” Division, which had a promising future but tanked due to typical DETROIT indifference to smaller cars despite a clear evidence that such cars can be a solid bedrock for future buyers and income for the company..

Maybe now GM will be forced to do just that, ship Euro models as Chevys and Pontiacs. I’d love to get some of those Small Opel sports cars

02/18, 7:57 PM

posted by:

davek4

Foreign Cars branded as Saturn? Thats kinda weird. I don’t know if that would be a good idea. There brand doesn’t have that name value as other foreign brands. Why not just start another brand?

02/18, 8:00 PM

posted by:

TomF

Umm… davek4… that’s exactly what they’re doing already. Except for the Outlook and Sky Saturn is all foreign cars branded at Saturn.

02/18, 10:40 PM

posted by:

GMmalvado

Hmm… No matter what happens, kudos to the dealers for trying. But I just can’t picture this lasting.

02/19, 1:43 AM

posted by:

cire_1wb

It would be great if they could spin off and maybe cut a distribution deal with Puegeot/Citroen to sell some of their products here. Both brands have some interesting products. I suppose this is wishful thinking, at best. Saturn will more than likely be an outlet for cheap and horrible Chinese/Indian deathtraps.

02/19, 11:19 AM

posted by:

Zcarsales

The news deeply saddens me. Many of my friends have been struggling for close to a year now. GM has consistently abused this brand. If this venture is successful, I hope that they spank the crap out of GM in market share. Its unlikely this idea will thrive.

02/20, 8:06 PM

posted by:

Gundy

Isn’t the Sky an almost 100% exact same thing as the Opel that it’s based on? At least the Solstice has a different body, the Sky is exactly the same as the Opel. But, It’s way better looking too as far as I’m concerned. I’m all over “low-powered tupperware” cars. My 2002 SL-1 gets 40+ mpg and has no door dings with its “tupperware” body, even though it was a 5-star crash rating. What’s not to like about that? Not everyone needs to drive a 14 mpg ‘87 NASCAR-approved Camaro just to be a rugged manly man.

02/22, 1:29 PM

posted by:

idrinorbarsaku

DCG3,
nothing can piss me off more than the last 8 years with BUSH!!!

02/26, 12:34 PM

posted by:

jackjimturkey

Be a shame to see Saturn die.
I hope someone else can make it relevant.

03/12, 11:09 PM

posted by:

HyundaiSmoke

Think about it a Chinese or indian car company can buy Saturn, then sell Saturns from their dealerships, and bring over Chinese or Indian brands here, and sell them from the Saturn Dealers. They can lure Saturn Diehards into the Saturn dealers to get people to look at a Next Generation Aura. Which would be a wild looking (good or bad you choose) Chinese Executive Sedan with copied Toyota or Hyundai technology, with a Saturn badge on the hood to lure people in to look at, if not buy, the more efficient Tata or Chery cars 50 yards on the other side of the dealer. Yay!!!!!!!!!!!!!!!! China!!!!!!!!!!!!!!!

 
 
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