This afternoon the Penske Automotive Group announced that its bid to acquire the Saturn brand had fallen through. As a result, General Motors will be discontinuing the brand.
This is sad news. At one time Saturn was a wonderful brand. General Motors created Saturn in 1990 in a bold effort to compete with the imports. Saturn was a breath of fresh air in the auto industry. The dealers provided excellent service and there was no unpleasant haggling. The cars were small, practical and affordable. The labor force was a partnership between management and labor. The marketing message was emotional, not technical.
And for a while it all worked. Sales soared and, perhaps more importantly, Saturn became a unique brand. People felt a connection to Saturn; it wasn’t just another General Motors car brand, it was special and unique. Saturn owners went to reunion events at the factory. They were part of a family, part of the brand.
As the years went by, however, General Motors neglected the brand. Saturn, starved for investment, gradually eroded. As GM’s financial troubles mounted it became very clear that Saturn had no future with the company; GM had to focus on a few big brands.
For a while it appeared that Saturn would survive; earlier this year the Penske Automotive Group offered to buy Saturn. Penske would outsource manufacturing and just focus on marketing and sales. This was a bold move and a hopeful one for Saturn.
But today Penske announced that it couldn’t secure manufacturing capacity and couldn’t complete the purchase.
This is a sad day for anyone who appreciates brands. One of the special ones is going away.
While being a GMer for the last five years (no longer), I asked to those that were involved with Saturn from the beginning and lately how things happened. As I understand, GM initially allowed the Saturn organization to be independent from the rest of GM, which allowed them to do many things differently. As GM started looking for savings, a good way to do so was to centralize processes into a big organization, instead of one for each brand. This had many benefits in terms of cost and quality controls, but there are perils too. I have found that GM (probably due to politics and its size) looses the perspective of what needs to be done, the most important and fundamental aspects it needs to protect. In its centralizing efforts Saturn lots its uniqueness. Lack of product investment was fundamental too.
Another example of losing perspective took place recently. We can all observe that in the early 2000s, GM decided to change the Saturn brand offering. “We will take the brand a bit upscale”, we heard. Good products were allocated to the brand. The Aura, Sky, Vue, Astra were all more premium than what initially Saturn had with the LS or more recently, the Ions. You may remember the commercials where somebody would walk into the dealer and think “Did I come in the right place?” The brand would not support these more expensive vehicles, but GM did not have the resources to keep supporting the brand. My question is “Didn’t GM know that to change the positioning of a brand like Saturn, you need years of investment and hammering to everyone repeatedly what the brand was about? How long does it take to establish a brand? As I say, I honestly believe that GM sometimes overlooks the basics of creating successful brands. I would ask today what is it that distinguishes Chevrolet and the other GM brands? What makes them unique and will be with the brand for years to come? At a point, GM decided to put the symbol of excellence in all GM products. A small tag can be found in all newer cars in front of the front doors. But if we are using the GM brand, we must know what it is we want it to be, right? But what is it? Also, Does having a GM tag helps the Saturn, the Saab brands? or troubles them?
This is what makes me sad; that even today, GM shoots to different directions without having a clear idea of what it is its brands really are.
I remember espousing the merits of Saturn in a paper I wrote while at Kellogg! It was indeed a great brand and a bold effort from GM. Unfortunately (and confirmed after dealing with Saturn corporate employees), GM “milked” the best practices from Saturn and therefore eroded the distinction that was such an important part of the brand to begin with.
It is sad on many levels as it was the first effort for a car company to make that leap in creating an emotional relationship outside of just “status”. It was like the real true blue friend versus someone you keep in your inner circle to “prop” you up. Maybe this kind of relationship is not for cars, only for phones and computers. Seems pretty similar to me, but it takes funding to cultivate and I am sure it was the same old story of getting side tracked with what the competition was doing and losing confidence in doing something different.
If they did park Saturn temporarily with Penske to keep it out of Chinese hands, what is that really saying about the competitiveness of our car industry? It’s concerning to think we are so desperately playing defense.
Saturn is sad but I will miss Pontiac more. Still remember the bad black Trans Ams of my youth. I think GM was not particularly motivated to sell these brands, and only put Saturn up for sale because they were forced to in bankruptcy. If a Chinese company bought Saturn, they would have had a fast track into the US market to compete with GM. (Now for fun let’s start a conspiracy theory that Saturn was “parked” temporarily with Penske to keep it out of Chinese hands!)
It was interesting that GM refused to even put Pontiac on the block. Imagine if BMW wanted a moderate priced performance brand to slot in between Mini and BMW in price. Pontiac riding on last generation BMW mechanicals, like the Chrysler 300 did with the Mercedes E-Class, would have been awesome.