A Sad End for Saturn

The world learned yesterday that Saturn will die a quiet death, instead of becoming part of Roger Penske’s empire. GM’s sale of the brand to Penske Automotive Group fell through, reportedly, because Penske was unable to secure a long-term partner to build vehicles for distribution under the Saturn name. Stunned Saturn dealers, who’d certainly have preferred a Penske-led turnaround to Pontiac-style oblivion, are now looking at a bleak future.
Industry speculation says the best prospect for that partnership was Renault-Nissan, in which case it doesn’t seem that surprising that the deal fell through. Renault-Nissan already has a strong presence in North America via Nissan, and though Renault would like to return here (it withdrew from the United States in 1988 after selling former partner American Motors Corp. [AMC] to Chrysler), CEO Carlos Ghosn doesn’t feel that a Renault-brand return is a priority given Nissan’s position.

A far better partner for Penske would’ve been PSA Peugeot-Citroen, a very large manufacturer with no North American presence at all since 1991. We will probably not know for many years whether PSA was approached and what its reaction was to that hypothetical advance. Peugeot knows that it will need to return to North America eventually, especially now that rival Fiat has gained a foothold here.

The fallout means that Saturn will cease almost immediately – with production of all Saturn models coming to an end with the 2009 model year (which is basically over already). Saturn was already going to lose the Sky roadster and Astra compact, due to cutbacks and the impending closure of Opel’s Antwerp, Belgium plant, but the other three Saturns – the Aura, Outlook, and Vue, good cars all – were to continue for another two years until a new manufacturer would begin providing new designs to Penske’s Saturn.

This is a sad epilogue to Saturn, which was created in 1983 and built its first cars, completely separate from other GM vehicles, in 1990. In those early days, Saturns were beloved by their owners, and the brand’s alternate approach to pricing and customer service, and the car’s relatively high quality, earned the brand kudos and fans. Unfortunately GM took its eye off the ball shortly thereafter and the original Saturn design languished on the market for 12 years, though it was superficially updated twice, and it gained a lackluster larger model (the Opel-Vectra based L-series) in 1997. When Saturn customers wanted something more or something newer, there were no arrows in Saturn’s quiver to cover these needs. And since Saturn was so dissimilar to other GM dealerships and brands, Saturn owners often defected to import brands.

Early this decade GM began reinventing Saturn and by 2008, it boasted one of the best and most well-thought-out product lines in GM’s stable. Though it was way too late in the game and the brand was basically adrift, the current designs – attractive, high quality, modern designs, and the availability of Hybrids, should have spelled success, and they might have if not for GM’s gathering troubles and last year’s financial maelstrom. But even if the models had resonated strongly with the public, it was still going to be an uphill battle to regain the positive reputation Saturn had in the early days.

Getting back to the now defunct deal with Penske, the idea of selling another manufacturer’s wares under an independent brand name seemed like a good idea at first glance, but a deeper look suggests that this strategy would probably not have worked in the long term.

Such an arrangement is not at all new – before the great depression some brands often took proprietary components supplied by outsiders and assembled them into cars sold under their labels. But eventually those supplying components would cut into the margins on the cars, and if they were supplying whole vehicles (a phenomenon largely limited to Europe and before the mid-twenties), they would eventually decide that they could sell their own cars under their own name for more money. But more often than not, the larger companies, the Fords of the world, would simply crush these small-scale endeavors. Assembled and license-built vehicles simply could not keep up with the economies of scale of a large manufacturer.

Penske certainly had no plans to ever get into the manufacturing end of the business, either. License-built vehicles, often from British and French manufacturers, helped establish all of the Japanese brands except for Honda, but in those cases, manufacturing fueled by need led to success in the home market, not marketing of other people’s products in a competitive market.

The cessation of the brand will almost certainly have a detrimental effect on Saturn residuals, as the cessation of brands like Eagle, Plymouth, Oldsmobile, and even as far back as DeSoto, effected values of those cars – despite the continuing existence of their OEM’s (unlike serious orphans like Studebakers).

This is too bad, because the current crop of Saturns were quite worthy, and should’ve had a brighter future. All told, a sad end to a once-promising project.