At GM, Lutz's Bets Starting to Pay Off

[Hurricane]

At GM, Lutz's Bets Starting to Pay Off
Saturn helps boost GM's February sales but Ford and Chrysler dip deeper. Toyota and Honda continue their hot streak
by David Welch and David Kiley

In an otherwise bleak month for Detroit's carmakers, General Motors (GM) had a strong month powered by a big boost from its rekindled Saturn division.

The long-starved Saturn brand saw sales rise 60%, helping GM post a 3.5% gain in a flat car market. New models like the Saturn Aura midsize sedan—voted the North American Car of the Year in January—and the Outlook crossover sport-utility vehicle seem to be winning converts. And there are signs that import buyers will give the brand a look.

Growth at Saturn is a sign that GM Vice-Chairman Robert Lutz's new cars are starting to gain traction with consumers. "Saturn finally has some new cars to sell," says longtime industry watcher Mary Ann Keller, who does consulting work and sits on the board of dealer Lithia Automotive (LAD). "They always had good dealers; it was just a question of getting product."

Detroit Rivals Falter
Make no mistake, GM's problems are far from solved. Sales are down more than 6% so far this year. And the boost in February, when retail sales rose 11% for GM, was helped in part by 0% financing deals offered in the middle of the month.

While GM had a pretty strong month, its crosstown rivals Ford Motor (F) and DaimlerChrysler's (DCX) Chrysler Group both took a hit. Ford's sales fell 13% and Chrysler's were off 8%. Meanwhile, Toyota (TM) keeps surging ahead with a 12% jump—record sales for February. Honda (HMC) sales rose 3%. Kia was up 13.5%. Mitsubishi was up 22%. Audi was up 37%. BMW was up 15%.

Running with the Imports
Lutz has long said that Saturn was GM's best bet to win import owners, so he gave the brand the Sky roadster and Aura last year, as well as the Outlook, in a play to win market share back from the likes of Honda, Toyota, and Nissan (NSANY). Soon enough, Saturn will replace the woeful Ion compact with the Astra, the popular compact sold in Europe by GM's German Opel brand (see BusinessWeek.com, 12/14/06, "For Saturn, the Time Is Now").

Edmunds.com says that of the top 10 vehicles cross-shopped by Saturn buyers across the brand's lineup, nearly all of them are import nameplates. No other GM brand comes close to that level of cross-consideration. Conversely, says online car shopping site Edmunds.com, Saturn is seeing huge spikes in reverse cross-shopping as well; that is, shoppers who had Honda, Nissan, Toyota, and Volkswagen on their lists but decided to look at a Saturn model as well. Saturn reports double- and triple-digit increases in reverse cross-shopping figures with the new vehicles it has launched.

Saturn is also doing well on the West Coast, traditionally hostile territory for domestic brands. Saturn says its No. 1 dealer in February, based on sales volume, was in Los Angeles. Four of the top 10 Saturn dealers are in the L.A. area.

On the Shopping List
But Saturn's total sales volume is still relatively small when compared to GM's bread-and-butter Chevrolet division. Chevy sold 187,000 vehicles last month to Saturn's 22,000. But Saturn sells mostly to retail customers, as opposed to other GM passenger car brands that do significant business with rental agencies and corporate fleet customers.

Though Saturn's numbers are small—just 1,900 Outlooks and 3,800 Aura sedans sold in February—there are reasons for Saturn to be optimistic. Edmunds.com tracks what buyers look at when shopping for a new car. Aura buyers most commonly shop the Toyota Camry, Honda Accord, and Nissan Altima, an indicator that at the very least, Saturn is doing a pretty good job of keeping some of its shoppers from defecting to Japanese family cars.

Similarly, the Outlook, which hit the market late last year, gets looks from import shoppers. About one-quarter of Outlook buyers look at its stablemate, the GMC Acadia, but the next two models on their shopping list are the Mazda CX-9 and Honda Pilot crossover SUVs.

More here: http://www.businessweek.com/autos/co...mpaign_id=yhoo

[nascarnate326]

You dont get the 'Car czar' title for nothing.
Now, lets move some AURA's..

[mkaresh]

I'm very interested in seeing the February sales figures for the Aura, Outlook, and Acadia.

On the cross-shopping, I track this as well. If you go to any model's information page on my site you'll see a list of the six models it is most often compared to.

http://www.truedelta.com/brands.php

For the Aura:
1. Accord
2. Camry
3. G6
4. Fusion
5. Altima
6. Sonata

The other cars aren't compared so often to the Aura, though. The Aura is 5th on the Camry's list but not on the Accord's, Sonata's, or Altima's lists. Notice how the article refers to a larger percentage increase in import-shopper interest. The absolute number is still relatively small.

[Dynamo]

Originally Posted by mkaresh

For the Aura:
1. Accord
2. Camry
3. G6
4. Fusion
5. Altima
6. Sonata

Now that's interesting info.

Is this typical for new nameplates from rejuvinated brands? Seems to me most people still don't know what an Aura is but when they see it they like it.

[JVal14]

Sweet. The best part is Saturn will only get stronger as Outlook sales gain traction, the Green Line Aura comes out, and the Astra and Vue are introduced. Saturn will become GM's ace card.

[neshapop]

Originally Posted by Dynamo

Now that's interesting info.

Is this typical for new nameplates from rejuvinated brands? Seems to me most people still don't know what an Aura is but when they see it they like it.

I don't think that is real life comparison, more likely Saturn will steal/cannibalize other Ford/DCX/GM sales.

There are no signs of sales weakness for top selling Toyota/Honda/Nissan models. So how Saturn will do the job that Chevy/Pontiac/Buick failed so many times with huge dealership network?

I am tired of those stories "and now ultimate Camry/Accord/Altima fighter!". Sorry guys, never happened in so many years.

[rsbaker]

Originally Posted by nascarnate326

You dont get the 'Car czar' title for nothing.
Now, lets move some AURA's..

I'm just starting to see a lot of them on the street and they look really good. Once people realize that the cars they are seeing are actually Saturns, Aura sales will begin to spike up. It took a while for G6 sales to pick up as well. When they get the Astra, I predict it will sell 100,000 in its first year on the market.

[steverino]

Originally Posted by neshapop

I don't think that is real life comparison, more likely Saturn will steal/cannibalize other Ford/DCX/GM sales.

There are no signs of sales weakness for top selling Toyota/Honda/Nissan models. So how Saturn will do the job that Chevy/Pontiac/Buick failed so many times with huge dealership network?

I am tired of those stories "and now ultimate Camry/Accord/Altima fighter!". Sorry guys, never happened in so many years.

Who's to say, maybe 30% of Aura sales were to people who would have otherwise purchased an import. I guess the salesperson would have to ask the customer what other vehicle he would have purchased to get a true indication.

[geozinger]

Originally Posted by rsbaker

I'm just starting to see a lot of them on the street and they look really good. Once people realize that the cars they are seeing are actually Saturns, Aura sales will begin to spike up. It took a while for G6 sales to pick up as well. When they get the Astra, I predict it will sell 100,000 in its first year on the market.

What impresses me is the fact that one of the guys in the neighboring building (at work, they're a law firm) has an Aura XR.

That law firm's reserved parking spaces are usually the province of BMW/Lexus/Audi's. The reserved spaces are for the principals of the firm, not the lowly secretaries who have to park with all of the rest of us (printers)...

Is this a trend? I don't know, but I think it says something... I just don't know what it is yet.

[ByTheLake]

Originally Posted by steverino

Who's to say, maybe 30% of Aura sales were to people who would have otherwise purchased an import?

I believe his point was that Toyota's sales numbers are still seeing the same double-digit growth month after month while some U.S. brands are dropping.

I think he's right ... we're not yet putting a dent in the import brands, and its more about perception than about product.

[01cavalier]

The fact that it is being cross-shopped is great, sales won't make much of a dent in imports now. If it will, it will take some time to get there. It could happen though, I know I love seeing Saturn doing exactly what it was supposed to a long time ago.

[mgescuro]

Saturn is also doing well on the West Coast, traditionally hostile territory for domestic brands. Saturn says its No. 1 dealer in February, based on sales volume, was in Los Angeles. Four of the top 10 Saturn dealers are in the L.A. area.

I CALLED IT!!!
SEEEEEEEEEEE!!!!!!!!!!

[HoosierRon]

Here is an idea for you photochoppers. Start with Mount Rushmore, and then add the faces of Earl, Wellburn, Lutz and Wagoner. (If you don't like Wagoner, you can add that hot chick from the design studio.)

[poncho1982]

All hail Bob, keeper of the light......

[69Firebird400]

Originally Posted by mkaresh

I'm very interested in seeing the February sales figures for the Aura, Outlook, and Acadia.

Easy enough to provide:

Model; Feb 07; YTD
Aura; 3,796; 7,898
Outlook; 1,900; 2,834
Acadia; 4,283; 5,965

Originally Posted by HoosierRon

Here is an idea for you photochoppers. Start with Mount Rushmore, and then add the faces of Earl, Wellburn, Lutz and Wagoner. (If you don't like Wagoner, you can add that hot chick from the design studio.)

Ugh - Wagoner is a fine CEO, but given the choice between his face and the designer chick - not much to think about!