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GM Maps Out New Mission for Saturn

Chicago Tribune - January 16, 2004
by Jim Mateja
Motor Trend

Bob Lutz was all smiles. General Motors' vice chairman of product development had just unveiled his new baby, the Pontiac Solstice roadster.

Less than two years after Lutz joined GM after leaving Chrysler, the Solstice was approved for production (for '06) at his urging to bring new life to Pontiac.

Next problem?

"Saturn hasn't done as well as we'd like. We're going to recreate it," Lutz said in an interview at the Detroit Auto Show, where GM also unveiled a small Saturn Curve concept coupe.

"In hindsight, Saturn made a couple of mistakes," Lutz said. "It was formed as a separate car company built around one small car. That wasn't a good idea."

Saturn was the work of then-GM Chairman Roger Smith to beat the Japanese by selling 500,000 small cars annually. Saturn started with a subcompact sedan for the 1991 model year. Months later it added a coupe.

Saturn proved an initial success. About 70 percent of buyers owned imports and had never visited a GM store.

Soon there were warm and fuzzy stories, such as an engineer flying to Alaska to deliver a seat.

Though attracting new buyers, it didn't attract 500,000.

First-year sales totaled 75,000. Best year was 1994 with 286,000 sales. In '03 Saturn sold 271,000, down from 280,000 in '02. Profits were counted in coins.

Lutz says GM should have reacted differently in 1991.

"We should have said, 'Hot dog! We have a new small car attracting new buyers, let's follow with a larger car, a truck and a sport-ute,' " he said.

"But the corporation said, 'You'll get another car when you make money on this one,' which is like telling a 4-year-old you won't give him any more food until he gets a job and make some money on his own," Lutz said.

In the 2000 model year, a midsize L-Series sedan was added. It "looked old and got lost in the shuffle," Lutz said. L-Series sales fell 20 percent in '03.

"The other problem is that there wasn't enough focus on the car," Lutz said of the early Saturns. "We told people we didn't care so much about the car as we did the buying experience, which is important but secondary to having a desirable car.
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"It should be easy to fix Saturn and will only take another year or two. We can help by expanding the lineup," Lutz said.

Saturn added a Vue sport-utility for '02. While Saturn sales were down about 10,000 units for '03, Vue sales were up 9 percent.

For '05, Saturn will add Relay, a midsize crossover sport van, the first of three new vehicles in 36 months. The others are a larger companion to Vue, and a small sports car, the reason Curve is on the auto-show circuit.

"If I could wave the wand, having Curve now would solve a lot of problems. Curve is the kind of car that compels people to buy a Saturn," Lutz said.

We've committed large sums to fix Saturn and add products to its pipeline. But in the future there'll be more corporate sharing with other platforms and other GM vehicles," he said.

Full Article Here

 

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A Question does GM sell saturns in Japan? If not GM should do a Toyota (ala Scion) and take the fight to Toyotas home turf. Stop being defensive. think offensively.
 

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Saturn already tried to sell cars in Japan, and they failed miserably. The plug was pulled, and Toyota has increased its share in Japan back to a traditional 42-44%. It's very difficult to make any gains in Japan, as foreign car sales, lead by the Teutons, has demonstrated.
 

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Originally posted by Odin@Jan 17 2004, 08:11 AM
A Question does GM sell saturns in Japan? If not GM should do a Toyota (ala Scion) and take the fight to Toyotas home turf. Stop being defensive. think offensively.
:(
They did at one point in time. They even had right-hand versions of the SL2. They even sold the Saturns witht he same quirky ad campaign and "down-home goodness" that was a success in the US.
And Saturn failed miserably. Saturn opened heir own dealership and had the same non-commission sales people. Problem was in doing so, GM racked up a very high investment cost, which "short-term gains only" American business ideals saw as "major losses. Furthermore, with Saturn lacking compelling products (both in Japan and in the US), the losses continued to rack up. So, GM pulled the plug.

If GM had the products in the pipeline, had the customization features that are popular in Japan (like they have now on the ION) and had high performance models (like they have now), then the success in Japan would have been better. But they didn't have that in the mid-90's.

GM needs to try again with Saturn (and Cadillac and Saab). The 3 have a compelling product lineup now that could be successful in Japan. GM needs to realize that they WILL take massive losses in Japan. But in about 5 years, they will start to break-even. It's Toyota's turf, and they need to understand that. If you WANT to beat Toyota, you NEED to beat them at home. And if that means strengthening Isuzu, Subaru, Suzuki, and Daewoo, as well as bringing in Saturn, Caddy, and Saab, so be it!

GM can do it in Japan, but for some reason..... they won't.
 

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Originally posted by mgescuro@Jan 17 2004, 12:53 PM
GM can do it in Japan, but for some reason..... they won't.
If all was fair, succeeding in Japan would be a very viable goal... but things aren't fair. The Japanese government does not allow fair trade-- foreigners are not so welcome there.
 

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Saturn should only be front wheel drive, and it should work from the compact size on down. If not, then why did GM kill Oldsmobile. If I was at the helm, I would get rid Buick, GMC, and Pontiac.
 

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there is a lot of overlap but i would ditch saturn before buick and pontiac..thats just me though...gmc should just make trucks and chevy stick to cars..JMHO
 

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Originally posted by Mr_Pringle+Jan 17 2004, 11:23 PM--></div><table border='0' align='center' width='95%' cellpadding='3' cellspacing='1'><tr><td>QUOTE (Mr_Pringle @ Jan 17 2004, 11:23 PM)</td></tr><tr><td id='QUOTE'> <!--QuoteBegin-mgescuro@Jan 17 2004, 12:53 PM
GM can do it in Japan, but for some reason..... they won't.
If all was fair, succeeding in Japan would be a very viable goal... but things aren't fair. The Japanese government does not allow fair trade-- foreigners are not so welcome there. [/b][/quote]
I don't think that GM and Ford continue to rack up puny sales in Japan simply because the Japanese government is anti-free trade. I'm sure it plays a role, but there are a myriad of American companies (Proctor and Gamble, Gillette, Citigroup, Altria Group, and Boeing, to name a few) that manage to prosper in Japan. There seems to be a multitude of factors that play a role in GM's and Ford's lack of success in Japan.

For example, it's my understanding that the Japanese auto market is horribly competitive, and it seems that GM and Ford don't deliver the goods (i.e., American and to a lesser extent European models from the two don't appeal to the Japanese as well as they could). It's also my understanding that American auto companies suffer from a perceived quality gap against their Japanese competition, much in the same way that they do in the US.

In the end, part of their failure is a result of their own half-hearted attempts at success.
 

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There is a quality gap between Japanese and American cars. Look at old GMs and Fords, you see paint problems, horrible interiors, and they usually can push out a huge cloud of smoke when they take off.

Aside from that, not only is Japan competitive with 7+ car companies selling across 3-5 brand names each, there's a lot of brand loyalty (moreso than Chevy men, Ford men, etc., here in the US).
 

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No. I think GM and Ford can do very well in Japan. First of all, Ford has control of Mazda. GM has control of Isuzu, and nearly control of Suzuki and Subaru. If anything, if it is soooooo difficult to compete in Japan as an auto manufacturer, then you can strengthen your Japanese brands to the point that Toyota and Honda really have to take notice.

Also, GM has done marignally well in Japan. The Grand AM and the STS have historically done well in Japan. And that's only because of their "unique" look. The fact that the wheel is on the left hand side is a major problem. But that should be rectified with the new models.

Yes, Japan i highly competitive, but it is quite possible to succeed in Japan and even knock the local japanese companies out of the market. Proctor & Gamble have done it with their dishwashing soap (of all things). I know, exception to the rule. But when Toyota has about 40% of the marketplace, you will run up against a major brick wall.

GM can do it. But they need to realize that they will NOT make any money in Japan for 5-10 years. But GM is not healthy enough to do so -- at least not now. Gm does have cars that could succeed in Japan. THe Solstice, CTS, STS Curve, 9-3, 9-5 would do very well in Japan. GM also need to learn to cater to the Japane marketplace. Be flashy. Offer the latest doo-dad in the car. Etc .

I'm sure in time, GM will finally realize this. If anything, they should strengthen their Japanese brands that they control. Seriously, the only independent Japanese brand is Toyota. It can be done.
 

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Originally posted by mgescuro@Jan 18 2004, 05:36 AM
No. I think GM and Ford can do very well in Japan. First of all, Ford has control of Mazda. GM has control of Isuzu, and nearly control of Suzuki and Subaru. If anything, if it is soooooo difficult to compete in Japan as an auto manufacturer, then you can strengthen your Japanese brands to the point that Toyota and Honda really have to take notice.

I'm sure in time, GM will finally realize this. If anything, they should strengthen their Japanese brands that they control. Seriously, the only independent Japanese brand is Toyota. It can be done.
Mazda's president or CEO or whatever is a Ford guy, I think.

Suzuki and Isuzu (and Subaru) still have a lot of freedom to do what they want. Suzuki pretty much owns the auto industry in India, so they are no strangers to success, but in Japan they tried the Chevrolet Cruze (basically a rebadged Suzuki) and didn't get far with it.

Keep in mind as stated above Toyota owns a huge chunk of the auto industry in Japan, and has umpteen million models, some as old as the Chevy Astro, just sitting around getting updated year after year.

The big problem with Japan is this --- no one makes MONEY there. Japanese automakers - at least Honda and Toyota (and probably Nissan as well) make a gigantic chunk of their profits in the US. Honda takes nearly NINETY PERCENT of its total car profits from the US market, and sends as much as it can back to the engineers and executives in Japan. Why should any of them focus on the unprofitable Japanese market, when so much money is to be made here?
 

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Mabey it's just me? I never understood the need for Saturn. It seems to me Saturn compeates against Chevy's here which defeats the purpose. GM owns or has a piece of European, Japaneese and Korean small car maufactures. It will have the Equinox, Cobalt and Aveo here and whatever Pontiac and Chevy spinoffs come from the Kappa platform. So why another small car line here? I think that Saturn should be put to sleep and all that money should be pumped into Chevy and Pontiac for their small car and crossover lines. Saturn just does not make sense to me. My second point, screw wasting time trying to sell in Japan. China is the market to go after for the future.
 

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I also never understood the need for Saturn. It was this silly thinking in the early 90's that started killing off one of my favorite car companies; Oldsmobile. The Alero was much nicer than the S series, the Intrigue far superior to the L series, the Aurora was in a class by itself and Saturn didn't even have a mini-van or Suv. Now we have no Olds and Saturn with it's weak lineup of cars. I know the Redline models are pretty fast but even then the Vue has to rely on Honda for the engine. My question is; whats the point GM?
 

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Saturn was a neat idea, but executed the wrong way. The idea of friendly, non-pushy dealerships is a great one, and GM could have been in even stronger position right now if they would have adopted that policy with Chevy for example. It obviously had an impact on people, because there are many loyal saturn buyers out there. As for the quality complaints, I think you're missing an important point... if you look at quality in current vehicles, GM and Ford are both as well built as anything from Germany or Japan. DCX is a little bit behind in a couple of quality areas, but that company may well be a sinking ship at this point.

The American people need to get into some GM and Ford dealers and realize that "quality" is no longer synonymous with "not American". With the dealership experience you get with Saturn, and the calibur of product from GM & Ford, can you imagine what would happen to Toyota? Saturn hasn't made a car that excited me ever. Toyota hasn't done so in over a decade. Toyota is only gaining market share because of perceived quality -- not because of having the better product or the more desirable one. Perception is what needs to be changed. The Saturn philosophy could help change it, but it's not enough to just retarget the brand.
 

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After reading this article, I wonder if it's only a matter of time before Saturn does away with its core space frame polymer paneled vehicles....


Ken
 

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Saturn should only be front wheel drive, and it should work from the compact size on down. If not, then why did GM kill Oldsmobile. If I was at the helm, I would get rid Buick, GMC, and Pontiac.



So let me get this straight, you would get rid of three divisions, all of which outsold Oldsmobile, and keep Oldsmobile? or do you mean that you would have gotten rid of Pontiac, Oldsmobile, Buick, GMC and Saturn. WTF? Obviously you have no clue what each of these brands ads to GM's bottom line. I guess that yoiu are some kind of marketing expert.....please dont burn the french fries.

I cant understand why people always say" GM should just drop Pontiac, Buick,. GMC, and Saturn and just concentrate on Cadillac and Chevrolet" uh.....NO!

Pontiac, Buick, GMC and Saturn probably equal more than 2 million sales all together, why in the world could you make any kind of business case for dropping them? Do you think that people who were going to buy a Buick or a Pontiac would just go automatically over to Chevrolet? NO

I think that this is the right direction for Saturn, as long as they dont forget to always have an economy car in the line up and they dont go to too far upscale. It's true that Saturn was ignored because of some of it's earlier succsess. Saturn should have had a 4 car line up 5 or 6 years ago.

Saturn should have:

ION-coupe/sedan and possibly a Vibe like sport wagon.
CURVE
L series replacement: sedan/coupe/wagon
RELAY
VUE
Larger SUV: V6/V8 5-7 passenger.

It would also not be a bad idea if Saturn had a sub-ION car,, something that sold for around 9-10K .
 

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I also never understood the need for Saturn. Instead of wasting hundreds of millions of dollars, if not billions, on less than 280,000 sales for Saturn per year, GM should have just concentrated on producing THE BEST small cars, small SUVs, and possibly midsize sedans for Chevy and Pontiac, instead of letting them rot on the vine.

Now that Saturn is here, GM is just making it a copy of it's other divisions. If they do decide to keep it, they should make sure they have relatively unique products that don't compete with the other divisions, and they should focus Saturn on the younr, kind of like Scion. I don't see how a Minivan, and a frumpy and ugly one at that, is in keeping with a sporty, youth-oriented brand. Focus on small sporty vehicles of all types and there just might be a reason for Saturn to survive.
 
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