Auto Finance News

No products in the cart.

Subscribe
  • Home
  • News
    • All News
    • Capital & Funding
    • Compliance & Regs
    • Technology
    • Risk Management
    • Sales & Marketing
  • Data
  • EXCELLENCE
  • Magazine
  • Events
    • Auto Finance Summit 2023
    • Powersports Finance Summit 2023
    • Using Pricing Analytics to Increase Loan Profitability and Mitigate Portfolio Risk
  • Podcast
  • Powersports
BIG Wheels
Log In
No Result
View All Result
Auto Finance News
  • Home
  • News
    • All News
    • Capital & Funding
    • Compliance & Regs
    • Technology
    • Risk Management
    • Sales & Marketing
  • Data
  • EXCELLENCE
  • Magazine
  • Events
    • Auto Finance Summit 2023
    • Powersports Finance Summit 2023
    • Using Pricing Analytics to Increase Loan Profitability and Mitigate Portfolio Risk
  • Podcast
  • Powersports
BIG Wheels
Log In
No Result
View All Result
Auto Finance News
No Result
View All Result

On the Demise of Saturn

Auto Finance NewsbyAuto Finance News
January 5, 2009
in Archives
Reading Time: 3 mins read
0

I recently read an industry analysis written by Mark Scheiner on the demise of Saturn, now a brand in a huge state of flux within GM. In short he stated that it was a GM opportunity gone wrong. He stated, “The lesson here is that brands whether, they’re products or branding, need time to seed themselves. These are long-term investments in both capital and marketing with branding efforts surrounding them. Most importantly, the messaging needs to remain consistent across all channels, and audiences. Too many times companies become impatient or want to change something too quickly.”

While I can appreciate his emotions, I ultimately disagree with his analysis of Saturn’s demise. It isn’t as simple as staying the course, especially when you must sell your product through an independent dealer base.

In my opinion, GM indeed stayed the course. Since their inception in 1985 they never have turned a profit. They indeed had the logo, the freshness, and during the late 90s the public stated their dealers did it right as they were awarded the highest sales satisfaction ranking by J.D. Powers for four years running.

I consider 10 years to be long term. If you can’t turn a profit, there is a problem that must be changed. Saturn had many problems. First, their dealers were challenged with profitability – even though the public loves them. With only three models, a returning customer had to re-up for the same vehicle. Saturn was popular with the 18 – 34 year olds. The problem is, that crowd gets married and starts a family and suddenly their transportation needs change. Saturn did not have a product to satisfy that need. It took 9 years to launch a mid-size vehicle. Customer went elsewhere and dealers never got on the right side of the ledger.

Additionally, dealers depend upon fixed operations (parts and service) to cover their overhead. With a new car line and no fixed ops base it is a long and painful process trying to develop that side of the operation.

Due to lack of profitability and the need to diversify their product offerings, Saturn dealers begged GM for additional products at a time when both domestics and imports year ahead of them bringing popular minivans and SUVs to market.

Lack of profits limited Saturn’s R&D efforts. Their vehicles were of good quality, but nothing better than the rest of GM. The quickest way to solve the problem was to tap into the strong product development of the other GM divisions where SUVs and minivans already existed.

This didn’t pollute the “Saturn Way” in terms of customer/retailer interaction. It did create new and fine products for Saturn dealers to offer. My wife drives one of them – a Saturn Sky – which was developed simultaneously with Pontiac. The problem is that during the years where there was no step-up vehicle, Saturn customers became Toyota and Honda customers. Now they are gone.

Scion is the most recent attempt to create something new. It worked famously for 2 – 3 years, then it hit a zenith and sales have started to fall. Same problem. The difference is that it never has had to stand alone. Scion was housed within Toyota retailers’ stores. Investments were minimum. Additionally, the step-up becomes a Toyota product. Additionally, the retailers didn’t have to build free standing facilities with separate service departments.

In short, 23 years without profits must end. It is sad, as I am a fan of the Saturn line. I have many clients that are Saturn dealers. In the end I must go back to what I wondered 23 years ago, “Is it really needed?” It was supposed to capture import buyers and those not of the GM ilk. With a limited product line that would take years to spool up, I wasn’t sure it was viable then, and certainly don’t see how it is today. Should it be sold to another manufacturer ala Jaguar and Land Rover, I don’t see how that will change a thing. I don’t want for its Saturn’s demise, but if GM doesn’t survive, what use is it. One thing is sure, it certainly isn’t for GM failing to give it sufficient time to develop. 23 years is certainly is long enough.

Previous Post

The Glass Is Half Full

Next Post

EXCLUSIVE: GMAC Shuts Down Nuvell, National

Related Posts

Powerful motorcycles on parking
Archives

Powersports incentives return as inventory grows

August 11, 2023
RJ Scaringe, chairman and chief executive officer of Rivian Automotive Inc.
Archives

Rivian gets a $3B boost from making Mercedes a frenemy

September 9, 2022
© Can Stock Photo / welcomia
Archives

Proposed FTC ‘junk fee’ rule garners nearly 1,700 comments

August 15, 2022
Next Post
Auto Finance News

EXCLUSIVE: GMAC Shuts Down Nuvell, National

Comments 5

  1. jjhornblass says:
    15 years ago

    I was never a Saturn convert, but the franchise still seems to have value, particularly with a fully developed dealer pool. I don’t think it would be too hard to turn Saturn around, get some of that “Beetlemania” back — in a normal market. We are not, unfortunately, in a normal market, and that means ventures dying on the vine will surely be dead soon enough.

    Just to comment on David’s “One Price” point, I recall some years ago that JP Power-types had done research and concluded that consumers’ greatest dislike in the auto-buying process — if not in their retail purchasing experiences overall — was the haggling over price with dealers. Car makers, and the Big 3 in particular, made haggling their No. 1 target for elimination, and in some ways the incentive programs have stifled haggling. Saturn did its part to minimize the culture of haggling among dealers, too.

    Reply
  2. brianreed says:
    15 years ago

    I would like to comment on the “one-price” discussion. I think that as we speak the industry at all levels is in the midst of change, including how dealers sell cars. The Internet is continuing to create greater transparency of price and the consumers are starting to demand more and more that they be given the price of the car upfront. Would you walk in to a Best Buy to purchase a new 65″ Big screen TV without knowing the price? If you googled the TV you were looking for and were not able to get a real price on the TV would you go to that store? It is my strong opinion, that especially as generation Y people become car buyers, that if a dealer is not totally transparent on price of their vehicle at the marketing stage, the generation Y consumer will not go to that dealership. I also feel the same is true relative to the negotiation process that takes place in the Finance Office of many dealerships. The car buyers of tomorrow will demand price transparency for the car they purchase as well as the financing.

    Reply
  3. davidruggles says:
    15 years ago

    Despite the fact that customers answered J. D. Powers survey questions stating they hated haggling, another survey company came up with a completely different finding because they asked the questions differently. The issue between the two surveys was the talk at NADA circa 1992. In practice we all know that customers couldn’t wait to go to the “One Price” store and take their price to the “regular competitor. Now we have the Internet so customers don’t have to drive or even pick up the telephone to get pricing info. “One Price” could work in markets where a single dealer has all the outlet points If there is not over production of inventory by the manufacturer.

    I think most of us remember how “One Price” worked for the “Auto /Collection”, Ford’s ill fated venture into the retail business. I had a close up look at it in Oklahoma where a friend has a Ford store on the fringe of Tulsa. He was quite disappointed when the “collection” went away and he had to deal with conventional competition.

    After “One Price” was seemingly settled in the U.S. I encountered it again when I went to Japan a few years ago to do my annual seminar there. The Japanese were all worked up about it and I was required to weigh in. I told them as long as a vehicle is new and hot in the market place , and the manufacturer does their part by balancing production to demand, you have a shot at making it work. And work it did until a vehicle became “old” in the marketplace and the manufacturer overproduced and then provided “trunk money” to make the inventory go away.

    Having said all this, there is something to be said for the concept of “Efficient Markets, especially at is is driven by the Internet.” Dale Pollak has written about how the auto business has become such an efficient market that it is foolish to try to maximize profit through negotiation. He says, in his book “Velocity” that profit comes from driving volume through high turnover of inventory. I’m not sure I’m 100% in agreement with everything he says but I wouldn’t rule it out. I don’t think there are auto business model standards in existence these days that most everyone agrees on. We are truly in the midst of a radical change and we are all groping for answers.

    Reply
  4. bobburns says:
    15 years ago

    “One Price” simply doesn’t work when you have dealers competing with each other and the natural tendency for production to catch up to and eventually surpass demand. No mass produced car that I can think of every held a premium for very long. Think of the Mazda Miata, the Z-Cars from Nissan. Initial production and sales profits led to the inevitable softening of prices and profits.

    It doesn’t take a rocket scientist to realize that once a customer has gone away it’s a herculean task to get him/her back. GM let their customers go elsewhere. Had the crash not occurred, they’d wouldn’t be in the fix they’re in now. No one in the car business is doing well (to say the least) but the Big Three are paying the price for their decades of hubris as it relates to the customer.

    Saturn is just a textbook case.

    Reply
  5. Anonymous says:
    13 years ago

    So does this service get the best deal in the customer’s interest or the best deal for the dealer?

    Reply

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

STAY INFORMED WITH OUR NEWS ALERTS

COLUMNS

Closeup of car head lamp

Under the Hood: Opposing forces tug at industry’s future

September 15, 2023
Green plant growing from the coins

Under the Hood: Lenders spice up funding routines

August 28, 2023

Innovation & Technology

Cars

Westlake portfolio grows following product launches

September 19, 2023
Close up of a charger plugged into an electric vehicle

Bank of America sees EV penetration at 21% by 2025

September 15, 2023

RISK MANAGEMENT

Cars On A Parking Lot

BECU, Fifth Third, NMAC, SCUSA execs join Auto Finance Summit 2023 

September 20, 2023
Federal Reserve building

Fed leaves rates unchanged, signals one more hike this year

September 20, 2023

SPONSORED

A new era in auto finance collections with Voicebots

August 15, 2023

Finding the Perfect Sweet Spot For Your Auto Loan Pricing

June 13, 2023
© Can Stock Photo / kran77

When rates take a hike, do auto lenders change strategies?

April 28, 2023

Resources

ABOUT US

HELP CENTER

MARKETING SOLUTIONS

PRIVACY TERMS

ADA COMPLIANCE

CODE OF JOURNALISM ETHICS

Manage Cookie Consent

Special Content

EXECUTIVES OF THE YEAR

AUTO FINANCE EXCELLENCE AWARDS

MAGAZINE ARCHIVE

INDUSTRY GLOSSARY

Follow Us

twitter linkedin twitter podcast podcast
© 2023 Royal Media
No Result
View All Result
  • Home
  • News
    • All News
    • Capital & Funding
    • Compliance & Regs
    • EVs
    • Exec of the Year
    • Innovation & Technology
    • Management
    • Powersports Finance News
    • Risk Management
    • Sales & Marketing
  • Events
    • Auto Finance Summit East
    • Auto Finance Summit
    • Powersports Finance Summit
    • Equipment Finance Connect
  • Excellence
    • Best Practices
    • Topics
      • Compliance
      • Customer Experience
      • Technology
    • White Papers
    • Glossary
  • Magazine
    • Latest Issue
    • Features
    • New Tracks
    • Car Culture
    • Staffing Shuffles
    • Under The Hood
    • Spotlight
    • Issue Archive
  • Podcast
  • Data
  • +PLUS
  • SUBSCRIBE
  • Log In / Account

Welcome Back!

Login to your account below

Forgotten Password?

Retrieve your password

Please enter your username or email address to reset your password.

Log In
THIS WEBSITE USES COOKIES

We use cookies on our website to give you the most relevant experience by remembering your preferences and repeat visits. By clicking “I CONSENT”, you consent to the use of ALL the cookies.

Cookie settingsI CONSENT

Review our Cookie Policies
.
Manage Cookie Consent

Privacy Overview

This website uses cookies to improve your experience while you navigate through the website. Out of these cookies, the cookies that are categorized as necessary are stored on your browser as they are essential for the working of basic functionalities of the website. We also use third-party cookies that help us analyze and understand how you use this website. These cookies will be stored in your browser only with your consent. You also have the option to opt-out of these cookies. But opting out of some of these cookies may have an effect on your browsing experience.
Necessary
Always Enabled
Necessary cookies are absolutely essential for the website to function properly. These cookies ensure basic functionalities and security features of the website, anonymously.
CookieDurationDescription
34f6831605sessionGeneral purpose platform session cookie, used by sites written in JSP. Usually used to maintain an anonymous user session by the server.
a64cedc0bfsessionGeneral purpose platform session cookie, used by sites written in JSP. Usually used to maintain an anonymous user session by the server.
CookieConsentPolicy1 yearUsed to apply end-user cookie consent preferences set by our client-side utility.
cookielawinfo-checkbox-advertisement1 yearSet by the GDPR Cookie Consent plugin, this cookie is used to record the user consent for the cookies in the "Advertisement" category .
cookielawinfo-checkbox-analytics11 monthsThis cookie is set by GDPR Cookie Consent plugin. The cookie is used to store the user consent for the cookies in the category "Analytics".
cookielawinfo-checkbox-functional11 monthsThe cookie is set by GDPR cookie consent to record the user consent for the cookies in the category "Functional".
cookielawinfo-checkbox-necessary11 monthsThis cookie is set by GDPR Cookie Consent plugin. The cookies is used to store the user consent for the cookies in the category "Necessary".
cookielawinfo-checkbox-others11 monthsThis cookie is set by GDPR Cookie Consent plugin. The cookie is used to store the user consent for the cookies in the category "Other.
cookielawinfo-checkbox-performance11 monthsThis cookie is set by GDPR Cookie Consent plugin. The cookie is used to store the user consent for the cookies in the category "Performance".
crmcsrsessionGeneral purpose platform session cookie, used by sites written in JSP. Usually used to maintain an anonymous user session by the server.
JSESSIONIDsessionThe JSESSIONID cookie is used by New Relic to store a session identifier so that New Relic can monitor session counts for an application.
LS_CSRF_TOKENsessionCloudflare sets this cookie to track users’ activities across multiple websites. It expires once the browser is closed.
LSKey-c$CookieConsentPolicy1 yearUsed to apply end-user cookie consent preferences set by our client-side utility.
viewed_cookie_policy11 monthsThe cookie is set by the GDPR Cookie Consent plugin and is used to store whether or not user has consented to the use of cookies. It does not store any personal data.
Functional
Functional cookies help to perform certain functionalities like sharing the content of the website on social media platforms, collect feedbacks, and other third-party features.
CookieDurationDescription
__cf_bm30 minutesThis cookie, set by Cloudflare, is used to support Cloudflare Bot Management.
_zcsr_tmpsessionZoho sets this cookie for the login function on the website.
663a60c55dsessionThis cookie is related to Zoho (Customer Service) Chatbox
e188bc05fesessionThis cookie is set in relation to Zoho Campaigns
Performance
Performance cookies are used to understand and analyze the key performance indexes of the website which helps in delivering a better user experience for the visitors.
Analytics
Analytical cookies are used to understand how visitors interact with the website. These cookies help provide information on metrics the number of visitors, bounce rate, traffic source, etc.
CookieDurationDescription
_ga2 yearsThe _ga cookie, installed by Google Analytics, calculates visitor, session and campaign data and also keeps track of site usage for the site's analytics report. The cookie stores information anonymously and assigns a randomly generated number to recognize unique visitors.
_gid1 dayInstalled by Google Analytics, _gid cookie stores information on how visitors use a website, while also creating an analytics report of the website's performance. Some of the data that are collected include the number of visitors, their source, and the pages they visit anonymously.
CONSENT2 yearsYouTube sets this cookie via embedded youtube-videos and registers anonymous statistical data.
vuid2 yearsVimeo installs this cookie to collect tracking information by setting a unique ID to embed videos to the website.
Advertisement
Advertisement cookies are used to provide visitors with relevant ads and marketing campaigns. These cookies track visitors across websites and collect information to provide customized ads.
CookieDurationDescription
__Host-GAPS2 yearsThis cookie allows the website to identify a user and provide enhanced functionality and personalisation.
_dc_gtm_UA-1038974-31 minuteUsed to help identify the visitors by either age, gender, or interests by DoubleClick - Google Tag Manager.
_fbp3 monthsThis cookie is set by Facebook to display advertisements when either on Facebook or on a digital platform powered by Facebook advertising, after visiting the website.
fr3 monthsFacebook sets this cookie to show relevant advertisements to users by tracking user behaviour across the web, on sites that have Facebook pixel or Facebook social plugin.
test_cookie15 minutesThe test_cookie is set by doubleclick.net and is used to determine if the user's browser supports cookies.
VISITOR_INFO1_LIVE5 months 27 daysA cookie set by YouTube to measure bandwidth that determines whether the user gets the new or old player interface.
YSCsessionYSC cookie is set by Youtube and is used to track the views of embedded videos on Youtube pages.
yt-remote-connected-devicesneverYouTube sets this cookie to store the video preferences of the user using embedded YouTube video.
yt-remote-device-idneverYouTube sets this cookie to store the video preferences of the user using embedded YouTube video.
yt.innertube::nextIdneverThis cookie, set by YouTube, registers a unique ID to store data on what videos from YouTube the user has seen.
yt.innertube::requestsneverThis cookie, set by YouTube, registers a unique ID to store data on what videos from YouTube the user has seen.
Others
Other uncategorized cookies are those that are being analyzed and have not been classified into a category as yet.
CookieDurationDescription
caf_ipaddrsessionNo description available.
citysessionNo description available.
countrysessionNo description available.
gnt_eidsessionNo description available.
gnt_eu6 hoursNo description
iamcsrsessionZoho (Customer Support) sets this cookie and is used for tracking visitors (for performance purposes)
systemsessionNo description available.
traffic_targetsessionNo description available.
Save & Accept
Powered by CookieYes Logo