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A Different Kind Of Saturn


News: Analysis & Commentary: Autos

A Different Kind of Saturn

Can larger models--and more GM features--revive the brand?

Marletta Stevenson is awaiting the delivery of a car she has never seen. She doesn't even know the sticker price. In April, the retired Bay Shore (N.Y.) teacher plunked down a $500 deposit for a gold Saturn LW wagon. She's hoping the new midsize car that arrives in showrooms in early July will provide more room than her old Saturn SW for toting her model railroads to conventions. "Pure Saturn love is what I'm buying this car on," she says. "I'm buying it on faith."

As it launches the first addition in nine years to its one-car lineup, that's the kind of devotion Saturn is banking on. Once the bright, young upstart of General Motors Corp.'s dysfunctional family, Saturn set out to be all that GM wasn't: customer-sensitive, labor-friendly, and service-oriented. But as gas prices plunged, Americans abandoned small cars. And lacking the investment from GM to bring out new models, Saturn was stymied, its sales sliding 19% since 1995. Even within its niche, Saturn lost ground to foreign rivals Toyota and Honda, despite the U.S. auto maker's sterling customer reputation.MAKE OR BREAK. Now, Saturn hopes the new bigger LS sedan, which starts at $15,500, and the $19,300 LW wagon will pull the division out of its free fall, doubling sales, to nearly 500,000 cars, in a few years. "This is make-it-or-break-it time," says Amityville (N.Y.) Saturn dealer Michael Lazarus. "Saturn proves itself as a brand with this car."

Fortunately for Lazarus and Saturn's 403 other hard-pressed "retail partners," as Saturn calls them, the new L-series (for Larger Saturn) is reckoned a worthy competitor to the top-selling--and similarly priced--Toyota Camry and Honda Accord. The bland styling of the LS "makes a statement of attractive practicality," aimed at the buyers of Japanese sedans, says Lincoln Merrihew of Standard & Poor's DRI. And the motor press says the car's European-derived chassis performs. Says Csaba Csere, editor of Car and Driver: "The new Saturn sedan is definitely in the ballpark with the leaders in the class."

Even better news for Saturn was the GM board's May approval of a new Saturn sport-utility vehicle. That will get the division into the industry's hottest segment by 2001. Critics carp that GM should have moved Saturn straight into the fast-growing truck market, instead of the family-sedan segment. But Saturn President Cynthia Trudell says that just as many Saturn customers were defecting to midsize cars and that the segment's 3.5 million buyers were an irresistible lure. In any case, Saturn's new vehicles are "late but certainly not too late" to revive the moribund division, says Merrihew. Admits GM North America President Ronald L. Zarrella: "I wish we had done it a long time ago."

So do Saturn customers and dealers. For years, GM refused to grant its stellar fledgling the new products it needed, stubbornly diverting resources to ailing brands such as Oldsmobile instead. "GM pulled a rabbit out of the hat," says Arthur D. Little consultant John Wolkonowicz. "Then they almost let it die because of interdivisional fighting."STRINGS. The GM brass lined up behind Saturn because of its track record in luring import-loving baby boomers. The division says it recruits 75% of its customers from non-GM car owners. "We're committed to growing Saturn," says Zarrella, "because we think it will bring new consumers to General Motors and increase our market share."

But although Saturn now is getting the new models it desperately needs, there are strings attached. The harsh realities of global auto consolidation are prevailing over the plucky individualism that made Saturn a maverick. GM no longer can afford to let Saturn design, engineer, and manufacture unique vehicles from scratch, as it did more than a decade ago when the upstart division was created. Saturn vehicles must now share underpinnings and many components with GM brands. Says Trudell: "Saturn needs to grow by tapping the resources of our parent."

That's why Saturn's new cars are built by GM workers in an ex-Chevrolet factory in Wilmington, Del., not by the hand-picked Saturn team at the company's plant in Spring Hill, Tenn., mythologized by a decade of folksy Saturn ads. Says ING Baring Furman Selz analyst Maryann Keller: "Saturn is in danger of becoming just another car division of General Motors."COMMITTED. That could be a problem for a carmaker that has billed itself as a "a different kind of car company." Says Wesley R. Brown, an analyst at Nextrend consultants in Thousand Oaks, Calif.: "One reason Saturn became popular was that they said they were different from the rest of GM."

GM managers insist they are committed to preserving Saturn's uniqueness. "There are certain elements of the Saturn character that are not negotiable," Trudell insists. Those boil down to no-haggle pricing, friendly sales and service, and the popular dent-resistant plastic panels on the sides of all Saturns. But the new car's comfy seats, ergonomically arranged knobs and dials, smooth handling, and emphasis on safety are pure Saturn as well, she argues.

Saturn may not be as strong as it might have been if GM had pumped new models into the pipeline years ago. But luckily, its customers are still rooting for the underdog. Says Stevenson: "Saturn is the best thing that has happened in America." Maybe, but if GM ever waits so long again to give its youngest division a new vehicle, the rings around Saturn will be put there by its rivals.By Kathleen Kerwin in Troy, Mich., with Keith Naughton in DetroitReturn to top


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