Kill Olds To Save Saturn

Automotive Industries, June, 2000 by Ken Gross

GM has an opportunity to salvage the best from two divisions and -- at last! -- drop its weakest nameplate.

GM's newest brand started with a greenfield site in Tennessee, and a management happily in bed with the UAW. Backing it up were new production processes, snappy new standalone showrooms and, most importantly, Hal Riney's provocative, loyalty-inspiring ads. No wonder Saturn sales soared, at first.

Did it matter that early Saturns had buzzy motors, uninspired styling and more than a hint of cheapness? Not a bit in shiny stores staffed by fresh-faced youngsters, who very likely never sold cars before. Fixed prices? No problem. The unprecedented first Saturn owners' reunion was like a religions revival. Even GM was amazed that entire families planned their summer vacations around driving to the plant in Tennessee to share in the Saturness of it all.

GM planners thought Oldsmobile was a likely destination for Saturn owners who wanted to move upmarket, but no viable synergy between GMs oldest and newest brands ever developed. Forward planning lacked a midsized car, a pickup, or an A mid-cycle station wagon and a revamped coupe featuring small half-doors failed to spark much new interest, as sales of the S-cars leveled.

When the larger Saturns finally arrived last year, their launch could only be described as ill-planned. The Opel-based L-series cars themselves are generic and lusterless but, perhaps even worse, Saturn's marketers seemingly forgot to frame them within their segment With whom did the L-cars compete? The ads didn't say. A second wave of TV ads was rushed in to fix this lack of clear positioning. They showed a Saturn dealer bringing an Accord and Camry to a potential customer's house for a test drive. The latest round of TV spots, with a Saturn L chasing a sports import, simply aren't believable.

Although L-series volume is up a bit, sales remain below expectations. Saturn's overall U.S. volume has stalled at less than one third of Honda's or Toyota's, before trucks are counted. Volkswagen, with better products car for car, is killing them. Interestingly, GM plans to equip future Saturns with Honda V-6s. Is that an admission of failure?

Look at it another way: If GM hadn't bothered with Saturn, and invested in Chevrolet instead, perhaps Chevy wouldn't be lagging 280,000 cars and trucks behind Ford as of last April Adding a division, while crippling an icon, was stupid.

What's the solution for Saturn? The combined strength of the Pontiac/GMC brands points to it. It's too late for GM to dump Saturn. With neat standalone stores in major markets and ad-bewitched loyal customers -- for the time being, anyway -- GMs newest brand stands for good basics. Meanwhile, Oldsmobile's on the ropes -- not for lack of decent product, but for want of a clear focus. Encumbered with overlapping brands, GM has an opportunity to salvage the best from two divisions and (at last!) drop its weakest nameplate.

It wouldn't be easy or happen overnight, but consider this strategy. The Olds name fades away over three to five years. Unproductive Olds points are phased out; dealers will scream for their attorneys, but Chrysler managed to do it with Plymouth. Saturn becomes the surviving brand and keeps the best Olds locations -- they'll need them, because Saturn stores are too small for an expanded lineup.

Drop the L-cars and fast-track the next generation Alero, Intrigue and Aurora -- with more unique features and a sense of style -- to form the mid-to-high range of the reconstituted Saturn. And forget the Bravada -- what Saturn needs is the all-new, car-like SUV, that's already in the pipeline.

GM must focus its greatest resources on reinvesting in Chevrolet, and brands like Pontiac. It should leave pickup trucks to Chevrolet/GMC. By equipping Saturn with more and better new products -- and offering the basic-car faithful a move upmarket -- they'll have a shot at retaining the brand's initial promise.

Veteran AI marketing columnist Ken Gross is director of the Petersen Auto Museum in Los Angeles. A former brand manager of a global consumer goods company, Ken has written extensively about automobiles for three decades.