The Saturn Jinx Continues

Penske in happier days (IRL IndyCar Series win last May)

Penske in happier days (IRL IndyCar Series win last May)

Yesterday General Motors announced that the Saturn division was finished, even after long negotiations with Roger Penske to take over the brand and develop it into a dealer-centered enterprise. It looks like the final nail in the coffin for a brand that had suffered constant indignities over the years.

Saturn’s history is well told here, and basically you could think of it as an example of the way GM mismanaged its business at large. Penske Automotive stepped in some months ago as the white knight, and the idea was to keep selling three Saturn cars—the Aura sedan, Astra hatchback, and Sky roadster—which GM would produce for two more years. After that, Penske needed to find another automaker to feed product to the 350 Saturn dealers.

This is where the deal broke down. He was in negotiations with Renault-Nissan, and they backed out, not by the decision of the board—as some have reported—but by the decision of the boss, Carlos Ghosn, per Bloomberg. As to why, we can only speculate, but two things are pretty obvious.

The Renault-Nissan alliance has been moving into other global, and growing, markets like India, China, South Korea, even Russia. We would bet that R-N, currently the world’s fifth largest carmaker, doesn’t see the U.S. as a growth market now or, for that matter, in two years. Second, it would be spread very thin if indeed Saturn sales did take off. As Freep points out, “Renault-Nissan may have been moving into the similar dilemma that led to many of GM’s problems: too many similar products covering too many similar brands.”

So the deal may have been good for Roger, but apparently wasn’t for Carlos. Right now, it’s just one more shock for Detroit and the dealers around the country who were counting on it.

Is it possible that Penske can (and will) find another supplier? Or is the deal totally dead? Tell us what you think.

—jgoods

2 Comments

  1. @Bryce
    Bryce has a point here, though Saturn is/was certainly more than “Opel/Vauxhall assembled in [the] US.” On the Russian connection, see: http://www.ibtimes.com/contents/20090928/russias-avtovaz-plans-assemble-nissan-cars.htm (similar to story in Automotive News Europe)about Nissan’s new $200-million car plant in St. Petersburg, with a capacity of 50,000 vehicles a year. Nissan has made a big commitment to AvtoVAZ, the Russian company which is floundering and let 1/4 of its workers go last week. Still, for Nissan Russia must look like a lot better market (and remember, we’re talking two years down the road) than the US. With Magna now owning Opel, the only competition left for Renault-Nissan will be in Russia! I don’t understand, Bryce, how that sale (GM to Magna) killed the Penske deal. What do you mean, “take all the profit itself”?

  2. Saturn was Qpel/Vauxhall assembled in US GM sold that to the Russians. Nissan isnt going to fund a rival for its products in whats now a tough market when it can take all the profit itself. Once GM succumbed to pressure to offload its european arm Penskes deal was gone.

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