Penske wins Saturn!
General Motors Corp. has a tentative deal to sell its Saturn brand to former race car driver and dealership group owner Roger Penske, according to two people briefed on the deal.
Penske Wins
More details coming today.
GM strikes tentative deal to sell Saturn brand to Penske Automotive Group dealer chain
THE ASSOCIATED PRESS
2:50 PM EDT, June 5, 2009
General Motors Corp. has a tentative deal to sell its Saturn brand to auto racing magnate Roger Penske's dealership group, both companies said Friday.
Penske has signed a memorandum of understanding that would give his dealership chain, Penske Automotive Group, Saturn's 350 dealerships, the companies said. Penske said that he expects to offer all the dealers new franchise agreements and will retain all 13,000 Saturn employees for now.
"I would expect that the model that we're putting together, the distribution model, will be profitable day one," Penske said in an interview with The Associated Press. "We'll have less costs. We'll not be in the manufacturing side."
Neither Penske nor GM would say how much Penske is paying for the brand. Penske said he expects the deal to close in the third quarter. Initially, GM will continue to produce on a contract basis the Saturn Aura sedan as well as the Vue and Outlook SUVs. But Penske said he is in talks with global car manufacturers about building Saturn cars in the future.
Continue reading latest update on this.
Penske Wins
More details coming today.
GM strikes tentative deal to sell Saturn brand to Penske Automotive Group dealer chain
THE ASSOCIATED PRESS
2:50 PM EDT, June 5, 2009
General Motors Corp. has a tentative deal to sell its Saturn brand to auto racing magnate Roger Penske's dealership group, both companies said Friday.
Penske has signed a memorandum of understanding that would give his dealership chain, Penske Automotive Group, Saturn's 350 dealerships, the companies said. Penske said that he expects to offer all the dealers new franchise agreements and will retain all 13,000 Saturn employees for now.
"I would expect that the model that we're putting together, the distribution model, will be profitable day one," Penske said in an interview with The Associated Press. "We'll have less costs. We'll not be in the manufacturing side."
Neither Penske nor GM would say how much Penske is paying for the brand. Penske said he expects the deal to close in the third quarter. Initially, GM will continue to produce on a contract basis the Saturn Aura sedan as well as the Vue and Outlook SUVs. But Penske said he is in talks with global car manufacturers about building Saturn cars in the future.
Continue reading latest update on this.
Replies to This Discussion
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Permalink Reply by David Ruggles on -
Good News! Penske will know what to do with their unique dealer arrangement.... All they need is some good product and marketing!
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Permalink Reply by Bill Pickerill on -
Will the Blue Duece be a Saturn insted of Dodge?
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Permalink Reply by Bob Crocker on -
Finally a bright light in the gloom of GM. Mr Penske's track record in his business ventures is very impressive and I am sure this will follow that path.
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Permalink Reply by George Toth on
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This should be interesting. Roger will be tested as that dog has done nothing but cost GM billions of dollars every year for the last twenty years. Of course now it will be nothing more than a marketing arm for some foreign product, hardly the hype we have heard in the past.
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Permalink Reply by Tom White Jr. on -
Quote from Penske, "I would expect that the model that we're putting together, the distribution model, will be profitable day one," Penske said in an interview with The Associated Press. "We'll have less costs. We'll not be in the manufacturing side."
Sounds pretty ambitious but good news for Saturn dealers nonetheless...
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Permalink Reply by Greg Goebel on -
Interesting.
At first I want to be nothing but happy. Being a dealer advocate I know that the Saturn dealers have been hanging on to their businesses - many by the skin of their teeth - over the last few months. I know that the local Saturn store would have been hard pressed to hit a combined 20 new/used sales in May, and I don't care how good of a dealer you are, that has to leave a mark. Does the name "Penske" mean enough to be the answer for these already suffering dealers. I don't know. For those that have been doing a good job in used cars, probably. For the others - I have my doubts, as this isn't an "overnight" magic pill.
Now to the real question - can the "Penske touch" remain in tack and transform a company with a special culture and some dedicated dealers into enough sales revenue to create a profit?
Penske claims he expects to be profitable immediately. That is ambitious. My biggest concern is that Penske's corporation will be leveraged in a major way. Already stock analysts have shown their concern with their stock watches. He must find product that will fit within the Saturn brand, be off high quality, and will be desirable to the buying public. The last time I looked, Saturn had some great product and couldn't drive sufficient demand to keep the product viable. Why will Roger Penske's new products be any different?
I truly hope that Penske can continue his run of automotive magic. This is one time that I am not betting heavily on it.
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Permalink Reply by Chris Stevens on -
I can tell you this, running Saturn stores now since 2002; the product right now is very strong. The downside is this. It is WAY over priced for what it is! We have had price increase upon price increase, and margin DECREASE upon margin decrease and we are still not that competitive. Also, what was Saturn created to do? Be the import fighter and increase GM's overall market share. The reality is I compete against other like GM products. The best days of Saturn were when we had the generic, plastic cars that ALL looked the same, and started at $9,995 and TOPPED at $20,000. They all got 35 MPG or better, and people loved them. Now.. We're just another car.. For us, Penske is probably one of the best case scenarios. I was afraid that GM would do what was best for them, and not put us in a situation where we would possibly compete with Chevy, or the other brands and threaten to take market share away. We too have survived on used cars, along with a healthy finance department, and an ever growing fixed operations. Penske may be buying 350 Saturn store, I guarantee not all will make it to see the day.. Good for me, bad for others.. Only time will tell, for now, have to worry about THIS month!!
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Permalink Reply by jim smith on
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Greg as you know optimism is what we car people live and breathe on. Often times with nothing but good old can do spirit. Saturn dealers now can sell used cars and their fixed coverage is competitive with anyone and yes we are still in business. If by the hair of our chinny chin chin.
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Permalink Reply by Robert B Furman on
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I have a tremendous amount of respect for Penske - he always does things well.
This time he may be biting off too much.
GM has subsidized Saturn for years.As a Chevy dealer I've felt Saturn robbed us of new product for years.
The Aura was an exclusive for a year before Malibu came out.Saturn had Vue for several model years before Equinox.The Outlook came before the very successful Acadia,Enclave and Traverse.
I first began working at Chevrolet in 1970.Back then the biggest fear was the government splitting out Chevrolet from the other divisions.GM has never been the same.
I believe the concept of going back to a strong Chevy brand and smaller more niche like Buick/Cadillac/GMC is a very sound approach.
In the auto world low price point yields the best volume.
GM has for years diminished the low price point and sought out 40,000 plus price point.This is not the way to MARKET SHARE GAINS!!!
We must endear ourselves to the common man with value (low price point) - the rest will follow.
Focus on building Chevrolet as the dominnat brand and trickle up to GMC,Buick,Cadillac will follow.
This is a sound plan - it relies on historical success patterns and not smoke and mirrors embellished with factory talk.
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Permalink Reply by Chris Stevens on
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"GM has subsidized Saturn for years.As a Chevy dealer I've felt Saturn robbed us of new product for years."
"The Aura was an exclusive for a year before Malibu came out.Saturn had Vue for several model years before Equinox.The Outlook came before the very successful Acadia,Enclave and Traverse."
I agree with that.. The funny thing is, although we (Saturn) always had the product first, they NEVER marketed the product the way they should have! We may have the nicest product in the world, but if nobody knows about it, what's the difference?
© 2010 Created by Greg Goebel.
