Saturn’s salvation may lie in its independence
We like to think that the U.S. has all the cars that anyone could ever want, but one quick look around the Geneva Auto Show proved very wrong. Of course I knew that we do not sell all the brands in the world, but the show gave a physical representation of how much we were missing out on.
There are plenty of brands out there with production capacity, but no U.S. distribution chain. That’s when I remembered Saturn will soon be broken off from General Motors, and it will be a distribution chain in need of a product.
Those who have read my commentaries before know Saturn holds a special place in my heart, so I am a little bias about keeping it in business. Also many would argue that the conditions U.S. economy would not favor a new car expansion. But I think this is goes to the heart of Warren Buffet-style investment strategy: if others are scaling back, then its time to expand.
It will of course sound simple on paper, but it’s sill worth taking a look at what some of there companies may have to offer…
Here’s a company that’s European, independent, and hasn’t been in the U.S. since about 1992. The combined company of Peugeot and Citroen make for Europe’s second largest carmaker, and its distribution chain still goes as far as Mexico.
The frugal nature of many of Peugeot/Citroen’s current offerings, combined with the distinctive styling, would make for a distinctive alternative on for the mainstream American market. Saturn’s current customer base would likely embrace the quirky nature of these cars, and Saturn’s large distribution network could help eliminate some of the problem’s with French cars I outlined a few months ago.
I recently drove a Peugeot 207 SW in England, and I was impressed but this wagon/hatchback. It was solid and lively. The suspension wasn’t as tight as other European offerings, which meant it wouldn’t be my first choice, but many Americans like a softer ride. This would be an easy way for American’s to get a car with European styling, and American ride quality.
Opel would easily be my first choice. Not only because they are currently supplying Saturn with cars, but also they make some of Germany’s best budget-minded vehicles. I’ve had extended drives with the Corsa and the Insigna (more on this upcoming in TopSpeed). Both exceeded my expiations and left me with a smile on my face.
The only problem with Opel is the distribution chain. General Motors is having a tough time breaking even importing Opels to Saturn dealerships. Once both Saturn and Opel have their independence, it will likely be near impossible to have the whole Opel line-up make it to the U.S. on budget.
But there are some cars that are easier to bring in than others. For example, the Corsa is made in Mexico, so that may not be too hard to bring in. The Insignia is currently only made in Rüsselsheim, Germany. So while it may be ten times better than most domestic family sedans, it will also be hard to get in dealerships without ten times the cost.
The idea solution is to have multiple European brands sold through Saturn’s distribution network, so that the Opel that can remain practical can still have a home in the U.S.
The large Indian manufacturer has a lot to offer with its manufacturing, but not a lot in its product lineup. The company has a lot more cars available than just the Nano, but none are very exciting. The best thing that Tata has to offer is a great business mind heading up the company.
As the luxury car market is slowing down, Tata CEO Ratan Tata has been quoted many times about the importance of expanding the lineup in the Tata-owned Jaguar. He understands the importance of keeping a strong presence, so that when the market does recover, Jaguar will not only be ready, but its image will be elevated as well. With that kind of mind and presence at work, Tata’s offerings may not stay boring for long, so Saturn may want to hop in bed now.
This is a thought out of desperation. The automaker is possibly the best of what China has to offer, but that is not saying much. I had a chance to kick the tires of its line up in Geneva, and while the build-quality seemed to be ok, there was not one part of the cars that I found exciting. If Saturn would become the importer of these Chinese cars it would redefine “cheap and honest transportation”. This lineup would definitely bring down Saturn’s image (yes there is a lot further to sink), but it would keep new cars in the dealerships and distinctive products on the market.
The biggest hurdle to establishing any of these cars with Saturn is capital. Money is extremely hard to come by right now. But with enough capital to weather a few year of little or no profits, it will mean an established, independent Saturn that can thrive when conditions improve.
Pipe dream? Yes.