What’s the Journal of Money Think of the Latest Saturn?
That’d be the Wall Street Journal, in a review by their columnist Jeff Sabatini, and the 2008 Saturn Astra XR, which is the domesticated version of the German Opel Astra. It’s the model that replaces the Saturn Ion.
Answer: though the Astra was the best-selling car in Europe in 2006, it’s underpowered, though agile, with a “drab” interior a user unfriendly instrument panel. Indeed, the Journal quotes General Motors’ vice-chairman Bob Lutz as saying that one of the great joys in life is driving a small, underpowered car with a manual transmission and getting all the performance possible out of it. In the Journal’s view, that’s an apt description of the Astra.
The good: it’s cheap, with a base price just under $15,000 and loaded at just under $21,000. Also, it’s “nimble,” even in the standard version, but especially with the optional sport suspension, which includes 17” wheels and tires.
(more after the jump)
The bad: low power (138 hp, 125 lb-ft of torque), interior finish that’s dull and uninspired, difficult-to-use small buttons on the dashboard and amber instrument illumination which the Journal calls “unpleasant.”
So, what’s the most interesting part of the review?
The financial question.
The columnist segues from his review – this is, after all, the Wall Street Journal – to ask just exactly how it is that GM can make any money selling the Astra in the States. GM projects sales of about 30,000 to 40,000 per year. To give you a comparison, GM sells about 35,000 Corvettes annually.
Due to the exchange rate difference between the Euro and the dollar, the Astra sells for less in the U.S. than anywhere in Europe – in fact, it’s going for $6,000 to $7,000 less in the U.S. than in Belgium, where it’s manufactured.
In light of that, how’s GM making any money selling it here? The column speculates that the company has already amortized the development and tooling costs over the European production, so that the model can make money in the U.S. if it sells for more than it’s actual cost of production.
Still, the car doesn’t come across as a bargain, measured against the VW Rabbit S, Subaru Impreza, or Mazda 3. The competition is priced somewhat higher and doesn’t have quite as good overall gas mileage, but all three of the competitors have a lot more power.
Saturn continues to be a division striving to develop an identity. Part of the Saturn problem, of course, is its history. The division was created by the late Roger Smith when he was GM president. Perhaps because he wanted to side-step the corporate structure at GM which, at that time, still reposed enormous power in the divisional general managers, Smith created Saturn as an entirely new division to sell a quality inexpensive car made with the latest methods and materials.
That, of course, is what Chevrolet was supposed to be doing. While Saturn thrived so long as Smith was in charge of the company, it didn’t have an encore for its original model, and it became just another GM brand when the corporation attempted to expand the product line-up.
Today, viewed in a certain perspective, Saturn is GM’s healthiest division. It, alone among the various GM brands, is not burdened with an excessively large dealer network. Originally intended as an import fighter, some of its models – notably the Vue – appear to be selling well against import competition.
Yet, there’s still a sense that General Motors isn’t really committed to Saturn and the Journal’s review of the Astra underscores the reason for that impression.