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The Saturn Saga Continues
Jerry Flint, 05.23.06, 6:00 AM ET

New York - Nothing is ever simple for Saturn, the General Motors nameplate that seemed about to be reborn. Saturn was to become sort of an American arm of GM's German division, Opel. The apparent plan was for most future Saturns to be close derivatives of Opel designs but to be built in the U.S.

GM (nyse: GM - news - people ) wanted to cut its product-development spending on Saturn, so that is why Vice Chairman Robert Lutz turned to Opel. Given all of GM's current problems, there is some logic to this strategy.

As I said, nothing is ever simple with Saturn.

Let's start with the Ion, a small car introduced as a 2003 model to replace the original little Saturn passenger car. In short, the Ion has been a big disappointment. At one time, the vehicle that the Ion replaced sold 300,000 units per year, but the Ion posted only 101,000 sales in 2005. Frankly, cars such as the Honda Motor (nyse: HMC - news - people ) Civic, Ford Motor (nyse: F - news - people ) Focus and Toyota Motor (nyse: TM - news - people ) Corolla outclass the Ion. Consumer Reports calls it "disappointing."

Now the word is that GM is going to kill the Ion, probably at the end of the 2006 model year. Despite its flaws, the Ion is still the best-selling Saturn model. The word is that GM has looked at various plans for replacing the Ion, but it will not have a replacement ready at the time it pulls the car off the market. This does not sound like good management strategy, and it cannot be good for Saturn dealers.

Automotive News, the trade publication in Detroit, says that GM will be importing the small Opel Astra from Europe to replace the Ion. But the imports will not start coming in until after the middle of next year, well after Ion production has stopped. According to Automotive News, GM might bring in 20,000 to 40,000 Astras per year. It is likely to be a small number because the euro/dollar relationship makes it hard to bring in a low-priced car from Europe. Volkswagen is losing $1 billion per year.

It's reasonable to think that one day Saturn will be producing an Astra-like car at one of GM's U.S. factories. If that happens, it will be a couple years from now. In the meantime, GM is replacing a car that accounts for 100,000 sales per year with one that is likely to sell about one-fifth of that amount. In this business, continuity is important. It would have made more sense to improve the Ion and keep selling it until an American-made alternative was ready.

Then there is the Vue, the next best-selling Saturn (92,000 sales last year). GM apparently also plans to replace this little sport utility vehicle with an SUV derived from Opel. That might happen in two years. One Detroit news source says GM will build the Vue successor in Mexico.

GM executives never had much love for Saturn, the brainchild of former GM Chief Executive Roger Smith. Nor does the one-time-quasi-independent Saturn plant in Spring Hill, Tenn., have many fans in GM's executive row. Half of the plant will go down at the end of this year when today's Ion goes out of production.

I'm not aware of another product program slotted for Spring Hill, so once GM phases out the current Vue, the company seems likely to shut the Tennessee factory--the original home of Saturn. Shuttering that facility would officially mark the end of the hopes and dreams of "a different kind of car, a different kind of company."

What about the rest of the Saturn lineup? Last month, the division introduced the Sky two-seat roadster, a sporty little car that will pull people into the showrooms but probably will not generate much more than 10,000 sales per year in this low-volume segment. Saturn's Relay minivan, a rehashed version of an old GM design, is a flop. It posted only 16,000 sales last year, and it's collapsing now, with just 2,348 sales in the first four months of 2006.

Coming this fall is a handsome new sedan, the Aura, which shares its underpinnings with GM's European models and is about the same size as its close cousin, the Chevrolet Malibu. The Aura gets an attractive interior and, as an option, GM's most advanced V-6 motor, a 3.6 liter, which is also available in the Cadillac CTS. The Aura will replace the Saturn L sedan, a sales bomb that GM killed about a year ago.

A larger SUV, a crossover called the Outlook, also arrives in Saturn dealerships this fall, as does the Sky "Red Line" roadster, which has 260 horsepower (the regular Sky has 177 horsepower), as well as a fuel-stingy hybrid Vue "Green Line" model.

Up to this point, affordable vehicles have been the focus of Saturn, but some of these new models (Aura, Outlook and Sky "Red Line") will likely sell in the $30,000 range. While the Aura may turn out to be Saturn's best sedan yet, the expected price for a well-equipped model pits it against the Toyota Camry, Honda Accord and a slew of other excellent sedans.

I was so impressed when I first learned about these new models that I figured Saturn could sell 300,000 vehicles next year, compared with fewer than 215,000 the past couple years. Forget about it! Saturn might yet come back, but the process is just going to be slower than I originally thought, especially if it follows through on its current plans to drop the Ion and, later, fill the product gap with low-volume imports of the Opel Astra.

This is another sad GM story: Saturn has some of the nation's best dealers. The car has a good name among the people. With the right cars and trucks, Saturn could be selling 300,000, maybe 400,000 vehicles per year.

http://www.forbes.com/columnists/2006/05/22/flint-saturn-cars-cz_jf_0523flint.html
 

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Thanks Axel. Good read.

Its amazing to think Saturn will abandon the car class that made it so popular by removing the entry level coupe/sedan from its line up. Perhaps they will squeeze out enough models to prepare for whatever next model Bob Lutz is dreaming up right now.
 

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I don;t understand how they come up with the Astra derived compact will only sell 1/3 of what the Ion does? they haven;t even seen the car yet and they are predicting that? sounds just like their review of the Sky, they do not Know a dang thing about what they are talking about and it is reflected in their quotes of Consumer reports...
you want to know what I think of Forbes? Forgettaboutem:nono:
 

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People are going to Saturn dealerships these days just to get a look at a SKY. I know of at least 2 cases where they left with a car so the new look will deffinetly work for Saturn.
 

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I was going to buy my son an Ion...and my mother is interested in the sports utility vehicle....the Sky is what even had anyone looking..it is bad form to introduce your halo car and then deep six your other sellers without a plan.
 

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Forbes is not pegging the amount of Astra's on voodoo. GM can only import so many per year form Europe due to UAW contracts. Also cars are MUCH MORE expensive in Europe (as I am sure some of our European posters can attest). The base Opel Vectra (Malibu/G6/AURA) costs about 20k Euros, mind you a 1 Euro is about $1.20. That's a 1.6L too I think! So basically GM cannot afford to import more than 40,000 Astra's and sell them near $20k
 

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From what I read and heard on the volume of "Astras"... they will import up to 40,000 from Europe until the US plant is up and running... this plant would be up within the 1st model year if all goes well. That is what I remember.
 

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It's going to take time to turn Saturn arround. I know everyone here loves their Saturns but in general most people I talk to don't share the outlook on the brand that everyone here does. Saturn is GM's lowest volume division right now (besides HUMMER and SAAB of course, but they're not meant to be high volume). Killing the ION during the rebirth of Saturn might not be the wisest idea, but it probably was coming anyways. Importing the Astra just really seems like a bandaid. They need to just focus developing a car based off the next generation Epsilon chasis (current Cobalt, G5, ION) to wow from the get go. I keep hearing rumors of the next Epsilon being FWD/AWD capable, and if GM threw a revised LNF in there you're talking about a stunner from the get go (as long as they don't screw up the styling again).
 

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Opel Vectra (Germany)

DuSpinnst said:
Forbes is not pegging the amount of Astra's on voodoo. GM can only import so many per year form Europe due to UAW contracts. Also cars are MUCH MORE expensive in Europe (as I am sure some of our European posters can attest). The base Opel Vectra (Malibu/G6/AURA) costs about 20k Euros, mind you a 1 Euro is about $1.20. That's a 1.6L too I think! So basically GM cannot afford to import more than 40,000 Astra's and sell them near $20k
Hey DuSpinnst,

because I know your excellent knowledge in German language (Cologne slang? :D ) it's not necessary to translate for you.

Here is the list >>> View attachment Vectra_price.pdf

For the other members:

Upperline prices inclusive tax (MwSt means VAT 16% now, 19% next year:mad: )

It's a very long list because we have so many options here in Germany, that's the the to have salesmen to make the customer choose as many options as possible.
I don't think you have so many options in the states, or am I wrong?
 
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