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Old 03-02-2007, 10:37 AM   #1
NYCshopper
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Default At GM, Lutz's Bets Starting to Pay Off (BusinessWeek.com)

At GM, Lutz's Bets Starting to Pay Off (BusinessWeek.com)

http://www.businessweek.com/autos/co...301_205958.htm


Quote:
Saturn helps boost GM's February sales but Ford and Chrysler dip deeper. Toyota and Honda continue their hot streak

In an otherwise bleak month for Detroit's carmakers, General Motors (GM) had a strong month powered by a big boost from its rekindled Saturn division.

The long-starved Saturn brand saw sales rise 60%, helping GM post a 3.5% gain in a flat car market. New models like the Saturn Aura midsize sedan—voted the North American Car of the Year in January—and the Outlook crossover sport-utility vehicle seem to be winning converts. And there are signs that import buyers will give the brand a look.

Growth at Saturn is a sign that GM Vice-Chairman Robert Lutz's new cars are starting to gain traction with consumers. "Saturn finally has some new cars to sell," says longtime industry watcher Mary Ann Keller, who does consulting work and sits on the board of dealer Lithia Automotive (LAD). "They always had good dealers; it was just a question of getting product."

Detroit Rivals Falter
Make no mistake, GM's problems are far from solved. Sales are down more than 6% so far this year. And the boost in February, when retail sales rose 11% for GM, was helped in part by 0% financing deals offered in the middle of the month.

While GM had a pretty strong month, its crosstown rivals Ford Motor (F) and DaimlerChrysler's (DCX) Chrysler Group both took a hit. Ford's sales fell 13% and Chrysler's were off 8%. Meanwhile, Toyota (TM) keeps surging ahead with a 12% jump—record sales for February. Honda (HMC) sales rose 3%. Kia was up 13.5%. Mitsubishi was up 22%. Audi was up 37%. BMW was up 15%.

Growth from Saturn could be a big boost for GM. The brand took the U.S. by storm when it was launched in the early 1990s with just one model, the S-series compact. Buyers loved the no-haggle pricing strategy and folksy, friendly dealers. But years of neglect and a weak midsize sedan, the failed L-series launched in 1998, kept the brand from realizing its potential.

Running with the Imports
Lutz has long said that Saturn was GM's best bet to win import owners, so he gave the brand the Sky roadster and Aura last year, as well as the Outlook, in a play to win market share back from the likes of Honda, Toyota, and Nissan (NSANY). Soon enough, Saturn will replace the woeful Ion compact with the Astra, the popular compact sold in Europe by GM's German Opel brand (see BusinessWeek.com, 12/14/06, "For Saturn, the Time Is Now").

Edmunds.com says that of the top 10 vehicles cross-shopped by Saturn buyers across the brand's lineup, nearly all of them are import nameplates. No other GM brand comes close to that level of cross-consideration. Conversely, says online car shopping site Edmunds.com, Saturn is seeing huge spikes in reverse cross-shopping as well; that is, shoppers who had Honda, Nissan, Toyota, and Volkswagen on their lists but decided to look at a Saturn model as well. Saturn reports double- and triple-digit increases in reverse cross-shopping figures with the new vehicles it has launched.

Saturn is also doing well on the West Coast, traditionally hostile territory for domestic brands. Saturn says its No. 1 dealer in February, based on sales volume, was in Los Angeles. Four of the top 10 Saturn dealers are in the L.A. area.

On the Shopping List
But Saturn's total sales volume is still relatively small when compared to GM's bread-and-butter Chevrolet division. Chevy sold 187,000 vehicles last month to Saturn's 22,000.

But Saturn sells mostly to retail customers, as opposed to other GM passenger car brands that do significant business with rental agencies and corporate fleet customers.

GM is working to reduce its reliance on low-margin rental car sales. Paul Ballew, GM's executive director of global market and industry analysis, said GM cut fleet sales by 15,000 vehicles in February as the company tries to focus on selling higher-priced cars to retail customers.

Though Saturn's numbers are small—just 1,900 Outlooks and 3,800 Aura sedans sold in February—there are reasons for Saturn to be optimistic. Edmunds.com tracks what buyers look at when shopping for a new car. Aura buyers most commonly shop the Toyota Camry, Honda Accord, and Nissan Altima, an indicator that at the very least, Saturn is doing a pretty good job of keeping some of its shoppers from defecting to Japanese family cars.

Similarly, the Outlook, which hit the market late last year, gets looks from import shoppers. About one-quarter of Outlook buyers look at its stablemate, the GMC Acadia, but the next two models on their shopping list are the Mazda CX-9 and Honda Pilot crossover SUVs.

Back to Branding
Saturn was once GM's brightest light when it came to advertising. The brand, however, dimmed the last five years as Saturn ads lurched from campaign to campaign and slogan to slogan. Last month, though, Saturn General Manager Jill Ladjiak fired agency Goodby, Silverstein & Partners, San Francisco, and hired Deutsch/LA, which aired its first Saturn work during this week's Academy Awards telecast. The ad showed Saturn Aura owners who bought their cars before the car was named North American Car of the Year, opening up a box containing the actual award. Deutsch had the idea that owners should house the award like National Hockey League players on the championship team each get to take turns housing the Stanley Cup. When one Saturn owner is through, he or she mails it to another.

Saturn's brand strength has long been in its dealer service and the sense of community Saturn owners have felt since the brand was launched as "A Different Kind of Car Company." The new ad strategy seems to be to foster that part of the brand again without being folksy or old-fashioned.

For Saturn and GM, the challenge will be maintaining momentum. Ballew says he expects some heavy competition and, as a result, higher incentives from other carmakers. But at least Saturn is off to a good start.










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Old 03-02-2007, 11:16 AM   #2
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Thumbs up Lutz the man!

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Old 03-02-2007, 11:42 AM   #3
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wishing Saturn all the luck they can get

someday I may be driving one!

Redline Astra please!
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Old 03-02-2007, 12:34 PM   #4
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Good signs for GM.... sometimes it takes to hit rockbottom to get back into the swing of things
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Old 03-02-2007, 01:05 PM   #5
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Originally Posted by BigElm View Post
Good signs for GM.... sometimes it takes to hit rockbottom to get back into the swing of things
or a car guy to run their product line division. i.e. bob lutz.
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Old 03-02-2007, 01:07 PM   #6
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Originally Posted by BigElm View Post
Good signs for GM.... sometimes it takes to hit rockbottom to get back into the swing of things
Yeah, but sometimes that's just the proverbial "Dead Cat Bounce."

Good luck to GM, though.
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Old 03-02-2007, 02:16 PM   #7
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I'd rock a sky if I had extra cash.
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Old 03-02-2007, 03:26 PM   #8
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Good for GM, heres hope they take the beating they have been given for years to heart and win back the market with good product.
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Old 03-02-2007, 03:30 PM   #9
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Saturn is such a small fraction of GM's sales, that they could continue to sell more and more every year, but GM still go tits up. I'm not holding my breath.
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Old 03-02-2007, 03:41 PM   #10
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GM has a very long way to go with no quarantee they may not file chap. 11 but its nice to have a bright spot for a US automaker, its been a long time.
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Old 03-02-2007, 03:42 PM   #11
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Originally Posted by LastResort View Post
Saturn is such a small fraction of GM's sales, that they could continue to sell more and more every year, but GM still go tits up. I'm not holding my breath.
It's a start... which is what we've been waiting for.. hopefully this will saturate to the rest of the brands.
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Old 03-03-2007, 01:39 PM   #12
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Its nice to have a guy that has the publics interest in mind finally at GM. Lutz actually tries to bring what the people want out instead of what the fat cats in business suits at board meetings want.

Ultimatly, this will be my next car.
http://www.pontiac.com/g8/
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Old 03-03-2007, 06:47 PM   #13
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don't you guys think it's sad since all the vehicles that helped them = from Europe?
IMO the only thing that is truely American and very nice right now in GM are the new full size crossovers they got. The Saturn Outlook, GMC Acadia and that Buick thing. According to Motortrend, the head person behind the project is some woman.
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Old 03-04-2007, 12:09 PM   #14
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Quote:
The long-starved Saturn brand saw sales rise 60%, helping GM post a 3.5% gain in a flat car market. New models like the Saturn Aura midsize sedan—voted the North American Car of the Year in January—and the Outlook crossover sport-utility vehicle seem to be winning converts. And there are signs that import buyers will give the brand a look.
That last sentence is the more important part of that whole article. If import-buyers at least give Saturn a LOOK... especially with this new improved lineup, then Saturn - and GM as a whole - actually have a chance.

There is no doubt that many of GM's brand new cars are light years ahead of the old models, but if no one is willing to look at them, then no one is going to buy them. And the fact that many people still don't know that Saturn is a division of GM helps Saturn's image and reputation.

Cadillac had a huge transformation just a few years ago. Saturn is just about transformed. While both of those brands have low volumes, their turnaround will help guide GM in doing the same to it's highest volume line - Chevy.
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Old 03-04-2007, 04:51 PM   #15
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Why are you guys thank Lutz? You should be thank Opel!
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Old 03-04-2007, 07:55 PM   #16
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Why are you guys thank Lutz? You should be thank Opel!
For the eleventeen millionth time, Opel is a division of GM... not any different than Lexus is a division of Toyota and Acura is a division of Honda. Why do you people make such a huge deal about this? If not for the Euro-Accord, Acura would never have gotten the TSX sedan. Same deal for countless other cross-regional models sold under a different name depending upon the area.
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