GM's Failed Saturn Brand Goes On The Block
When General Motors unveiled the Saturn in 1990, customers loved the brand's "no haggle pricing" policy. But they're not buying anymore. Saturn has just 1 percent of the market and GM has slapped a "for sale" sign on the brand, as CBS News Business Correspondent Anthony Mason reports.
"They have to sell Saturn. They also probably have to do something with Pontiac," says Kevin Tynan, senior auto analyst at Argus Research.
Tynan says the problem is simple. General Motors has eight brands and 57 models. Toyota sells nearly as many cars and trucks with just three brands and 32 models.
"The cost of trying to put that many models in the marketplace - to design, build 'em and market them - is just too expensive" for GM, says retail analyst Mark Kiness.
The Saturn Aura is built around the same drive train as GM's Chevy Malibu and its Pontiac G6 and they share many of the same parts. But those cars compete against the Toyota Camry, which last month outsold all three GM versions combined, something Kiness says underscores the poor management decisions that have put GM where it is today.
But carmakers can't simply shut down a brand.
"It seems very easy, but it is not a matter of flicking a switch," says Rebecca Lindland of research firm Global Insight.
As GM discovered when they shuttered Oldsmobile four years ago, dealerships have to be bought out - and that can get very expensive.
"It was billions and billions of dollars to shut down Oldsmobile. And that was a pretty small brand," Lindland says.
Selling Saturn won't be easy either. Chinese or Indian automakers might be interested in getting a foothold in the U.S. market, but only at a fire sale price.
"It's certainly a buyer's market. But there's no credit to be had. [And] they're damaged brands to begin with," Tynan says.
And automakers will also pay in loyalty.
"Will these people go out and buy another GM brand?" asks Tom Waurishug, general manager of a Saturn dealership in White Plains, N.Y. "I don't think so."
But for some of Detroit's once revered brands, it's looking more and more like the end of the road.
