New Saturn product blitz is laden with risk

Dealers' challenges
Sales staff

  • Learn about awd system, as well as awd and 4wd systems marketed by competitors

  • Answer questions about Saturn's CVT and other innovations

    Service and body shop

  • Learn how to repair and service awd system, new engines and transmissions

  • Learn how to repair the Vue's steel space frame

    All dealership personnel

  • Maintain Saturn's high customer satisfaction ratings

  • Saturn and its dealers face a huge challenge: managing the introduction, sales and support of an expanded and freshened lineup aimed at shaking up the company's lackluster image.

    Dealers and analysts agree Saturn is long overdue for new products. But a product blitz for a small-volume brand not known for product change or innovation is laden with risks, they say.

    The Vue, aimed at the growing compact sport-utility segment, went into production this month. Next spring the 2003 L series arrives with new interior and exterior styling, and Saturn's volume make, the S series, will be replaced next fall by the Ion.

    The product blitz follows years of stagnation at Saturn. The S series is 11 years old, and the L series, which debuted in 1999, has been a sales disappointment.

    A major hurdle for the Vue will be cutting through the advertising clutter of sport wagons already on the market.

    'No strategy'

    "Saturn's biggest problem is that there has been no strategy," said industry analyst Todd Turner of Car Concepts in Thousand Oaks, Calif. "A strategic plan would have had products coming out well timed and well paced to make each one have an impact on the market before the next one comes out."

    Introducing two products during 12 months would have been better, Turner said.

    In defense of the launch strategy, Jill Lajdziak, vice president for Saturn sales, service and marketing, said the 2003 L series marketing won't get the same prominence as the Vue and Ion.

    "We will put emphasis on it. It is very important, and the refresh looks terrific. (But) will it be at weight levels of the Vue or Ion? No, it won't be."As for preparing each dealership staff, Lajdziak said, "We have a very intensive training initiative going on for all of the products for all of our retailers."

    For example, a dealership's staff is required to attend a one-day program that includes brief comparison drives in the Ford Escape, Toyota RAV4, Honda CR-V, Hyundai Santa Fe, Kia Sportage and Jeep Liberty. But one dealer, who praised the overall program, said he counted the amount of time he spent in each competitor's vehicle "in seconds, not minutes."

    One risk for Saturn dealers is that if they fail to study their new competition, they may stumble. For example, a staff that has sold only front-wheel- drive cars now has to be knowledgeable about four-wheel-drive sport-utilities.

    The sales staff must be prepared "to compete with our customer's knowledge of our competitors' products," said Joe Koebke, general manager of Saturn of Des Moines in Clive, Iowa.

    Back-shop issues

    Then there are new service issues for Saturn technicians.

    With the new vehicles, "We're going to have different engines, different chassis, different mechanical and service-oriented problems," said Rob Ogden, new-car sales manager at Saturn of Glendale in Glendale, Ariz. "Maintaining the Saturn philosophy of being No. 1 in customer satisfaction - that's going to be our biggest challenge."

    For example, the Vue will be the first GM vehicle in the United States with a continuously variable transmission. The automatic transmission has 45 percent fewer parts and offers fuel economy similar to a manual.

    On the sales side, the risk is that the staff may be challenged to explain why the transmission does not have gears and uses a large steel belt instead.

    But with Saturn being a test bed for a new transmission that over the next few years will be offered gradually in other GM products, the greater risk is that any failures of continuously variable transmissions will hurt the brand and the dealers.

    "We know that one of Saturn's strengths is customer satisfaction," said Tom Libby, a director of J.D. Power and Associates. But if Saturn and its dealers are not adequately prepared to handle the new products, the increased volume, and provide excellent service and mechanical support, "it backfires and causes negatives."

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