With new products, is there life in Saturn?

Brand waits for buyers to gravitate to upmarket orbit

Saturn General Manager Jill Lajdziak: "You want to bring some of your loyalists with you, but we have to cast our net wider."
DETROIT — As General Motors works on its corporate turnaround, a smaller version is under way at its Saturn brand.

After years of selling cars to economy-minded buyers who loved the brand's low-pressure dealerships, Saturn has an all-new vehicle lineup. GM wants to reposition Saturn to attract customers who value European styling and handling and will pay for them.

Customers have yet to arrive in a huge numbers. Through March, Saturn's U.S. sales totaled 48,306 units, down 15.3 percent from 2007.

Saturn officials and others say brand loyalists are unaccustomed to high sticker prices — a well-equipped Outlook crossover, for instance, can top $40,000 — and conquest customers have not yet considered Saturn for mid-sized cars and crossovers.

Rebranding challenge

GM CEO Rick Wagoner admits it will be a challenge to rebrand Saturn.

"We knew what we were doing, which is to change the profile of the kinds of products that we sell at Saturn from basically low-priced cars to cars that compete on the basis of being great cars, European influence, et cetera," Wagoner said at the National Automobile Dealers Association convention in February. "It's fair to say that's not an easy assignment."

Saturn plans to spark sales with a new ad campaign this month. Jill Lajdziak, Saturn's general manager, said the brand needs to go beyond traditional buyers.

"You want to bring some of your loyalists with you," she said, "but we have to cast our net wider."

Saturn leaders met with dealers earlier this month in Washington to discuss how to boost three core products: the Aura sedan, Vue crossover and Outlook.

Two of those products, the Aura and Outlook, are slow sellers. Saturn is on track to sell about 70,000 Auras this year — again well below expectations of more than 100,000 units. Saturn has sold 16,382 Auras through March.

Meanwhile, the Outlook is the slowest selling of GM's three new large crossovers, trailing the Buick Enclave and GMC Acadia.

Saturn sales
First-quarter U.S. sales for key models
 3 MOS. 083 MOS. 07% change
Astra1,477*
Aura16,38213,42822.00%
Ion25112,55598.0%
Outlook6,5505,05429.60%
Vue21,40622,6685.6%
* The Astra went on sale in January.

Rethinking Saturn

Lajdziak said Saturn advertising is addressing the brand identity shift with the theme "Rethink."

Saturn has been "a brand that has rethought everything that it's done in the marketplace, hence 'Rethink,' " Lajdziak said.

This month, Saturn is launching an advertising campaign using the "Rethink" tag line. Initially it will emphasize the Vue and Aura and later will include the Outlook.

One industry analyst is skeptical.

"Tell me why I would not buy a Chevy Malibu or a Toyota Camry or a Honda Accord," says Doug Scott, an analyst at GfK Automotive in suburban Detroit. " 'Rethink' is one thing, but what's the delivery on 'Rethink'? "

Saturn must do more to distinguish its vehicles from import rivals, as well as Chevrolet models built on the same vehicle architectures, Scott says.

The Malibu is a platform mate of the Aura, and the Chevrolet Traverse coming this fall is built on the same Lambda crossover architecture as the Outlook.

"So we have two vehicles that are very nice in the Chevrolet division that are priced better," Scott says. "They will also get significant advertising budgets at Chevrolet. So Jill's job most immediately is to differentiate Saturn from Chevrolet."

Tight budget

Some dealers favor Saturn's marketing approach, especially if it includes an offer on a featured vehicle, says John Pitre, general manager of Motor City Auto Center in Bakersfield, Calif.

"That seems to be the direction they're going by taking a rather complicated marketing strategy at Saturn, where you've got cars from $15,000 to $27,000," Pitre said. "You have to talk about them all, but you don't have the marketing budget."

The Aura and Outlook suffer from what some dealers say is a lack of visibility. Inside GM, some blame the Outlook's slower sales on a lack of advertising, fewer Saturn dealers compared with Buick and GMC and a less exciting exterior design than the Enclave and Acadia.

Also, Saturn's vehicles are coming in at higher price points than Saturn loyalists have seen. The Aura starts at $20,395 and the Outlook at $28,995. Both prices include shipping. A fully loaded Outlook can cost $45,320, a Saturn spokesman said.

To compound matters, GM has no room to boost its marketing budget, a source familiar with GM's marketing plans said.

"It's not visibility per se; it's more insidious than that," says Jim Hall, managing director of 2953 Analytics, an automotive industry consulting firm in suburban Detroit. "The problem is — and it's one they will overcome, but it'll take time — Saturn as a nameplate is not on the consideration list for people who want large SUVs and mid-sized cars."

Lajdziak admitted that most consumers do not think of Saturn for large passenger vehicles.

"There's no question we have to continue to build the awareness of our new products. That doesn't happen overnight," she said. "You don't just walk into a segment. You have to earn your way into the segment." 

You can reach Jamie LaReau at jlareau@crain.com

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