Saturn to keep no-haggle setup
Your Feb. 21 editorial correctly notes that 'Saturn stands at the crossroads.' However, I want to reassure your readers that Saturn will remain true to its values as we execute a long-term plan to grow our brand. This means that Saturn will not 'bend its rules a tad,' as your editorial suggests.
Right from the start, many people in the industry questioned our no-hassle, no-haggle pricing. What some observers didn't understand is that Saturn's pricing principle is not just a tactic. It is a value-based philosophy based on our belief in the enduring power of relationships built on trust.
No-hassle means that Saturn retailers are up-front about all elements of a vehicle's price, including financing and leasing information. No-haggle means that the retailer should stick to whatever price it sets and that all customers should be treated equally. That's why all Saturn marketing programs will remain consistent with no-hassle, no-haggle pricing.
As for the L series, we knew that breaking into the mid-sized market would be a formidable challenge. The mid-sized market is the toughest in the industry. We never anticipated overnight success.
We are continuing to build awareness for the L series with aggressive new advertising. We are also addressing sales with new lease and financing initiatives that are consistent with our no-hassle, no-haggle approach.
The L series also is continuing Saturn's success in bringing new customers to General Motors, with 69 percent of buyers indicating that they would have bought or leased a non-GM vehicle had the L series not been available.
CYNTHIA M. TRUDELL
Chairman and President
Spring Hill, Tenn.
Analyst defines `doom' report
If Harold Wells' (Letters, Feb. 28) first inclination 'was to tear apart the clearly flawed conclusions' in my report, I wish he would have. Your story on my report was headlined 'Doom looms for traditional dealers, analyst declares' and appeared in your Feb. 14 issue.
I stand by everything in my report. But rather than providing insight into where he thinks my analysis falls short, Wells suggests that Goldman Sachs is trying to 'promote its self-interests' because of the firm's investment in CarsDirect.com. Anyone who understands the brokerage business knows that investment research is independent of the firm's investment banking activity.
Wells suggests that my report minimizes the contributions of dealers, 'ignores the important role dealers play in satisfying millions of customers each year' and 'underestimates the ability of entrepreneurial dealers to compete and adapt.'
I don't minimize the contribution of dealers. Rather, I suggest that a new type of dealer is going to make the same contributions with higher order fill rates and a lower cost to serve.
I don't ignore the role that many high-quality auto dealers play in satisfying their customers. Unfortunately, many dealers don't satisfy their customers' needs at all. In fact, it's the public's collective dissatisfaction with automobile retailing that is opening the door to alternative channels. Perhaps Wells hasn't seen the data indicating that 40 percent of new-car buyers would prefer to buy direct from a manufacturer - avoiding the dealer - even if there were no cost advantage in doing so. And I certainly don't underestimate the ability of entrepreneurial dealers to compete. In fact, an aggressive Net-savvy dealer is more likely to win this war than a bunch of techno-geeks in a dot-com startup.
But let's be clear on the outcome of that war. It means the end of the traditional dealer's lock on automobile distribution. It means massive consolidation and restructuring of the brick and mortar and opening of numerous new channels for new cars, used cars, F&I and service.
Global Investment Research
Mexico's share surely will rise
The Buick Rendezvous and the Pontiac Aztek should at least increase Mexico's share of the U.S. auto market.
Redondo Beach, Calif.
John Chevedden is a free-lance automotive writer.