TOKYO - One of Saturn's six original retailers in Japan has decided to drop its franchise and exit the auto industry, leaving the U.S. company scrambling to find a replacement dealer in the vitally important Tokyo market.
'Unfortunately, we don't have a new dealer. But we will sign a new retailer as soon as possible to minimize the inconvenience of Saturn owners,' said Saturn Japan spokesman Yasuo Maruta.
The franchisee, JR East Car Sales Corp., operated two Saturn stores in Tokyo: one in the upscale Setagaya Ward and the other alongside Shinjuku Station, Ja-pan's busiest train station. Together, they accounted for about 13 percent of Saturn's cumulative sales in Japan since 1997 of 3,488.
JR East Car Sales was launched by the East Japan Railway Co. in 1991, and has two Volvo stores in addition to its Saturn outlets. Losses mounted, however, prompting the company to quit the auto business, effective next month.
JR East Saturn began sales in April 1997. It is expected to post a pretax loss of ¥130 million, or about $1.2 million at current exchange rates, in the year ending March 31, compared with a pretax loss of $1.4 million the previous year, according to a company executive.
Revenue is expected to total some $4.6 million on sales of about 190 new Saturns.
Separately, JR East Japan Auto Sales, the Volvo dealer, is expected to post a pretax loss of about $1.2 million this fiscal year, roughly the same as the year earlier. Its new-car sales have dwindled to about 210 this fiscal year, from a peak of 400 in the year to March 31, 1995.
The two Volvo stores are not nearly as critical to Volvo Cars Japan as the two Saturn stores are to Saturn Japan. The Volvo outlets accounted for only 1.6 percent of Volvo Japan's 1999 sales, Volvo spokesman A. Umeda said.
The change leaves Saturn with 21 retailers in Japan amid signs that the brand may have reached a plateau far below its plan. Sales in 1999 slipped 2.2 percent from 1998, to 1,345.
But Maruta said that strong sales of the new Opel Vectra-based Saturn sedan and wagon in February indicate that March sales could top 200, almost doubling the previous single-month record set in March 1998.
Still, he said, 'We think we need to do something more in terms of the product portfolio, promotions, stores and leveraging the Internet.'
He vowed that the loss of the showcase Tokyo outlets would not cripple Saturn Japan. 'We'll stay,' he said. 'We'll come back with a new retailer.'