Hooniverse Parting Shot: The Saturn Division; GM's Hope for the Future.

What started out as a division with a cult-like following ended up another irrelevant brand within the GM hierarchy. This is the story of how GM fumbled a golden opportunity to reinvent itself over the last 20+ years.

Almost twenty years ago, a new division was launched within the behemoth General Motors empire, and its purpose was to bring back disenfranchised buyers who refused to shop at Chevy, Oldsmobile, Pontiac, and Buick dealerships. The division was named Saturn, and it was going to be run differently than any other GM division. The premise of the Saturn brand was very simple, they did not share anything with GM; the cars were exclusively Saturn, the power train was exclusively Saturn, the manufacturing plant was exclusively Saturn, and the dealerships were stand alone Saturn stores. You could not find one GM logo connected to the entire brand when it was launched, right down to the keys. But one thing that stood out in the consumers mind was how they were treated at the dealerships with its no-haggle pricing policy and low pressure sales tactics. So how did a division with so much promise become the also ran within GM in less than 20 years?

Saturn cars were quite unremarkable when they debuted in the fall of 1990. They shared absolutely nothing with any other GM car at that time, with a space frame design (pioneered in the Pontiac Fiero), dent-resistant flexible plastic body panels, and using their own design for the power train. The original “S” series was introduced as a four-door sedan or a two-door coupe, available with two distinct trim levels. The SL1 features a SOHC 1.9-liter four cylinder with 85-horsepower, comparable with other small cars at that time. The SL2 featured a DOHC 1.9-liter version of the same engine, only with a power rating of 124-horsepower. The Coupe was available only with the DOHC for the first two years then a less expensive version of the coupe was introduced. Two years later, Saturn introduced a station wagon version of the SL, rounding out the model lineup that was basically the same for the next 11 years. However unremarkable the designs were, they started attracting buyers. The automotive press wasn’t all that impressed by the product, stating that it was just an ordinary car with average handling, average fuel mileage, and with a rather noisy, unrefined engine, especially in the DOHC version. While the basic reviews of the Saturn were lukewarm at best, it was the buying experience that brought most of the success of the brand, with a whole new approach in retailing vehicles. It started with carefully choosing the right dealers. Each Saturn store was set up as a stand-alone dealership in which the overall design of the dealership had to follow key design parameters set by the division. Each of these items included square footage, interior layout, and exterior design right down to the furnishings. These retailers also had to follow the one-price mantra in which there was a low-pressure, no-haggle pricing structure. The story behind this was said to be a study of consumer preference in which many participants would rather have a root canal done than step foot in a showroom to purchase a car. The Saturn Way actually relaxed car shoppers and they bought almost 50,000 units right off the bat and within two years more than 250,000 of what was essentially a one-car brand.

So successful was the Saturn branding effort that people developed a cult-like following to the brand. In June of 1994, Saturn held the first Spring Hill homecoming, as a tribute to the first five years of manufacturing Saturns. Over 38,000 Saturn owners were in attendance with one Saturn SL2 owner proclaiming, “Just like Woodstock, without the patchouli oil.” The period in Saturn history between 1992 and 1996 brought most of their accolades. They were awarded as best small car by the PBS program Motorweek for two years running, Intellichoice heaped numerous awards including Best Value (multiple times), and lowest cost of ownership. It was also the first time in which Saturn ranked number one in new car sales per retailer, a feat that no other domestic nameplate held in over a decade. The company was also very active in community organizations and charitable work, often closely aligned with the general demographic or those who purchased Saturns. By 1995 Saturn sold over a million cars, and introduced their no-haggle approach to the used car market, cementing their relationship with car buyers who were looking for something other than a small sedan, wagon, or sports coupe.

By 1996, it looked like Saturn could do no wrong, and one of the most innovative products made its way onto Saturn showrooms on January of 1996, the first electric car available to the public in over eight decades, the EV-1. This was the first car that was designed to be all-electric by General Motors, and what better place to showcase this breakthrough car than at a breakthrough dealership chain. The EV-1 was available as a lease-only arrangement in the communities of Los Angeles, Phoenix, Tucson, San Francisco, and Sacramento, with a very limited program in Atlanta Georgia. EV-1 lessees were officially participants in a “real-world engineering evaluation” and market study into the feasibility of producing and marketing a commuter electric vehicle in select U.S. markets undertaken by GM’s Advanced Technology Vehicles group, according to that vast bastion of information, Wikipedia. The vehicles were to be serviced at select Saturn retailers, and the cars were not available for purchase after the lease expired.

All of the ever-hopeful exuberance of the EV-1 was quickly buried when GM ultimately viewed the program as unprofitable and successfully fought the CARB regulations that were instrumental in bringing the mandate for zero-emission vehicles. Environmentalists, one of Saturn’s core demographic group of buyers, found this action unconscionable. GM’s mishandling of the publicity swirling around the destruction of most of the 800 EV-1s that were produced didn’t help either, and this may be seen at the turning point of the franchise, though it’s best sales years were still ahead of it.

Read part 2 of the Saturn Saga tomorrow, and in the meantime, follow my postings over at Automotive Traveler.