Drowning Saturn Going Down for the Third Time

What killed Saturn?

It’s a long list, including years worth of boring products, but in the long run, the Internet and greater transparency in car pricing belong near the top.

Yesterday’s announcement that Roger Penske decided to pull the plug on acquiring the Saturn brand is only the final straw.

By the way, former parent General Motors comes pretty close to shedding crocodile tears about Penske’s decision.

GM CEO Fritz Henderson said in a statement that Penske’s decision is “disappointing news and comes after months of hard work by hundreds of dedicated employees and Saturn retailers who tried to make the new Saturn a reality.”

Well, yes. But that’s like the pirates saying they’re disappointed in the Coast Guard, because the Coast Guard failed to rescue the people the pirates marooned on a life raft with one canteen of water and a box of stale crackers.

Saturn represented an awful lot of innovations when it was first conceived in the early 1980s, including ding-proof plastic body panels, a unique UAW labor agreement, and a brand-new factory in the then-unlikely location of Spring Hill, Tenn., outside Nashville.

But a unique distribution network and no-haggle pricing were the key innovations when Saturns finally went on sale in 1990. Other General Motors dealers competed with each other as much or more than they competed with Ford or Toyota dealers. They still do, which is a key reason why GM is trying so hard today to get rid of what it considers excess dealers.

In contrast, Saturn dealers controlled a large territory, with multiple locations in the same market. That way, Saturn’s “one-price” policy could be made to stick, since no dealer was going to undercut himself.

What made the one-price policy attractive to consumers was that it calmed the universal fear in automotive retailing that that somebody, somewhere was getting a much better deal on the same product.

Back in the late 1980s and early 1990s, dealer invoice prices were still pretty opaque to consumers. In the Internet age, it’s child’s play to find out what the dealer paid for a car, and how much other people in your market are paying. That makes Saturn’s approach less uniquely valuable.

In the short run, Penske Automotive Group says it couldn’t get a commitment from any other manufacturer to supply cars beyond GM’s agreement to keep supplying cars for a limited time. No cars, no franchise.

Penske’s decision is kind of a shame, considering Saturn’s once-upon-a-time potential, but under the circumstances it looks unavoidable.

Photo: GM