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GM's strategy is to attract younger buyers to brand
By Greg Bensinger Bloomberg News
Published on Friday, Nov 23, 2007
General Motors Corp.'s Saturn dealerships will get their most-extensive refurbishing ever, including $45,000 roadside signs, as the automaker touts an expanded model lineup.
Saturn's dealer council has approved plans for an interior and exterior face lift mandated by GM over the next three to five years at each of 430 U.S. dealerships, said Chris Bower, chief of the renovation effort. The move is part of a strategy to draw younger buyers to the 18-year-old brand.
''It's definitely time for a freshening,'' said Leo Stec, general manager of Saturn of Chicago.
The store revamping is the final piece in a three-year over
haul of Saturn. GM has expanded into new vehicle segments with European-inspired styling and switched advertising firms in an effort to erase a reputation as a brand for bargain buyers.
''GM really has to shake that image of Saturn as a maker of inexpensive, small vehicles,'' said Wes Brown, an analyst for automotive marketing firm Iceology in Los Angeles. ''It's going to take time for what the old Saturn represented to catch up with where it is today.''
A Saturn sales boost would help GM Chief Executive Officer Rick Wagoner restore profits in North America, the largest source of revenue for the automaker. GM, based in Detroit, is in the midst of its eighth consecutive annual U.S. sales decline.
For its third quarter of 2007, GM reported a record $39 billion loss, mostly related to a tax accounting change, and said the short-term outlook is for slower U.S. sales.
Three years ago, Vice Chairman Bob Lutz said GM would spend $3 billion to revitalize Saturn and raise its U.S. sales to 400,000 units by 2007. As recently as 2003, the goal was 500,000.
The spending resulted in the new Aura and Astra cars, the Sky sports car and the Outlook and Vue sport-utility models as well as some gasoline-electric hybrid versions.
Sales have fallen short of plans. Saturn's sales through October would project to an annual total of 248,000 units, short of the 1994 peak of 286,003. It is GM's fourth-largest brand, outselling Cadillac in the U.S. with about the same volume as Daimler AG's Mercedes-Benz.
''We hope that the new design will change the opinion of buyers. It was time to get back that hip and cool image we once really owned,'' Saturn's Bower said in Danbury, Conn., where workers were putting finishing touches on the first fully redesigned dealership.
''We think that new buyers will respond and, ultimately, buy more Saturns,'' Bower said.
Altering perceptions about Saturn won't be easy, said Jesse Toprak, an analyst with market research firm Edmunds.com in Santa Monica, Calif.
''Saturn has a very loyal following from its early days, but they've had trouble drawing in new buyers from outside of that group,'' Toprak said.
''They've got to get marketing that reflects that they are a new Saturn and that it's a good-value brand. It will definitely take some time to change those perceptions.''
General Motors Corp.'s Saturn dealerships will get their most-extensive refurbishing ever, including $45,000 roadside signs, as the automaker touts an expanded model lineup.
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