GM Frustrates Saturn Retailers, Puts them in a Competitive Bind

Saturn of Denville, New Jersey

Two days after the Wall Street Journal reported that General Motors has been formally discouraging Saturn retailers from touting Roger Penske's planned purchase of the brand, comes word that GM has also pulled funding for a number of popular incentive programs that were previously offered by Saturn stores.

Those programs, including the military, college graduate, and credit union supplier discount offers, will continue to be leveraged as a means to sweeten prospective deals at "New GM" branded dealerships (Chevrolet, Buick, GMC, and Cadillac). To make matters more difficult for struggling Saturn retailers and sales consultants, the brand was also excluded from GM's heavily promoted Fourth of July "72 Hour" sale that runs through Monday, July 6th.

Saturn Marketing Director Kim McGill told the WSJ that retailers will have to wait until the second week of July before GM begins promoting discounts aimed at clearing out '09 models.

Hoping to reverse the perception that Saturn is a dying brand, the WSJ says that some Saturn retailers have taken matters into their owns hands by coordinating a locally-focused marketing campaign with the tag line: "Wonder where the car business is headed. It's here." GM was apparently not happy with retailers attempting to so quickly distance themselves from the bankrupt auto giant, especially before the Penske deal is formally closed. Within days after the ads were launched, the WSJ says retailers were sent "a letter from GM executives asking them to not overplay the Penske deal." GM said that it feared the Penske name would overshadow Saturn by "taking the spotlight off the brand itself."

Unfortunately, retailers found the opposite to be true. "People want to buy from someone they like," Scott Davies, owner of Saturn of Wichita told the newspaper in an interview. "A lot of customers won't buy a car from GM, but they will buy a car from Roger Penske." Mr. Davies put up billboards that read: "Finally, a car guys owns a car company." The ads worked. After the billboards went up, Davies noticed a boost in showroom traffic. But GM still is discouraging the ads.

According to retailers and sales consultants who contacted, this is all very frustrating. GM is discontinuing vital incentives that will make it difficult for Saturn stores to compete with even GM's newly crowned "core" brands, while at the same time requesting that Saturn stores not tout their Penske connection. "That is creating a dilemma for some dealers who are eager to throw off the tarnished yoke of GM," said MediaPost in an article published Monday.

Source: Wall Street Journal, MediaPost

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