Saturn will double its sales once its new midsize sedan reaches showrooms in the fall of 1999, says Chairman Donald Hudler.
Hudler also said that the 8.3 percent decline in Saturn’s sales this year are a direct result of fierce competition. “The market in the U.S. has been very difficult,” said Hudler, who noted sales of small cars generally have suffered.
Saturn, however, remains a leader or strong in the segments in which it competes, Hudler told Detroit’s Automotive Press Association. “We’re doing well, but we would like to do better,” said Hudler, who noted Saturn continues to earn plaudits for customer satisfaction.
Despite the slump, which analysts have attributed in part to the decline in the value of the yen that has made Japanese competitors such as the Toyota Corolla and Honda Civic more affordable, Saturn plans to keep its “no incentive” policy, Hudler said.
Discounting would undermine Saturn’s resale values, which are now the highest for small cars in the industry.
The high resale value has allowed Saturn to offer very affordable leases, including a three-year deal at $125 per month with $2,000 down, Hudler said. In addition, prices on the Saturn coupe and station wagon will increase by less than 1 percent for the 1998 model year, and the sedan will remain at 1997 levels, starting at $10,595.
Saturn also is moving ahead with plans to reduce costs and improve and expand its retail network, still considered the best in the industry, Hudler said. It has 375 sales outlets and plans to have 500 by the time the midsize Saturn is ready.
The large sedan “will virtually double the size of the company” said Hudler, who added that the introduction of the new Saturn is well-timed in terms of customer-base development.
Surveys show 60 percent of Saturn owners trade their cars in for another Saturn, Hudler said. “We have extremely high owner loyalty, but our buyers are just beginning to return for new cars.”
The new sedan will be built at the General Motors Corp. assembly plant in Wilmington, Del., and is based on a basic design from GM’s Adam Opel unit in Germany.
Though its dealers remain tops in the industry in sales satisfaction, Hudler said Saturn is learning new lessons in handling customers and relationship marketing through its efforts to sell the General Motors EV-1 electric vehicle. GM has sold only 225 electric cars in Southern California and Arizona, and has no plans to expand the EV marketing effort to other metropolitan areas.
“We got out front of the industry, which we believe is to GM’s credit,” he added.
Hudler also said Saturn is pleased by its reception in Japan, where last April it began selling right-hand drive Saturns. Saturn has sold 340 vehicles in Japan.
“We believe we’re off to a good start in Japan. We plan to be there for a long, long time. We didn’t go over there with the idea we could sell out in the first year,” Hudler said.
