GM Saturn, sell or drop?

What’s the future of GM’s Saturn? Sell or drop?

The ailing Detroit carmaker confirmed in its most recent viability plan that it accelerate the demise of the brand to the end of this year, with either a sale or cessation of business marking the end of General Motors' involvement with Saturn. Earlier this month we heard about a new investment group by the name of Telesto Ventures reportedly planning to buy Saturn outright and source its own models from several overseas suppliers, though the accelerated time table may make that difficult to achieve.

GM manager Jill Lajdziak revealed to Automotive News that the struggling Detroit 3 carmaker is trying to find a new vehicle supplier for Saturn by September 1. The announcement was also made to Saturn dealers, who at this point are still confused and uncertain as to the direction the brand will take. Beginning next month, Saturn executives and GM higher-ups will listen to different proposals and choose the best deal for both companies. The bottom line is clear, however, with GM saying in its latest viability plan, "If a sale of Saturn does not occur, we intend to phase out the Saturn brand by the end of 2009."

Some of the proposals coming in would alter Saturn's retail operations dramatically. One of the most popular is the previously mentioned Telesto option. Under this proposal, the overseas models sourced by Telesto would not be branded as Saturns, but would rather be sold under various brand names. A Telesto spokesman explained that the Saturn brand would become "similar to a Best Buy model in that customers deal with Best Buy because of the customer experience not because they are the only place to buy a Samsung or a Sony TV".

Presumably there will also be foreign carmakers vying for the brand itself - creating brand recognition in the crowded U.S. market is difficult for foreign start-ups, and having the Saturn brand as a launching pad may seem very attractive to certain manufacturers.

A somewhat mysterious coalition of Saturn's dealer-run Franchise Operations Team and an unknown partner - possibly Telesto - has also revealed plans to take over Saturn if the brand is abandoned by GM. Only time will tell what result is final, but with 2009 nearing its midpoint it won't be long.

Audi rules out U.S. production for now, needs more local sales

Audi currently has no assembly or production facilities in North America but was reportedly considering starting a local operation to help avoid currency fluctuations from importing popular models from overseas. The company has announced today that it is postponing its decision on a North American plant for now, due mostly because of lack of volume in the market and a need to develop a suitable supplier network to source parts locally.

Audi's parent company, Volkswagen, is currently in the process of building a new plant in Chattanooga, Tennessee, and it’s possible, although unlikely for the near future, that Audi could use this plant for local production of its own models. Scheduled to open in 2011, the new plant makes sense for Volkswagen's "economies of scale" but does not oblige Audi to use its facilities in anyway, according to the current president of Audi of America, Johan de Nysschen, who spoke recently with Automotive News.

Furthermore, the VW plant will be mounting engines transversely for the VW platforms it will be working with, while Audi's engines must be mounted longitudinally - thus diminishing the efficiency of the plant overall and making the case for not producing Audi vehicles locally until more sales have been notched up.

Nysschen also stated that it’s possible the carmaker could purchase an already existing production facility, but before any steps are taken in this direction the volume of sales for Audi has to be increased. Last year Audi sold nearly 90,000 vehicles in the U.S., but the German carmaker is aiming to more than double this figure to 200,000 within the next 9 years. Should this goal be achieved then we might see Audi talking more seriously about production in North America.


source from:automk.com