GM asks Saturn dealers to wind up


GM had asked all their Saturn dealers to wind up the dealership network and confirmed the news that there is no deal taking place between Penske Automotive.

Penske in his statement cleared that the deal is off as Renault’s board of partner rejected the deal for supplying spare parts for the Saturn car. This could lead to a potential risk and uncertainty as to who will make sure the availability of future products, leaving no room to move ahead.

The Saturn deal was agreed upon by GM and Penske in view of automaker’s bankruptcy filing in the month of June. In July, GM came out with a court protection and stated that the agreement with Penske is aimed at preserving dealerships and avoiding job cuts.

But with the non availability of permission from Renault, the future is not secure for the availability of products, hence the deal is called off by Roger Penske and GM.

GM will continue the process of winding up through October 2010 with an approved agreement between the dealers. The company also informed that customers will be able to buy new cars and service their vehicles at the Saturn dealers until the process is completed. After the process of through, customers can service their Saturn at other dealership agencies.

Saturn the car created by Roger Smith, Chairman, GM to show the Japanese that US can beat them in small car soil. In 1990 Saturn found a strong market and positioned itself in a different small car segment. And in 1994, the sales peaked up heavily.

But with the financial turmoil, Saturn is now losing market and is on the verge of losing its identity.

Roger Penske, 72, had proposed to take up the challenge and keep the brand alive, by asking for retailing rights from GM and later on produce the same at his own setup. Things were moving on track, but with non availability of spare parts and an exclusive agreement of Renault with GM, made it difficult for Penske to keep the balls rolling and the deal comes to an end in a very surprising manner.

GM had agreed Penske to continue their support for 3 Saturn models – Aura, Vue and Outlook for another 2 more years. Then, Penske needs to put together a new portfolio for products.

GM as per their plan had started closing their units in Mexico, Michigan for Vue and Outlook respectively.

Penske is known for his revival strategy and had already rescued GM’s Detroit Diesel Corp 2 decades ago and now its Saturn.

Dealers and employees are hopeful that the deal revives for Saturn and the business takes place. In a comment made by John Pitre, Genera Manager Saturn Bakersfield, “If Penske didn’t think it would work, then it won’t work.

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