What happened to Saturn cars? General Motors’ Saturn Corporation went out of business in 2010 — but not before blazing a trail for auto dealerships.
It would be a mistake to think of Saturn’s failure as a failure of its transparent, customer-friendly business model. In all likelihood, it was due to a lack of investment, lack of product development, and other internal issues facing General Motors (GM) at that time. In fact, Wharton professors have referenced the Saturn Corporation’s strategy as a roadmap for “what to do and what not to do.”
So, what can dealerships today learn from Saturn and its circa-1990s experiment with a then-ground-breaking retail automotive model? Read on to find out.
“A Different Kind of Company. A Different Kind of Car.”
From its inception in 1990, Saturn Corporation was determined to bring a new approach to the American car industry. The company launched during a time of massive competition from Japanese manufacturers (especially those producing small, compact cars), and its founders wanted to reinvigorate the U.S. market as well as the nation’s automotive workforce.
Although Saturn was an off-shoot from General Motors, the company’s intention was to create a new way of working that deviated from the more traditional car sales model.
Saturn’s tagline was “A different kind of company. A different kind of car,” — but what exactly made it so different?
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Saturn’s Customer Experience
Saturn was highly focused on delivering an incredible customer experience. Many companies make this claim, but for Saturn, it wasn’t just lip service. Interpersonal aspects of customer service were at the heart of the company’s ethos from the get-go. It was an intentional strategy designed to serve and celebrate Saturn owners.
To many, Saturn vehicles were ordinary — and in most cases, not particularly innovative. However, the brand was one of the only in the industry to put its customers at the center, a commitment that made for impressive results. How else do you get 44,000 people to drive their personal Saturns to Spring Hill, Tennessee, for a homecoming to celebrate their vehicles and ownership?
Seemingly small actions — such as locating dealership service bays at the front of buildings rather than the back — showcased a level of transparency other brands were missing. Saturn wanted to keep customer issues ‘up front’ rather than hiding them away. Moreover, the company voluntarily made a number of announcements and recalls to help customers avoid potential issues — once again highlighting its commitment to the customer experience.
All of this helped Saturn build trust with customers — one of the core tenets of successful selling. Perhaps this is why Saturn chose to train its dealers in low-pressure sales techniques. In a 1998 Sales Satisfaction Index study, consumers cited broken promises and an intimidating environment among the top reasons for dissatisfaction at car dealerships. Saturn’s low-pressure environment made buyers feel more comfortable and in control of their purchase.
The same study also revealed that customers felt “promises are broken most often when a greater number of personnel are involved in the purchase.” This sentiment reinforced Saturn’s commitment to a single point of contact (SPOC) sales model.
Related Read: Single Point of Contact: 5 Benefits of SPOC for Dealerships
Saturn’s Business Model
Saturn’s business model was built with several unique features that set it apart from other companies at the time.
1. No-haggle pricing
Saturn recognized that preconceptions of ‘pushy’ sales tactics and price haggling in car dealerships were a barrier for customers. To eliminate this pain point, Saturn created a transparent, non-negotiable pricing model.
The revolutionary one-price model was a world away from the traditional dealership experience. Word traveled fast and an increase in sales quickly followed.
Another way Saturn was committed to its customers in a way not everyone else was? The company gave new car buyers the flexibility to return their vehicle within 30 days or 1,500 miles.
2. A simple vehicle model line
Saturn’s commitment to “quality over quantity” meant they launched only a small lineup of vehicle models. Some would argue that time and opportunities were lost in the six years it took to bring the first Saturn car to market (the S-Series in 1990). However, the numbers tell a different story. In the three years following the first Saturn model off the production line, sales surpassed 300,000. Saturn’s adoption of a culture centered around quality and customer satisfaction had clearly resonated with car shoppers.
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3. A common culture
Along with an uncompromising focus on quality, the cornerstone of Saturn's culture was a sense of shared involvement. The brand’s mission statement read:
“We will create a sense of belonging in an environment of mutual trust, respect, and dignity.”
To live out this mission, Saturn began to distance itself from its parent company, GM. Taking these deliberate steps allowed Saturn to pursue a distinct, non-hierarchical company structure that gave employees a greater say in how the business operated.
With clear insight into the inner workings of the business, team members had a better understanding of the company, were given more opportunities to share their thoughts, and had more power to influence decisions. They even had a say in how the workplace was designed.
4. Intensive staff training
As well as involving workers in the decision-making process, Saturn ensured employees went through intensive training. Before starting, staff received up to 750 hours of training before spending at least 5% of the working year in continued education and training. This not only covered the machinery and product side of the business, but also coached staff on conflict management, decision making, and team dynamics.
Saturn dealers also received training on low-pressure sales techniques. While most dealerships in the U.S. were earning commission on sales, Saturn backed salaried work. The result? A nearly unheard of absentee rate of just 2.5% in 1992. Compared to General Motors’ average absentee rate of 14%, it was clear that the brand’s new selling structure was paying off.
5. Technological initiatives
It’s also worth noting that, while Saturn’s vehicle models may not have been the most sophisticated or advanced, the manufacturer did embrace a few innovative technological approaches. For instance, Saturn invested in flexible assembly technology. This meant they could be more efficient and increase ROI by building different versions of their vehicles (for example automatic and manual transmissions) on the same production line.
6. A common vision
Underpinning Saturn’s strategy was a desire to disrupt the automotive industry and create an environment where people came first. The company was established to explore different ways of working, to step outside of what was considered ‘the norm,’ and try new car selling methods.
Some new approaches worked successfully, and some didn’t. The common thread was that everyone working at Saturn Corporation had the same vision in mind when it came to the working environment, the actual vehicles, and the sales process.
Related Read: Dealership Pricing Strategy: Understanding the One-Price Model
The Bottom Line: Saturn’s “Different” Strategy Still Works Today
So why did Saturn go out of business? There are several theories around General Motors’ discontinuation of Saturn Corporation in 2010. Some believe that the products weren’t innovative enough, while others say that the whole endeavor was too ambitious. There’s also the view that GM’s other divisions were unhappy with how Saturn made them look, and that internal business issues were the root cause of GM’s decision to shut down Saturn.
It stands to reason that a combination of these factors caused Saturn’s demise. If GM had stuck with it, could Saturn have grown stronger and regained its early success? We’ll never know.
>> Download the Guide - Driving Dealership Customer Satisfaction and Profits with the Modern Retail Approach
How can dealerships apply Saturn’s principles?
Even though Saturn may not have lasted as a business, its core principles are still proving successful (and were not the ultimate reason for the company’s downfall). Customers still want:
- To be treated well
- To feel comfortable going into a dealership
- To have transparent pricing
- A hassle-free transaction process
- An exceptional buying experience
Ultimately, a customer’s thoughts, feelings, and emotions are critical to any brand, no matter the product or service. Modern vehicle advancements can bring an element of excitement and innovation, of course. But when you strip away the excitement of technology or new features, what’s left at the core of auto retailing is how we make customers feel.
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These are the lessons dealerships can take from Saturn’s story. From vehicle design and transaction technology to store set-up and process, the customer journey should always be front-of-mind.
And for those who aren’t sold on the idea of emulating Saturn, think back 50 years — has any other automaker resonated so strongly with its customers? The moral of the Saturn story is that if you want to change, you actually have to change.
Has Saturn’s story inspired you? Get in touch today to discover how Fuse’s automotive retail software and dealer consulting services can help you apply these lessons to your dealership.
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