Analysts Say Competition May Force General Motors to Put New Spin on Saturn : Autos: Some suggest GM roll its experimental line into one of its more established divisions.

Since its inception, General Motors Corp.’s Saturn division has been allowed to operate as a laboratory for new ideas and concepts, with little accountability to the rest of GM.

But with competition heating up and GM’s unlimited financial support no longer guaranteed, some industry experts have started to wonder if Saturn would be better off joining one of GM’s seven more established divisions.

“The only way to save Saturn is to kill it unless they can figure out a way to roll it into another division,” said Lehman Bros. auto analyst Joseph Phillippi.

Such a move would make it easier for Saturn to get approval for new products and another assembly plant. But GM officials fear a merger would undermine Saturn’s credibility with its customers and spark a bitter culture clash.

“It’s kind of like saying, ‘I’ve got a bucket of water and a bucket of oil, let’s just dump them together and let it merge,’ ” said Oldsmobile General Manager John Rock. “When they advertise themselves as a different kind of a car company, it really is true.”

Saturn Vice President Donald Hudler said a major factor behind Saturn’s success has been its ability to attract import buyers, women and people who otherwise would never have stepped into a GM dealership.

But after years of double-digit sales gains, Saturn has started to feel the heat of the competition.

Last month Saturn had more than 90 days worth of cars on hand, far above the industry average of 65 days.

Hudler blamed part of the overhang on bad weather in many parts of the country, but industry analysts say Saturn’s 4-year-old design is starting to show its age, particularly when compared with Chrysler Corp’s Neon.

Hudler denied Saturn’s styling has fallen out of favor and he predicted sales will pick up when the company adds another 60 outlets to its distribution system.

“The people that buy our product think it’s very fresh and contemporary,” Hudler said. “There’s nothing dated, in our opinion, about our cars.”

Nevertheless, Saturn is no longer on the cutting edge of technology.

The 1995 Dodge Neon and Chevrolet Cavalier both have one more airbag than does the Saturn and they have a more powerful engine, giving them an important edge.

Hudler said Saturn does not compete directly with the Neon or the Cavalier, but industry executives say Saturn really needs a new car to stay ahead.

“I really think it would be criminal for GM not to let them succeed,” said Ford’s Roberts. “I really hope that GM gives them some new product.”

For the time being, Hudler said Saturn has no plans to offer a larger car, and it will have to make do with what it has. This fall Saturn will add a second airbag to its cars and a year later it will roll out a new exterior.