Campbell Selling Saturn Franchise

Pioneering auto dealer John B.T. Campbell has agreed to sell his Orange County Saturn franchise, including three existing dealerships and two in the planning stages, to the auto maker’s new retailing arm.

He is the first California Saturn dealer to sell to the company since Saturn announced last week that it is buying back dealerships to improve its competitive position.

Campbell said he is scaling back to a single Saab franchise in Santa Ana to conserve capital and to prepare for a run for state Assembly in the 70th District.

An outspoken critic of his own industry--he once said car dealers have a bad reputation because they had subjected customers to high-pressure tactics for years--Campbell introduced one-price, no-haggle selling to the county in 1990.

Two years later, he opened one of the nation’s first car stores in a retail shopping center--a Saturn showroom at Westminster Mall.

He also advocated that auto dealers build customer loyalty to their own dealerships rather than to the brands of cars they sold.

He said Wednesday that he decided to sell his Saturn operation back to the company, a unit of General Motors Corp., because he doesn’t have the large amount of capital that will be needed to finance the business for the next few years as Saturn develops ambitious growth plans.

“I’m best at starting things up,” said Campbell. The process of nurturing an established operation, he said, holds little fascination for him after 20 years in the business.

While Saturn dealerships generally have been quite profitable, many analysts say the company has been hurt by a lack of new products to excite customer interest.

“It will be at least two more years of struggle before the new vehicles come on line,” said Jim Hossack, an industry consultant with AutoPacific Inc. in Santa Ana.

And with Saturn aiming to acquire as many as 150 of its 388 existing dealerships nationwide by early next year, it “made sense to sell” rather than retain the franchise and compete with the factory, Campbell said. In California, Saturn has 10 dealers who own a total of 42 dealerships.

A Saturn spokesman said Wednesday that the company doesn’t know yet how many of its dealers want to sell. The company already owns 29 of its franchises, none in California.

Saturn says the dealerships will be owned by the retailing unit, Saturn Retail Enterprises. Ultimately, the unit will be spun off as a publicly traded company, with Saturn retaining only a minority interest.

The car maker says it is forming the new retailing unit to remain competitive in the rapidly changing auto retailing environment, including the emergence of big, publicly traded dealership groups like Republic Industries Inc.

Saturn and other car companies also are rejiggering their retailing to help control skyrocketing distribution and selling costs. Indeed, other auto makers also have launched plans to take control of many of their dealerships.

Ford Motor Co. is testing corporate ownership of its dealerships in several markets. Chrysler Corp., Nissan Motor Corp. and several other GM divisions are exploring alternate programs that include ties with Republic, CarMax and other nationwide dealership chains.

Campbell, who announced the sale Wednesday morning to his 200 employees, said the deal should close in March.