Saturn Makes Sizable Changes in New Model
With its arrival nearly a decade ago as General Motors Corp.’s small-car import fighter, Saturn Corp. successfully marketed itself as “a different kind of company, a different kind of car.”
While its sedans, coupes and wagons are hardly exceptional, they are competent enough and made Saturn a serious small-car competitor known for its consumer-friendly buying process and homespun image.
But with gas cheap and ever bigger vehicles crowding the road, the Saturn difference appears no longer in vogue. Fewer customers are drawn to its aging models, and critics say its folksy persona is wearing a bit thin.
Now Saturn hopes to reinvigorate its sales and image with the long-awaited introduction of its first big car: the 2000 L-series mid-size sedan and station wagon. The LS (for Larger Saturn) is aimed at potential Toyota Camry and Honda Accord buyers--consumers who are older and better-heeled than Saturn owners.
It could be a tough sell. The mid-size market, which accounts for one-quarter of all vehicle sales, is dominated by such venerable names as the Camry, Accord and Ford Taurus. The action--not to mention big profits--is no longer in cars but in light trucks. Saturn will have a small sport-utility vehicle, but not for another two years.
And while Saturn’s no-haggle sales process might still stand out, its products, including the new LS, are widely considered middle-of-the-road.
“It will be tough to differentiate” the LS, said Jack Trout, president of Trout & Partners, a marketing-strategy firm in Greenwich, Conn.
The LS marketing campaign, created by Saturn’s longtime ad agency San Francisco-based Publicis Hal Riney & Partners, got underway Monday night with the showing of 30-second “teaser” ads on the Fox Network’s popular “Ally McBeal” television program.
The teaser spots, which will run on several prime-time and cable programs through July, will be supplemented with magazine, newspaper and billboard ads touting the LS as “the next big thing from Saturn.”
The vehicle gets its first nationwide showing in August with a 90-second TV ad that uses the voice of actor Danny Glover. It will be supplemented by various regional TV and print ads that focus on specific product attributes, such as the large cargo space and the optional V-6 engine.
Saturn, which spent $210 million on advertising in 1998, says it will spend tens of millions of dollars to introduce the LS. The campaign will be followed this fall by another to launch the redesigned 2000 S-series small sedan, coupe and wagon.
The introduction represents the company’s coming of age and first expansion beyond its roots in Spring Hill, Tenn. The LS will be built at a traditional GM plant in Wilmington, Del.
Saturn sales have been slipping since 1994, when it sold 286,003 small cars. Last year, it sold 231,786 vehicles. The company has the capacity to build more than 200,000 LS. It hopes the new vehicle will help increase its sales to 500,000 within a few years.
“Saturn is growing up,” declared Cynthia Trudell, president of Saturn.
The LS is targeted at married, college-educated customers ages 35 to 49 with one or two children. About 55% of the buyers are expected to be males with household income greater than $55,000. Current Saturn buyers have an average age of 42 and income of about $45,000, slightly older and with higher incomes than the typical small-car buyer. About 40% of current Saturn buyers are male.
The LS will be priced between $15,540 and $21,800, depending on trim model and options. That is slightly less than comparably equipped Camrys and Accords before rebates. The LS price is not negotiable.
About two-thirds of LS buyers are expected to be owners of import brands or other domestic models, largely drawn by the company’s reputation for quality and reliability. Saturn also expects a significant number of current S-series owners to move up into the LS.
Saturn officials discount the possibility that the LS will take away business from Chevrolet, Oldsmobile and Pontiac. But analysts say some cannibalization is likely.
Although the larger vehicle clearly will boost Saturn sales, analysts question whether it can make significant inroads against the import competition and double the company’s sales. After all, Saturn is recognized more for its customer service than its cutting-edge products.
“The product is fine,” said Chris Cedergren, analyst for auto consultant Nextrend in Thousand Oaks. “It’s good but not on the level of Accord and Camry. It will be difficult to get those buyers.”
Maryann Keller, analyst for ING Barings Furman Selz, said the LS highlights the “significant strategic product mistakes” that GM made with Saturn. In the early 1990s, it failed to invest in Saturn, leading to its steady loss of market share.
Now, with the LS, GM is belatedly bringing Saturn into the highly competitive mid-size segment where profits are hard to come by. Saturn would be better off introducing a sport-utility vehicle now, Keller said.
Saturn counters that the LS will stand on its own. Based loosely on the Opel Vectra, a GM sedan sold in Germany, the vehicle will offer European handling and feel while maintaining its Saturn character, officials said. Saturn also is hopeful the station wagon will compete successfully against similar European offerings.
Certainly Saturn has proved itself adept at promoting its product. Its owners are a loyal bunch--40% buy another Saturn--and more than 44,000 attended a homecoming in Spring Hill in 1994 to celebrate the company’s fifth anniversary.
Saturn is sticking with its core “different kind of company “ marketing approach and its basic message that Saturn buyers aren’t just getting a car but joining a family. Its ads will be understated and emphasize Saturn’s brand personality as friendly, intelligent, human and dependable.
The teaser ads emphasize larger size without showing a vehicle. One TV spot shows a woman walking a large dog with the letters S-M-LS-XL superimposed on the screen. The other sizes disappear, leaving LS and the anchor line, which says: “Coming soon. The next big thing from Saturn.”
The TV ad that unveils the vehicle retells the Saturn story. “Once upon a time, some people set out to build a rather unusual car company,” it begins. Using a road metaphor, the emotion-laden ad depicts misty scenes of farm fields and smiling faces of Saturn factory workers.
Saturn also will showcase the LS by placing full-size vehicles on billboards on Sunset Boulevard in Los Angeles, near the Golden Gate Bridge in San Francisco and in Times Square in New York.
On July 8, at its 404 dealerships nationwide, the company will hold owner preview events to unveil the LS to current Saturn owners. The attendees will see the vehicle and be invited to sign up for test drives. Each customer will be given a pine sapling, a gift meant to celebrate Saturn’s growth.
* FIRST DRIVE: The Eclipse 2+2 is a daring redo of the sports coupe. G11
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Stalled by Small
Saturn is moving into the mid-size car market with its L-series sedan and station wagon as the market for small cars shrinks. Small-car sales as a percentage of total auto sales in the U.S.
1990: 20.1%
1999*: 12.9%
*January-May
Source: AutoData
