Penske Acquires Saturn

This is a huge boost for the 350+ Saturn dealers. As I suggested in December, this was a probable opportunity.

Roger Penske operates the second largest auto dealership group in the country (Penske Automotive Group) as measured by revenue. In addition to the auto group, Penske is also the U.S. distributor of the Smart ForTwo by Mercedes, owner of a
reknown racing team (they've just won their 15th Indy 500 last month), and operates one of the largest truck leasing fleets in the world (over 200,000 trucks). Pretty much the midas touch.

Penske's plan is to import cars based on Renault-designs manufactured by Samsung in Korea starting some time in the 2012 time frame. Until then they hope to continue selling the current most of the current models.

While it's a move GM has to make to focus on its core, it's another case of selling tomorrow for today. Clearly Penske is likely to succeed with the project. Not only that, he's starting with one of the better dealer networks within GM. Saturn has long been known for great service, no pressure sales and no-haggle pricing.

What GM is doing is creating a tough new competitor for itself in a few years (perhaps along with Hummer).

I haven't seen any further mention of the Sky roadster and the Delware plant where it's built along with the Pontiac Solstice. But don't be surprised if Penske picked these to flesh out the future product line as well.

Penske = Smart

Almost everything Roger Penske touches turns to gold, as reported by Automotive News. As the sole U.S. distributor of Smart cars, his company has far exceeded the target of 15,000 units in 2008 (24,622 actually) in large part due to a unique reservation system and 50 city road show. Buyers put down a refundable $99 deposit to get a place in line.

What Penske has done is turn the traditional “push” retail model into a “pull” model. By having the line form before the cars arrive the company knows what the demand is for each specification. And for those customers who cancel, the cars they ordered can be redirected to other buyers who want the same specs.

Further synergy comes through using his truck leasing firm’s call center to handle service and information calls. By opening repair orders during the call, Penske can schedule and direct customers to dealers faster and anticipate labor and parts needs more accurately.

Finally, by doing the promotional road show without traditional print and media advertising the company saved money while getting the word out. Granted this wouldn’t work with most new car launches, but it would probably work well for many unique cars. It’s more incentive for manufacturers to start building unique products that can generate buzz.