
As General Motors heads into its brave new incarnation, it left behind three brands that didn't make the cut.
The three orphaned brands -- Saab, Saturn and Hummer -- all found buyers. But can they survive in a tough, competitive marketplace?
Saab was bought by a Swedish company Koenigsegg Group AB; Saturn was purchased by racing legend and mega-businessman Roger Penske; and Hummer is set to be taken over by Sichuan Tengzhong Heavy Industrial Machinery of China.
The three brands have one thing in common that could help: customer loyalty.
Saturn has a fervent customer base, thanks to a stellar dealer network, activities for owners encouraged by the home office and some top-notch models that didn't get the right support from GM.
Saab has had a diehard group of owners and fans since its inception, thanks to its uniquely Swedish heritage, its emphasis on performance and safety, and some quirky characteristics such as an ignition switch between the seats.
For Hummer owners, there is no other -- never mind the controversy and "anti-Hummer" haters. They stoutly defend their vehicle, pointing to its top-notch, off-road performance, and to Hummer's role in rescue work for a number of service organizations.
But a core of die-hard fans won't be enough unless each of the brands addresses specific issues that have tripped them up before.
Analysts agree Saab, whose July sales were down 71.7 percent from the same period last year with 570 sold, has one major problem: identity.
"Saab has a challenge: How do they distinguish themselves and create a unique buying proposition when there's 13 brands that they are competing with?" asked Detroit-based independent auto analyst Tom Libby. "They need to have something unique that's not shared by Volvo, Audi, Acura or anybody else."
The first step for Saab is ridding itself of its connections to GM, analysts say. When GM took over the brand years ago, Saab loyalists were livid. Even today they point to quality control woes, a dilution of the brand's identity and styling that was mediocre at best.
On the bright side, "we still see people shopping Saab and that's good," said Brian Gluckman, manager of media relations with Autotrader.com.
"The data seems to be showing that if they can re-establish themselves and put themselves out there, they'll do fine. I think the company is getting back to the Swedish sensibility that defines the brand," he said.
Still, it's make-or-break time for Saab, analysts say. The company has a mere sliver of the market, between 0.1 percent and 0.2 percent, said Mr. Libby. "Unless they can find unique buying proposition in the crowded luxury marketplace, they will not grow."
Saturn's purchase by Mr. Penske may be its best asset. "The Penske organization owning the distribution and name is a major, major plus. He has a golden touch with anything he's connected with," Mr. Libby said.
Saturn sold 5,960 cars in July, down 66.1 percent from last July.
The major challenge, he said, is giving a customer a compelling reason to buy a Saturn rather than another vehicle. "If the answer is superior customer experience, I'd respond by saying that it is not clear that message is strong enough to give them market share. It's not clear you can grow by more than 2 percent with that message."
Much will also depend upon what products Mr. Penske chooses to bring in from overseas to replace the current lineup when the agreement with GM to produce Saturns expires in 2011.
Mr. Libby expects Mr. Penske to be very picky and exacting about products from Europe, Asia and elsewhere. "He's a shrewd businessman. ... He has to have his standards met with his products, or he will have issues," he added.
Mr. Gluckman said Saturn has come up with hits before. "In the past, we have seen good stuff coming from Saturn. The only one that didn't do well was their compact Astra, and that I blame as much on the hatchback body style, which Americans don't like."
One of the cars mentioned most often as a possible Saturn is the Renault Megane, and if that's true, it's a good move, Mr. Gluckman said. "I've driven the new Megane, which I hear they may bring over. It's a good car, and there's good potential with that," he added.
Turning around Hummer, which sold 799 units, down 57.4 percent in July, will be a big challenge, given the current environment of fuel consumption and environmental consciousness. "How do you bring back interest in what are basically trucks?" Mr. Gluckman asked.
On the other hand, he said Hummer has a good following in Saudi Arabia and Russia, where gas isn't the concern it is elsewhere. "But I don't see Hummer ever again being the kind of vehicle it was like four or five years ago."
For his part, Mr. Libby said: "You won't likely get this from another auto analyst, but I'm still a supporter of Hummer. I think it still has a place in the marketplace. GM established a niche for Hummer, and the only other brand close to it is Jeep. It was established as a very aggressive, pure off-road sport utility vehicle, and they did an excellent job of having a unified message in their product advertising."
What might really help Hummer, Mr. Libby said, is building a version about the size of a Jeep Wrangler. "That would be helpful in light of new CAFE fuel economy standards and rising fuel costs."