Saturn Considers Smaller Car Offering

Last month, General Motors’ Saturn division posted the highest sales increase of all car manufacturers competing in the United States auto market. The division has been revitalized by General Motors as it continues to share platforms with Opel. The European attributes of Saturn's new cars has led to the revitalization of the brand.

As the demand for more fuel efficient cars increases, the brand is considering offering a smaller car in the United States auto market. Lisa Hutchinson, Saturn's product development director, recently expressed the division’s interest on developing and producing a small car in the near future. “We think there is definitely room at the bottom for an economy car for Saturn,” she said in an interview. “There is a growing interest in fuel economy as (gasoline) prices have gone up.”

Following the announcement, General Motors shares went up by 4.4 percent or $1.32 per share to $31 on the New York Stock Exchange. In the Dow Jones industrial average, the company posted the highest gain by climbing more than 157 points.

While it is clear that General Motors may be including a new small car to Saturn's lineup, Hutchinson did not mention when they would be offering the subcompact in the market. One candidate being viewed as the company’s new subcompact for the North American auto market is the Opel Corsa. The said subcompact model is considered as one of the most popular General Motors car models in Europe.

At the 2006 Paris Auto Show, General Motors’ Vice Chairman Bo Lutz announced that the Corsa will be introduced in the United States auto market as a Saturn vehicle. This announcement and the recent move by Saturn in sharing vehicles with Opel feed speculations that the Corsa will be offered in North America soon.

Other Saturn auto models which have benefited from Saturn and Opel’s working relationship are the Saturn Aura sedan and the SUV Outlook. Sales of Saturn vehicles in the United States have increased by as much as 30 percent during the first five months of the year as compared to 2006 for the same period. The step to introduce a subcompact in the North American market is an effect of the increasing demand for such vehicles. Sale of these small vehicles has increased by 43 percent as the price of gasoline continually increases.

General Motors already offers a subcompact car in the form of the Chevy Aveo. Its direct competitors include Toyota’s Yaris and Honda’s Fit. Currently, the smallest Saturn mud flap-equipped vehicle in General Motors’ growing division’s lineup is the Saturn Ion, which is a compact car. The Ion, itself, is on is way out as Saturn announced that come this fall, the Ion will be replaced by the Saturn Astra which is a rebadged Opel Astra.

“Those are a good vehicle to have in your lineup because they generate interest in the brand and showroom traffic,” says Jim Hossack, an analyst for AutoPacific Inc. “It's a reasonably good fit for Saturn, a good idea,” he added further.

The current lineup for Saturn includes the North America Car of the Year Aura, the Ion, the convertible Sky, the new Outlook, and the Relay minivan which the Outlook has replaced in the line up. The redesigned Saturn Vue is also part of General Motors’ division’s lineup.