Mike Baum on the Saturn Legacy

The post SATURN: Sad End to a Great Dream prompted some great comments and insights.

Commenting on the Saturn legacy, consultant Mike Baum of Sophia Consulting LLC wrote:

The revolutionary aspect of Saturn was never really the car – it was the retail experience. It was the first time in automotive history that an American dealership was designed to approach, even in a small way, the customer-oriented retail experience that we expect from practically every other type of retailing.

The traditionsaturn_logoal auto dealership represents an early 20th-century “push” model that served the interests of the manufacturer, not the customer. Automakers had to move product to justify high-volume production. So after a brief flirtation with wholesalers (yes, there were auto wholesalers at one time) every automaker created as many dealers as they could and did everything they could to push product through to them – quotas, financing, volume rebates, encouraging the “let’s make a deal” approach, restricting competing brands, and on and on. Consumers generally didn’t like this model very much but when there were few choices they put up with it. The automakers had little incentive to improve it because they didn’t get paid based on consumer satisfaction – just on how much product moved.

Saturn moved a few inches away from those problems – at first. But the dealers were still tied to Saturn-brand cars, and when those stopped being even marginally attractive, the brand died.

It’s no coincidence that a big chunk of market share has now been taken by multi-brand dealers like AutoNation that have at least some incentive to treat the consumer right and sell them whatever car they really want to buy. The Penske acquisition was a potential bright spot because he wouldn’t, at least theoretically, be tied to just one supplier – he could listen to customers and provide the product and the experience they wanted. But it’s not to be.

Manufacturers do best when they listen to the voice of the consumer as mediated through their retailers (and now, increasingly, direct on the web). But pushing from the center out, or the top down, never worked very well, and it will never work even that well again. Franchising works because the owners are right there listening to the consumer, and will sell what the consumer wants to buy. And if the franchisors, and the manufacturers, are smart, they listen, too.

Mike Baum
Sophia Consulting LLC
mhbaum@gmail.com

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