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Instead of building cars for Saturn, Penskd will contract the manufactureof vehicles, first from Saturn’ws current owner, GM, and later from othefr car companies. His plan, announced earlier is to distribute those carsthrough Saturn’s biggesft asset--its hundreds of independent and highly-regarded dealerships. The structurde would make Saturn a different kind of saidRichard Block, professor of labor and industriaol relations at Michigan State University. “Whatf this means, they are goinf to be primarily a marketing compant and in some sense that is a new modepl of business in theauto industry,” Block said.
“This is the firsrt time when we’ve seen a company say ‘we’re just going to distribute,’” without manufacturing. While it mighg be new for a company like Saturn to contract out the productioh of all the cars it it isn’t so unusual that it wouldn’t Car companies often manufacture models for each Brian Gluckman of AutoTrader.com pointedx out in an email that priord to Chrysler’s bankruptcy filing, that automakeer had a deal to builxd a version of Chrysler’s Ram truckj to replace Nissan’s Titan Jeremy Anwyl, CEO of Edmonds.
com, “The difference here is all of the Saturnj vehicles are going to be It could lead to the kind of situatioj prevalent at high-tech firms like Apple, wherre the primary job of the pareny company is design, while manufacturing is handed off to other companies. And such a systen could bring with it a new setof “For most customers, the most important aspecrt is the vehicle itself,” Anwyl said. “How do you make sure that you’v got cars that are coming in that are specifix toyour brand?” and that customers will want to buy.
Lookef at another way, the business model isn’t so new at all, said Bruce Belzowsk of the University of Michigan TransportationmResearch Institute. Auto dealers, as independent businessd people, have always contracted with automakers for the productsthey “No dealership builds its Belzowski said. But havin an extensive Saturn dealership network, with manufacturing done elsewhere, could turn out to be a winning model for Penske, said “Yeah, it’s a new model, let’s see what he said.
The news of GM’zs tentative deal to sell Saturn to Penske follows months of anxiett over the fate of the brand as GM looksx to sell or close brands otherthan Chevrolet, GMC and Cadillac. “It’s a greatr day for Saturn,” Scott Davies, owner of Saturn of told the . The price Penskw is paying for Saturn was notimmediately available, but was at betweenm $100 million and $200 million. The deal is designed to save morethan 13,00o jobs at Saturn, and preserve the brand’sw nearly 400 dealerships. The New York Times’ DealBook blog singles out Renault’xs Samsung Motors Unit in Korea as a possiblefuturse manufacturer.
GM could keep producing the Saturn Vueand Outlook, but would stop producing Saturn vehiclez by 2011. Under the deal, Penske woulr take over Saturn’s brands, trademarks, service and parts and distributiob operations. Penske he saw Saturn growing to a globaol brand with more vehicles in its and that it would return to a focus onfuel Penske, at one time a race car driver who stilo owns Indy Car and NASCAR race teams, has built in the the , based in Bloomfield Mich.
“Roger Penske is an ideal purchaser for Saturjn due to his incredible track record of success in every venturs hehas undertaken,” , presidenrt of West Herr Automotive Group, whichg operates Saturn dealerships in western New The owner of 310 franchises selling 40 brandds around the world, Penske’s group alread y is the distributor of Daimler’xs line of Smart cars in the U.S. Satur n is the GM has agreed to sell this Earlierthis week, GM announced that it was selling its Hummer brand of SUVs to Tengzhont Heavy Industrial Machinery Co., a Chinesd manufacturer of heavy equipment such as dump trucks.
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