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Saturn considers its next steps

Published Sep. 16, 2005

Saturn could sell about 50,000 more cars a year if it could produce them, the president of General Motors Corp.'s small-car unit said Thursday.

While Don Hudler said Saturn continues to make improvements to increase production at its Spring Hill, Tenn., plant, he gave no indication when or if GM would foot the bill to expand the plant or build another. An additional 50,000 cars sold would generate more than $600-million in annual revenue.

Saturn was started as a semiautonomous company in 1990 to build reliable small cars that would lure import buyers back to GM. The cars have sold well, in no small part because of Saturn's soft-sell approach and no-haggle prices.

Hudler also said Saturn is studying a possible expansion of its three-model lineup. "The brand is strong enough to carry additional product," he said. "We're looking at a lot of things."

He declined to elaborate or to discuss the company's not-so-secret plans to build a midsize Saturn in Wilmington, Del., based on the Opel Vectra that GM sells in Europe. GM's board reportedly will decide next month whether to approve the project.

"As soon as we're able to talk about it we will, but right now it's premature," Hudler said.

Analyst George Peterson of AutoPacific Inc. in Thousand Oaks, Calif., said a midsize Saturn is all but a sure thing. Saturn dealers have been asking for a larger car for years.

"That's something that Saturn urgently needs _ that step-up car," Peterson said.

But even if demand for the small Saturns remains strong, any extra production capacity will have to come out of efficiency improvements at Spring Hill, he said.

"Any further investment in brick and mortar at Spring Hill, at least in the short term, would be unlikely, especially with the further investment being made with the Opel," Peterson said.

Hudler's comments came as Saturn showed off its redesigned coupe, the 1997 SC1 and SC2, to Detroit's automotive press. The coupe, just arriving in showrooms, is a slightly longer, more rounded version of its predecessor. List prices start at $12,495 for the SC1, up $300 from the 1996 version.

The new coupe completes the first makeover of the Saturn lineup since the nameplate was introduced in 1990. The sedan and wagon were redesigned for 1996.

The coupe is expected to account for 20 percent of Saturn's 1997 production, up from 18 percent in the '96 model year, said Joe Kennedy, vice president of sales and marketing. Saturn's coupe sales steadily increased in the past six years, while the overall coupe market declined.

Hudler said the changeover from the 1996 to 1997 models was done virtually without production interruption, despite the major redesign of the coupe. Automakers have been trying to cut the time it takes to switch assembly lines to new models, a process that traditionally has taken weeks or months.

Saturn rolls out its 1997 models

These are some facts about the 1997 Saturn SC1 and SC2:

BODY TYPE: Two-door, four-seat sport coupe.

COMPETITION: Toyota Paseo, Ford Probe-Mazda MX6, Nissan 200SX, Honda Civic, Eagle Talon-Mitsubishi Eclipse.

ENGINES: Four cylinders, single overhead cam on SC1; Four cylinder, double overhead cam on SC2.

FUEL ECONOMY: 28 mpg city, 40 mpg highway with SC1; 27 mph city, 37 mph highway with SC2 (manual transmission).

SAFETY FEATURES: Driver, front passenger airbags; side door beams; optional antilock brakes and traction control.

LIST PRICES: $12,495 for SC1; $13,695 for SC2.

WARRANTY: Three years or 36,000 miles, 24-hour roadside help.

PLANT: Spring Hill, Tenn.





AVG. INCOME: $59,500.

Source: Associated Press