ROANOKE TIMES
Copyright (c) 1996, Roanoke Times
DATE: Friday, July 26, 1996 TAG: 9607260032
SECTION: BUSINESS PAGE: B8 EDITION: METRO
DATELINE: DETROIT
SOURCE: ASSOCIATED PRESS
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 miss 10 to 15 sales per month because we are low on inventory," said Fred McElmurray, general manager of Saturn of Roanoke Valley in Salem. He said the local dealership could sell 180 more cars than the 525 to 550 it averages in a model year.
If Saturn made another model, particularly a larger car, McElmurray said that would solve both problems the local dealer faces. "We've got a selection problem and a need problem. If we could solve one of those, our [sales] numbers would shoot up," he said.
Hudler declined to discuss Saturn'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.
He said however, that he can't conceive of another manufacturing plant being built. The company is simply going to have to continue to do what it has been doing for a little while longer.
``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.
Saturn sold 285,674 cars last year, about the same as in 1994, which amounted to a 10 percent share of the combined small-car and sport-coupe segments. Kennedy said sales are up about 4 percent so far this year.
Also, Saturn said it will begin selling three right-hand-drive versions of its cars in Japan next spring. Company officials wouldn't say how many cars they expect to sell in Japan, where import vehicles make up only 10 percent of vehicle sales.
Staff writer Christopher L. Boyd and The New York Times contributed to this story.
LENGTH: Medium: 72 lines ILLUSTRATION: PHOTO: Saturn introduced its 1997 SC2 to Detroit's automotiveby CNBpress Thursday. The GM division claims it could sell 50,000 more
units a year if it had higher production. color