Washington General Motors reached a tentative deal Friday to sell its Saturn brand to auto racing magnate Roger Penske, a longtime business partner of the Detroit automaker.
GM did not disclose how much Penske Automotive Group, which operates more than 300 franchised dealerships, paid for the brand and assets, such as Saturn’s parts inventory and retail network.
“Saturn has a passionate customer base and outstanding dealer network,” Penske, chairman of the company, said in a statement. “For nearly 20 years Saturn has focused on treating the customer right. We share that philosophy, and we want to build on those strengths.”
GM, which is operating under bankruptcy protection, is restructuring by selling off Saturn, Hummer and Saab. GM found a Chinese buyer for Hummer this week, though the sale has hit Chinese regulatory hurdles, according to China’s state media.
GM said the Saturn deal will save more than 13,000 jobs, preserve the “renowned brand” and keep Saturn’s 350 dealers in business. On an interim basis, GM will continue manufacturing the Saturn Aura, Vue and Outlook vehicles.
In about two years, Penske plans to seek out another manufacturer to build cars for Saturn, said Anthony Pordon, a Penske senior vice president. Pordon didn’t rule out partnering with an overseas automaker.
“We are going to talk to everyone we can,” he said.
Analysts say importing vehicles from low-wage countries such as India and China might be the best strategy to maintain Saturn’s historically affordable lineup. But buying cars from multiple manufacturers and re-branding them as Saturns could be problematic.
Since the 1980s, Penske and GM have designed race cars, rented trucks, sold cars and manufactured diesel engines. Together, they’ve won dozens of IndyCar and NASCAR races.
“He’s got great relationships with GM,” Anwyl said.
And he has an impeccable track record in the auto world, which helped separate Penske from the 16 other bidders, analysts said.
In 1988, Penske and GM formed a joint venture to create Detroit Diesel. Penske turned around the diesel engine business and grew a strong distribution network in a few years.
“We took a company with 3 percent market share and grew it to 30 percent market share,” Pordon said. Detroit Diesel is now a Daimler subsidiary.
Penske has also partnered with Daimler to distribute smart for two compact cars throughout the United States. The auto group, with headquarters in Bloomfield Hills, Mich., has risen to become the second largest publicly traded U.S. auto retailer.