Tuesday, May 5, 2009

Nissan Is Said to Be Possible Penske Partner in Bid for Saturn

Nissan Motor Co., Japan’s third-largest automaker, may form a venture with U.S. retailer Penske Automotive Group Inc. and General Motors Corp.’s Saturn, people familiar with the matter said.

GM is seeking to spin off or sell the Saturn brand and its distribution network through 350 to 400 U.S. dealerships. A new company with that distribution network could be operated by Penske and sell vehicles made by Nissan, its affiliate Renault SA or another automaker, said the people, who asked not to be named because discussions are private.

Nissan and Renault have expressed tentative interest in the venture, one of the people said. Fred Standish, a Nissan spokesman, and Frederique Le Greves, a Renault spokeswoman, declined to comment.

“We’ve looked at Saturn,” Chief Executive Officer Roger Penske said yesterday in an interview. “We look at a lot of opportunities. It would be premature to say we’re anywhere close to a deal.”

U.S. Saturn franchisees have collectively invested from $1 billion to $2 billion in their stores, parts and related equipment, according to dealer estimates.

GM, facing a June 1 deadline to cut debt and other costs or file for bankruptcy protection, plans to shrink its eight U.S. automotive brands to four.

Multiple Bidders

GM has committed to producing Saturn models through the end of this year and is willing to make them on a contract basis through 2011, Jill Lajdziak, general manager for the brand, said April 28.

GM is entertaining interest from multiple bidders, Lajdziak said last week. Detroit-based GM will accept bids for the brand until June 1 and will narrow down the list through the summer, with a goal of selling or winding down the brand by the end of the year.

Steve Janisse, a GM spokesman, declined to comment on Saturn bidders. GM is being advised by former equity analyst Stephen Girsky, the automaker reiterated in a statement yesterday.

In addition to selling cars at retail through 310 dealerships in the U.S. and U.K., Penske is the U.S. distributor of Daimler AG’s Smart cars. Unlike most other vehicle- distribution networks, Smart takes customer orders and deposits via a Web site, allowing dealers to keep fewer cars in inventory.
‘Plug and Play’

Penske executives refer to such a vehicle distribution method, sidestepping the traditional U.S. franchises in which only dealers can take retail orders, as “plug and play.”

Nissan’s U.S. sales, including its Infiniti luxury brand, have tumbled 36 percent this year. The Tokyo-based automaker has excess manufacturing capacity in North America and could build versions of its current models branded as Saturns.

GM introduced Saturn in 1990 to take on Japanese brands in the U.S. with a low-pressure sales approach and no-haggle pricing. U.S. sales tumbled 58 percent through the first four months of this year. Only Hummer, among GM brands, declined more sharply at 67 percent.

Penske Automotive, the second-largest publicly held dealer group, earned $16.3 million in first-quarter net income or 18 cents per share, down 50 percent from last year’s $32.3 million or 33 cents per share.

Penske lost 9 cents, or 0.7 percent, today to close at $13.47. It has gained 75 percent this year.