From Autobeat Daily 1-17-05


SATURN COUNTS ON MONEY-LOSING SKY ROADSTER
TO REVIVE IMAGE.

GM says it has no hope of making a profit on its new Saturn
Sky roadster but says the car is worth selling if it changes
consumer perception about the struggling brand.
Saturn hopes to sell 10,000 of the little two-seaters
annually. But GM CEO Rick Wagoner tells the Chicago
Tribune the Sky won’t be profitable—even if Saturn sells
every one it can make for five straight years.

Such is the risk of “halo” cars, low-volume, often
performance-oriented models designed to generate buzz
that translates into sales of more practical vehicles carry-
ing the same brand.

The Tribute points out that two recent halo cars, the
Chevrolet SSR pickup and Ford Thunderbird, have
fizzled. Chevy targeted annual sales of 13,000 SSRs but
sold only 9,700 of them in 2004. Ford’s retro Thunderbird
started strong but soon faded, with sales last year dropping
34% to 12,000 units.

 

I wonder if the Tribute pointed out the MSRP of the SSR and Thunderbird were both around $40k. I cant believe if the Sky comes in a round $20k it would have a problem selling 20k units a year, mush less 10k.

 

I think he is wrong about the Sky and Kappa in general. I hope they are prepared to up production if demand merits it. At any rate, not a smart thing to say in a press release IMO.

 

Only 10k a year??!?!?!? what the hell is he thinking? its going to sell like mad.

 

Wagoner doesnt doubt the Sky will sell very well with the price set in the low $20,000's but the fact if GM sells everyone they can possbily make it still wont turn a direct profit.

The Sky (and most likely the Solstice too) are intended to get people into the showrooms and get tons of free press in car mags and etc because of their incredible value and bang-for-buck. The problem I see is the the next Camaro won't have the luxury of being a money-losing halo car but it must be profitable and be able to sustain its sales volume for many years so I wouldn't look to the Sky's/Solstices low entry price as any indicator of the base price of the next-camaro.

 

It's too bad they can't figure out how to make inexpensive cars and make a profit on them.

 

I've been hearing that the price for the Sky is going to start where the Solstice tops off. If that is the case, I can see how Saturn only plans on selling 10K/year.

 

This may be a sort of cat and mouse game they are playing with Kappa. Time will tell.

 

Even if they sold the Sky for $25,000 each GM still wouldnt make money on them directly according to Wagoner.

 

GM's stealing a page right out of Toyota's book.

Toyota makes the Prius. It shows that Toyota is an innovator and is the most technologically adavanced car company. Toyota prices the thing to where it is affordable, showing that they can give the customer one of the most technologically advanced cars to the masses.(anybody can make something that is state of the art for 50K, look at how many awesome sedans are in that price range). I know Toyota loses money directly on the Prius, but look at how much that car has boosted Toyota's image. It has more than payed for itself with the image boost it has given Toyota. People consider Toyota to be one of the best car companies. The Prius has further reinforeced this idea.

GM is doing the exact same thing with the Sky and Solstice.

 

I am not sure where everyone gets this low 20's stuff. Every time GM talks about the Sky they say the word "upmarket". The low 20's is not upmarket. As a matter of fact thats the price range for the solstice and the miata. Upmarket roadster would be high 20's low 30's.

 

At least GM is showing signs of realizing the value of a particular vehicle to it's brand, regardless of the it's sales volume or profit.

 

Yeah. For some cars, the benefits go beyond simple profits and sheer volume and i'm glad GM realizes that too.

10k sounds very low for this car. Then again, 11k is about what the Miata sold in 2003, but that was an aging model near the end of its life-cycle. It's hard to imagine that an attractive, fun, sporty, open top, affordable car like the sky would have a hard time selling 30k a year, but i guess GM looked at the market and figured that's all they could hope for or something. Even chevy managed to sell a little over 12k convertible c5's last year and that's double the cost of the sky. Maybe the small affordable 2 seater convertible market is just that limited .

 

By keeping the Sky demand high and production low it will force alot of people to by other Saturn vehicles because many of them wouldn't want to wait 6 months to get their car.

While this strategy might back fire, the Sky will get people into the showrooms then the sales people with do some old bait-n-switch to get them in a more practical Aura.

 

I always got the impression that their usage of upmarket meant upmarket from being considered the equal of Hyundai and Suzuki. Saturn would kill their emergence before they even got off the launch pad if they started trying to sell cars in the high 20s and low 30s. Not going to happen. Or if it does it won't last long.