The sales lot of the closed Saturn of Colma dealership sits empty September 30, 2009 in Colma, California. General Motors announced today that they will close its Saturn brand after negotiations with Penske Automotive to sell the brand fell apart. (Justin Sullivan/Getty Images)
With Penske out of the picture, and GM unable to find another buyer for what was branded a "different kind of car company," the automobile giant had no choice but to announce a halt to Saturn brand. GM created Saturn in 1985 to compete with Japanese automakers, after their success in selling smaller vehicles.
Penske pulled out of the deal nearly four months after agreeing to buy the rights to Saturn. The contemplated Penske-GM deal guaranteed that GM would continue to make the Aura sedan, the Vue and Outlook SUVs for 2009-2010. Penske was to find another manufacturer to continue making Saturn cars in 2011.
The other manufacturer was reportedly Renault SA, which is headquartered in France. On Wednesday, Renault COO Patrick Pelata said that talks with Penske over the Saturn unit had broken down at the last minute.
“We negotiated with them but we were unable to reach agreement at the end,” Pelata was quoted by Bloomberg.
The closure of the Saturn brand means that Saturn's 350 dealers will also now have to close—with 13,000 expected job losses.
General Motors filed for government-assisted bankruptcy in June 2009, after a restructuring deal with unions fell through. It emerged a month later, focusing on core brands Chevrolet, Cadillac, GMC, and Buick.
The U.S. automobile market is also on a decline. Industry sales are expected to go down to 9.3 million cars sold per year, according to a new study by Edmunds.com, which represents a decline of 23 percent from last year.
Wall Street Journal estimated that General Motors has sold only 152,000 units in September 2009, down 46 percent from last year.
Chrysler, another automaker that filed for bankruptcy and is now owned by the U.S. government, also reported a drop in car sales last month.
