General Motors Corp. has given its Saturn division time to mount a spin-off of the brand, a possibility that has met with optimism among some of its retailers and skepticism among industry analysts.

Two significant hurdles stand in the way - financing the move and finding a pipeline to future products after GM turns off the tap after the '11 model year.

Saturn spokesman Steve Janisse tells Ward's a “price tag” has not been assigned to the brand, but a number of Saturn retailers have volunteered to invest in the venture.

However, with credit markets frozen, it would seem unlikely retailers could swing the deal on their own, and the prospect that GM might provide support seems equally dim after it raised its plea for taxpayer funding.

That could leave foreign auto makers looking for a toe-hold in the U.S. market.

For example, a Chinese auto maker might be able to act quickly before the 2011 deadline and begin exporting its cars to the U.S. under the Saturn brand, says analyst Aaron Bragman of IHS Global Insight.

“But this market already has too many dealers and too many brands,” he says. “And in the end, it may be that Saturn and its dealers come up with a solution GM doesn't like.”

Saturn General Manager Jill Lajdziak, in a letter to the brand's 400 retailers and 1.5 million customers, confirms a potential spin-off of an independent “Saturn Distribution Corp.”

“The goal from a product perspective would be to find future vehicles that match the Saturn brand: fuel-efficient, safe, reliable and affordable,” she writes. “From a retailing perspective, we would build on our core strength of unmatched customer service.” But she adds a spin-off would be “a difficult and complex task.”

Auto analyst Erich Merkle says, “The real strength is the distribution network, and (those dealers) are very good.

“Only Lexus dealers rank above them in terms of customer satisfaction, and that's the real travesty of this situation.”

Saturn sold 188,004 units in 2008, a 21.7% decline from 2007, Ward's data shows. The brand's sales peak was in 1994, with 286,000 deliveries, falling far short of the 500,000 goal envisioned.

According to an updated viability plan GM filed as part of its agreement to get more taxpayer loans, Saturn has combined with the Saab and Hummer brands to generate an average annual before-tax-loss of $1.1 billion.

Saturn, alone, has contributed about $3 billion in revenue to GM coffers since 2003, compared with $88 billion from Chevrolet, $41 billion from the Buick-Pontiac-GMC channel and $15 billion from Cadillac, the Treasury filing reveals.

“GM has finally come clean with the truth,” Bragman says.

Dealer Roland Daniels, who has three Saturn stores in Florida, says GM's action is not the outcome he had hoped for. “We have to figure out a way to keep going.”

As it stands, Saturn appears headed for a cruel fate, less than 20 years after entering the U.S. market with vehicles featuring dent-resistant plastic body panels and an extraordinary dealer network.

Its original weakness was its limited lineup. GM tried to change that in recent years with a product infusion.

“Just when (Saturn) started to get a full portfolio of new product, along comes a recession,” Daniels says. The possibility of a spin-off for the distribution network “holds a lot of promise,” he adds.

How the Saturn Distribution Corp. goes “will determine the outcome,” says Jim Cimino, CEO and president-Phil Long Family of Dealerships, which includes five Saturn stores in Colorado and Arizona.

But he has plenty of questions: Will GM be a partner yet? Will Toyota be a partner? What corporation will be a part of the partnership?”

The brand is worth saving, says Cimino, one of the original Saturn dealers. “They separated from GM and their standard operating procedures, and independently created a successful business that set new standards.”