GM: Saturn Must Move Upmarket

General Motors Corp. is injecting some life into its anemic Saturn Corp. operation with a host of new products.

But its game plan, highlighted at the Detroit auto show rollout of the Saturn Sky roadster and Aura sedan concept, has met with criticism by some analysts who say GM is moving the brand up market too far and too fast.

Bob Lutz, GM vice chairman in charge of product development, insists Saturn's move up the product ladder is necessary — and not as big a reach as critics contend.

“These vehicles will be more expensive,” he tells reporters. “What we're doing now, because of lack of demand, we're selling (Saturns) at prices that are ludicrous. We can't maintain selling Ions for $11,500. Those are Korean prices. Those aren't prices where you can make money on a U.S.-produced vehicle. The average transaction price is going to have to go up.”

Saturn has landed in trouble for a number of reasons, Lutz says. First, GM didn't think the division needed cutting-edge products, because it had built Saturn's reputation and cultivated a core group of loyal buyers on the basis of the brand's dealership experience.

Saturn also had too few models in an era of market fragmentation, where customers are moving into trucks, SUVs and cross/utility models, Lutz says.