Penske Automotive Interested in GM's Saturn Brand

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DETROIT, May 5, 2009; Soyoung Kim writing for Reuters reported that Penske Automotive Group, the No.2 U.S. dealership group, said on Tuesday it is interested in acquiring General Motors Corp's Saturn brand and distribution network in a bid to grow its business.

Penske, which has 310 retail automotive franchises and is the exclusive U.S. distributor of Daimler AG's Smart cars in the United States, said it has not yet made a proposal to GM.

Penske is the second bidder to disclose interest in Saturn.

Last month, an investor group that includes private equity firm Black Oak Partners LLC and some Saturn dealers said it approached GM about buying the assets of the brand and distribution network.

GM, which announced plans in February to either spinoff or shutdown Saturn, said it has a number of potential buyers for brand and would look to secure an agreement later this year. It has retained S.J. Girsky & Co as a financial adviser.

It created Saturn in 1984 to compete with Japanese vehicles in terms of quality and service and created a "no hassle" flat-price sales model that took much of the negotiating out of buying a new car. The brand languished over the past decade.

GM, which has taken $15.4 billion of U.S. government loans to operate since the start of the year, has scrambled to unload underperforming brands such as Saturn and Hummer, as part of a sweeping restructuring mandated by Washington.

Saturn sales dropped 22 percent in 2008 -- worse than the 18 percent decline in the overall market. Sales are down 58 percent in the first four months of 2009.

Editing for Reuters by Leslie Gevirtz

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