DETROIT (Reuters) – An investor group including private equity firm Black Oak Partners has approached General Motors Corp (GM.N) about buying the assets of its Saturn brand and distribution network, the group said on Wednesday.
The group, which also includes Saturn dealers, said it was in talks to buy Saturn Distribution Corporation, an independent GM subsidiary with which Saturn dealers have franchise agreements.
The group aims to rebuild Saturn as a diversified auto distributor and retailer, initially sourcing vehicles from GM and eventually offering vehicles from a range of automakers through the existing 440 dealerships in the United States and Canada, the group said in a statement.
It planned to source small, fuel-efficient vehicles from a number of manufacturers to be sold under the Saturn brand.
GM and its Saturn dealers said in February they were moving toward a deal to spin off the brand’s distribution network and open it to other manufacturers after 2011.
GM was not immediately available for comment.
The No.1 U.S. automaker, operating with $13.4 billion of government loans since the start of the year, is reviewing underperforming brands, including Saturn and Hummer as part of a sweeping restructuring mandated by the U.S. government.
GM is also under pressure to win deep concessions from its bondholders and the United Auto Workers union, with the government warning the alternative would be bankruptcy.
“GM will be relieved of liabilities related to retailer franchise agreements and avoid the downstream financial fallout on their other brands that would result from closing Saturn retail facilities,” said John Pappanastos, a spokesperson for the investor group.
GM created Saturn in 1984 in a bid to compete head-on with Japanese vehicles for quality and customer service.
The first Saturn dealerships opened in 1990 and pioneered a “no hassle,” flat price sales model that took much of the negotiating out of buying a car.
But the brand languished over the past decade as GM throttled back on new investments. An attempt to reinvent the brand under the stewardship of retiring GM product chief Bob Lutz failed to revive sales, despite strong reviews for products such as the Saturn Aura sedan.
Saturn brand sales dropped 22 percent in 2008, worse than the 18 percent decline in the overall market.
(Reporting by Soyoung Kim; Editing by Brian Moss and Andre Grenon)