With its pending agreement to buy Saturn from bankrupt General Motors Corp., Penske Automotive Group Inc. may be opening the door on a new business model in the rapidly changing auto industry.
The deal, announced Friday, has Penske purchasing the Saturn brand, along with its parts inventory and the rights to its distribution network, from GM for an undisclosed price.
But the Bloomfield Hills, Mich., company will not buy any of the factories or tooling used to produce Saturn cars and trucks. Instead of making cars, Penske will outsource production, searching for low-cost manufacturers eager to find new markets for their vehicles.
The deal, which GM expects to close in the third quarter, could presage a newfound reliance on contract manufacturing as the increasingly global auto market goes through its most profound changes in decades.
"The proposed acquisition marks the beginning of a new business model in this industry; a model in which the distribution side of the business controls the brand, and manufacturing is conducted by one or more subcontractors," said Jack Nerad, executive market analyst at auto research firm Kelley Blue Book.
The model would essentially turn Penske into a middleman, owning neither the means of production nor the retail outlet -- akin to the way that some companies, including computer firm Hewlett-Packard, often don't design or manufacture many of the products they slap their names on and then wholesale to big-box retailers.
For the next two years, Penske will contract GM to build three models -- the Aura, the Vue and the Outlook -- a move that GM said would help it save roughly 2,000 manufacturing jobs at three plants.
Penske is searching for another carmaker it can pay to produce additional models that can be badged as Saturns, with the goal of producing one or two models to fill out the lineup and replacing the poorly selling Astra and Sky models.
In an interview Friday, Roger Penske, a former race-car driver and the company's chairman, would not confirm a rumored deal with Korean automaker Samsung Motors, which is owned by French automaker Renault.
"We have no deal with anyone," said Penske, who said he had been talking with a number of manufacturers about producing models that are of "the right quality" while focusing on fuel efficiency and keeping costs down. Instead of creating brand-new cars for Saturn, Penske is likely to slightly modify vehicles designed for foreign markets.
