SATURN'S ADS TO FOCUS LESS ON FOLKS, MORE ON LOW COST: GM UNIT FIGHTS SMALL-CAR SALES SKID

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General Motors Corp.'s Saturn subsidiary is shifting the focus of new ads to highlight such issues as safety and the low cost of ownership.

Three new national TV commercials and six new print ads will begin appearing in the coming weeks via Hal Riney & Partners, San Francisco.

Joe Kennedy, VP-sales, service and marketing, said the new ads focus on the things identified by consumers in research as most important to them when in the market for a small car.

`LEVERAGING KEY FACTORS'

"Every aspect of our upcoming marketing will be further leveraging those key factors," Mr. Kennedy said. "Nine out of 10 people who bought in our segment didn't buy us because they don't realize our low costs."

Look for the new ads to tout the lower cost of Saturn parts and insurance, and the car's ability to retain value.

Saturn, like its small-car competitors, has seen sales skid in the past year.

"Our goal," said Mr. Kennedy, "is to gain market share."

The new ads also will name specific Saturn models, something rarely done in the past. And there will be less focus on the people who build Saturns.

"We believe we've driven that story home in the last two model years, so you'll see less of that," a Saturn spokesman said.

There are other reasons to move the focus off the factory floor.

WORKERS FEAR LAYOFFS

Earlier this month, Saturn's plant workers voted to keep their cooperative labor agreement rather than switch to a typical GM-United Auto Workers contract. But the vote highlighted workers' fears that the sales slump would lead to layoffs.

"In the last few weeks, we learned there's a lot of frustration on the floor that we need to address," said John Michaud, financial secretary for UAW Local 1853, which represents Saturn workers.

Mr. Kennedy declined to reveal '98 ad spending, but Saturn typically spends nearly $200 million annually in measured media, according to Competitive Media Reporting.

100-PLUS NEW DEALERSHIPS

As part of its plan to grow market share, Saturn plans to open more than 100 new dealerships, mostly in smaller markets, over the next two years.

Saturn's 1997 sales slid to 251,099, down 9.9% from the year earlier, according to Automotive News. In the first two months of 1998, sales slumped to 30,001, a decline of 20% from the same period a year ago.

Don Hudler, chairman and president of Saturn, blamed the slump on lower gas prices, which he said are encouraging buyers to purchase bigger vehicles.

"There are some significant incentives in midsize, and when you can buy a midsize car for the same cost as a small car, that's where the crunch comes in," he said.

Saturn has a limited product lineup, but will get a larger sedan in 1999 and reportedly a sport utility vehicle down the road. Saturn refused to discuss future product plans.

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