At GM, the Stealthy Return of a Dead Brand, at Least in Spirit

Chevy's no-haggle pricing promotion evokes the defunct Saturn.

By + More
FE_DA_0529generalmotors.jpg
A General Motors dealer displays a banner promoting a staying in business sale at it's premises in Santa Monica, Los Angeles on May 27, 2009. General Motors was skidding toward bankruptcy after bondholders rejected a plan to swap a large portion of the troubled automaker's debt for equity in the firm. GM said it failed to get enough participation in a plan to exchange 27.2 billion dollars of its notes, which had been required under GM loan agreements with the US Treasury and the company's own 'viability' plan.

It used to be called "a different kind of car company." One of those differences was that it didn't make any money.

[Photo Gallery: Historic Redevelopments Across the Country]

General Motors established its Saturn division in 1985 as a way to experiment with a few novel ways to sell cars. One hallmark of Saturn dealerships was "no-haggle pricing," meant to draw mild-mannered car buyers who hated the usual process of negotiating with a dealer. Saturn died in 2009, one of the four brands GM killed when it declared bankruptcy and restructured. But no-haggle pricing is suddenly making a comeback.

Chevrolet is now attempting no-haggle pricing for a spell, as a way to clear out 2012 models as 2013s begin to arrive in showrooms. The end of the model year is usually a time when automakers offer generous incentives and try out different gimmicks for slashing old inventory. Chevrolet's "total confidence pricing" program entails fixed, non-negotiable prices on all 2012 models, plus a 60-day return policy for anybody who buys a Chevy and decides they don't like it. It lasts until early September.

If Saturn is any guide, Chevy's no-haggle offer will certainly appeal to some buyers. Saturn drew a small but loyal set of acolytes who loved the folksy, low-pressure ambience of its dealerships and enjoyed the cars as well. Surveys clearly show that most car buyers dislike the process of haggling over price. Nor do they trust salespeople at the dealership. With virtually no dealerships offering true no-haggle pricing these days, Chevy's scheme may very well draw some customers who would not have considered a Chevy otherwise, which is part of the intent.

[See a defense of the Chevy Volt.]

There's a catch, though: People are suspicious of list prices too, because they've been indoctrinated to believe that nobody pays retail. This was a problem in the '90s, when Saturn enjoyed its best years, and it's even more true today, with the Internet.

Websites such as Amazon allow nearly instant price comparisons, to find the best deal, which tends to force prices down. Auction sites such as eBay have popularized the idea of faceless negotiating, with the site's software doing most of the haggling for you. In that model, buyers set the maximum price they're willing to pay—which is unknown to the seller--and it's up to the seller to meet it, or walk. Internet pricing has already made its mark on the car business, since many dealerships now have an "Internet manager" who will negotiate pricing by E-mail.

Besides, it's hard to offer a single price on automobiles, since they come in so many different configurations. I checked Chevy's total confidence price for a Traverse crossover, equipped with all-wheel drive, in the 1LT trim line, and got 10 different prices ranging from $32,657 to $35,715.

That's not necessarily a bait-and-switch by Chevy. The variation mostly seems to come from differences in the way models sitting on dealer lots are equipped, since some have no options and some have a bunch. Still, that can be a confusing turn-off for a buyer expecting a simple pricing menu, as with an iPad or a coffee maker.

[See why Mitt Romney's stance on GM would cost taxpayers.]

Saturn ultimately failed for a variety of reasons. Many GM executives undermined the brand, by starving it of resources, since they felt threatened by its business model. Saturn models mostly ended up as indistinct "badge jobs" that were simply Chevys or Pontiacs with a different logo pinned to the body. The division lost money nearly every year.

Still, Saturn's demise left a few tears of regret among loyalists who felt it was a worthy, consumer-friendly experiment. They must be pleased that the spirit of Saturn will infuse Chevy for a while.

Rick Newman is the author of Rebounders: How Winners Pivot From Setback To Success. Follow him on Twitter: @rickjnewman.