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Penske Automotive Terminates Discussions with General Motors to Acquire Saturn

BLOOMFIELD HILLS, Mich.--(BUSINESS WIRE)--Penske Automotive Group, Inc. (NYSE: PAG) an international automotive retailer, today announced that it has terminated its discussions with General Motors Company ("GM") to acquire the Saturn brand, citing concerns directly related to the future supply of vehicles beyond the supply period it had negotiated with GM.

Since announcing its discussions with GM on June 5, 2009, the company has been in the due diligence process to determine the feasibility of developing an independent distribution model for Saturn-branded products and service parts in the United States, including the sourcing of vehicles from GM and other potential suppliers. The company had negotiated a definitive agreement with GM to source vehicles on a contract-manufactured basis for a period of time. After this period, the company would have been required to source vehicles from another third party under a similar contract-manufacturing agreement.

Penske Automotive Group negotiated the terms and conditions of an agreement with another manufacturer; however, that agreement was rejected by that manufacturer's board of directors. Without that agreement, the company has determined that the risks and uncertainties related to the availability of future products prohibit the company from moving forward with this transaction.

General Motors Media Statement Attributed President & CEO Fritz Henderson

Today we learned that Penske Automotive Group (PAG) has decided to terminate discussions with General Motors to acquire Saturn. This is very disappointing news and comes after months of hard work by hundreds of dedicated employees and Saturn retailers who tried to make the new Saturn a reality. PAG's announcement explained that their decision was not based on interactions with GM or Saturn retailers; rather it was because of the inability to source new products beyond what it had asked GM to build on contract.

As a result of PAG's decision, we will be winding down the Saturn brand and dealership network, in accordance with the wind-down agreements that Saturn dealers recently signed with GM. Pursuant to the terms of those agreements, the wind down process will be determined and communicated shortly.

Saturn customers and owners will continue to be able to purchase and have their vehicles serviced at Saturn retailers during this process. Once the wind down is complete, Saturn owners will still be able to have their vehicles serviced at other GM dealerships. We will be communicating with our customers very soon to explain the next steps in this process.

Today's disappointing news comes at a time when we'd hoped for a successful launch of the Saturn brand into a new chapter. We will be working closely with our dealers to ensure Saturn customers are cared for as we transition them to other GM dealers in the months ahead. I'd also like to thank every GM employee and Saturn retailer who worked so hard to try to make this new beginning happen for Saturn.

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Saturn sales history, 1990-2009

Saturn sales history, 1990-2009

Automotive News
October 1, 2009

When Saturn was conceived in the 1980s, GM planned to sell 500,000 a year. The goal was never reached.
Year U.S. Sales % Change
2009 57,223* -59.2%
2008 188,004 -21.7%
2007 240,091 6.1%
2006 226,375 6.0%
2005 213,657 0.8%
2004 212,017 -21.8%
2003 271,157 -3.2%
2002 280,248 7.5%
2001 260,730 -4.1%
2000 271,800 16.9%
1999 232,570 0.3%
1998 231,786 -7.7%
1997 251,099 -9.9%
1996 278,574 -2.5%
1995 285,674 -0.1%
**1994 286,003 24.7%
1993 229,356 16.9%
1992 196,126 163.3%
1991 74,493 3860.3%
1990 1,881
*Through August.
**Peak year
Source: Automotive News Data Center
LINK:Automotive News -- In-depth coverage of the automotive industry
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