General Motors (GM) said yesterday that it will close its Saturn division by next year after the sudden collapse of negotiations to sell the brand to Penske Automotive Group
GM was left stunned, as until Tuesday it was under the impression that the deal would go through, but yesterday afternoon, just a day before announcing that it had clinched the deal, Penske pulled out.
PAG, the second largest publicly traded automotive retailer in the US by revenue, called off the deal as it could not arrive at an agreement with a third party contract manufacturer to supply vehicles for the brand.
In a statement Michigan-based PAG said, ''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 US, 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.''
PAG said that the board of directors of a contract manufacturer with whom it had negotiated the terms and conditions of an agreement had rejected the agreement. It did not identify th emanufacturer.