General Motors (GM), the bankrupt US auto giant, yesterday signed an agreement with the world's second largest car dealership chain, Penske Automotive Group, to sell its Saturn brand.

The deal could keep alive GM's 350 exclusive Saturn dealerships nationwide and protect 13,000 jobs. GM's 51 Canadian dealerships, are not included in the deal.

The deal is the second in a row this week by GM in an effort to hive-off unprofitable and non-core assets of the company, which filed for bankruptcy on 1 June. (See: General Motors files for bankruptcy protection).

After several weeks of hectic discussion in various capitals of Europe and across the Atlantic, Canadian automobile parts maker Magna International and Russian bank bought majority stake in GM's Germany based Opel. (See: Opel picks Magna; job cuts loom over European plants). 

It is expected that the Saturn deal would be concluded in the third quarter. Although details of the terms have not been divulged, analysts believe that the price is likely to be in the range of $100 million to $200 million.

Through the deal Penske will get the rights for the Saturn brand and its five different models. GM would continue to produce its top-selling models Aura, Vue and Outlook SUVs on contract basis up to 2011. Production of the other two models, Sky and Astra will be stopped by GM.

Penske Group is owned by Roger Penske, former race car legend and owner of NASCAR and IndyCar racing teams. The group sells over 40 auto brands through a network of dealerships and franchisees in the US, Puerto Rico, Germany and the UK.

Penske is in dialogue with a number of global automobile companies to replace GM in the future for Saturn production.

"We have been in discussions on a worldwide basis with many people that have an interest in this marketplace," Penske said.

Saturn's general manager Lajdziak said, ''There has been a groundswell of support for Saturn, with our retailers and owners urging us to save the brand. We heard their call loud and clear, and it inspired us as we worked to secure Saturn's future."

Penske said he wants to retain Lajdziak in Saturn and also offered former Chrysler president Tom LaSorda a top position in the company.

Saturn was formed in 1984 to compete with Japanese automobiles on quality and service. GM built a new plant in Spring Hill, Tenn for Saturn production. On the business languishing in 2007, the factory stopped making Saturns. These days, the Saturn production is scattered at various GM plants.

Saturn has a highly rated brand value and outsold Buick and Cadillac in 2008, although the sales have plunged this year. More than 4 million Saturn vehicles have been sold since its launch in 1990.

The Saturn components factory in Spring Hill will be taken over by Penske as part of the deal.

Earlier this week, GM revealed a deal to sell Hummer to China's Sichuan Tengzhong Heavy Industrial Machinery. (See: GM's Hummer sold to Chinese company)

As part if its restructuring, GM plans to concentrate on its core brands; Chevrolet, Buick, GMC and Cadillac and curtail around 1100 dealerships and possibly sell two more brands; Pontiac and Saab.

Penske shares closed at $14.65, 0.34 per cent higher than the previous close in NYSE yesterday and 5.8 per cent higher at $15.50 after hours.