General Motors has shocked the automotive market today with news it will almost entirely exit the Australian markets – taking the Holden brand with it.
Sales, design and engineering operations will wind down by 2021 in both Australia and New Zealand, while Holden Financial Services and Maven in Australia will come to an end.
In a statement today Holden indicated staff will receive exit and transition packages, while work will begin soon on ending dealer arrangements, with some being offered the chance to remain parts and service outlets.
There are 800 Holden employees across Australia and New Zealand, with 185 dealers in Australia and 31 in New Zealand.
In a phone conference held today, the company indicated most of the staff will have departed by June this year.
GM International Operations senior vice president Julian Blissett says GM had taken the difficult decision after implementing and considering numerous options to maintain and turn around Holden operations.
“Through its proud 160-year history, Holden has not only made cars, it has been a powerful driver of the industrialisation and advancement of Australia and New Zealand,” says Blissett.
“Over recent years, as the industry underwent significant change globally and locally, we implemented a number of alternative strategies to try to sustain and improve the business, together with the local team.”
The company says it undertook a detailed analysis of the investment required for Holden to be competitive beyond the current generation of products. Factors impacting the business case for further investment included the highly fragmented right-hand-drive markets, the economics to support growing the brand, and delivering an appropriate return on investment.
“After comprehensive assessment, we regret that we could not prioritise the investment required for Holden to be successful for the long term in Australia and New Zealand, over all other considerations we have globally,” says Blissett.
“This decision is based on global priorities and does not reflect the hard work, talent and professionalism of the Holden team.”
GM intends to focus its growth strategy in Australia and New Zealand on the specialty vehicles business and plans to immediately work with its partner on developing these plans. While details remain unclear, that is likely to mean its bourgeoning business selling American sports cars converted to right-hand drive through Holden Special Vehicles – a partnership with Walkinshaw Performance.
Reports indicate the vehicles will be sold under the ‘General Motors Specialist Vehicles’ banner.
GM Holden interim chairman and managing director Kristian Aquilina says that given the significance of Holden through its history, it was critical the company worked with all stakeholders to deliver a dignified and respectful wind-down.
“Holden will always have a special place in the development of our countries. As Australia and New Zealand grew, Holden was a part of the engine room fuelling that development,” says Aquilina.
“Today’s announcement will be felt deeply by the many people who love Holdens, drive Holdens and feel connected to our company which has been with us for 160 years and is almost ubiquitous in our lives.
“Unfortunately, all the hard work and talent of the Holden family, the support of our parent company GM and the passion of our loyal supporters have not been enough to overcome our challenges.
“We understand the impact of this decision on our people, our customers, our dealers and our partners – and will work closely with all stakeholders to deliver a dignified and respectful transition.”
Holden says it will honour all warranties and pre-paid service contracts on its vehicles and offer parts for at least ten years though Aftersales networks.
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