The news that Holden will shut down local production of the small-sized Holden Cruze comes as no great surprise, really. After all, with Commodore production scheduled to end next year, the Cruze was always slated to go before its bigger brother.
It will no doubt bring about the doom and gloom of why Australia is failing as a manufacturing nation or what not, the usual doomsday prophesies from the regular brigade that seem to tag along to any factory closure announcement from the likes of Ford, Holden or Toyota.
The reality is rather simple. It doesn’t make sense to make cars in Australia considering: one, the size of the market and potential volume; two, the lack of export potential and high shipping costs and three, the high cost of labour.
There is always that niggling response to those three statements of fact that if Holden, Ford and Toyota made cars people wanted, then local manufacturing still had a chance. Well guess what? The Cruze competes in the gigantic small car segment – a segment where everyday private buyers are very much interested in – and even then, it managed a poor fifth in January behind the Mazda 3, Toyota Corolla, Hyundai i30 and even the apparently toxic Volkswagen Golf.
So let me guess this straight, when the Volkswagen Golf – which is apparently the cause of all global warming and infant death syndromes if you ask any American – is outselling the locally made Cruze, what does that say about Holden’s small car?
The end of local manufacturing for the Holden Cruze is a good thing for Holden. Once the Commodore goes with it, it will allow the brand to actually concentrate on competing with other manufactures on an equal footing and not always be held ransom to the demands of local production.
Furthermore, if the only locally made small car can only manage fifth against cars from Korea, Japan and Germany, then Australians simply couldn’t care less where their cars come from. The days of buy local and support Aussie jobs are gone, at least they are for cars.
Some of that blame falls on Holden’s shoulders, for it sells relatively average cars like the Captiva alongside excellent cars like the Commodore. One is an ancient Korean-made SUV that sells almost entirely on price, while the Commodore is an amazing engineering feat that showcases what we can do in Australia, with technologies that can be the envy of the mighty Germans.
Both have been sold under the same brand, to the confusion of buyers. If Holden is willing to puts its badge on the Captiva, than what value does it have on the Commodore? Furthermore, is the Cruze really Australian made? It’s basically assembled here, but it gains a great deal of its parts from Korea.
Ultimately though, the end of local manufacturing would’ve occurred even if the Cruze was the best selling car in its class. Even at double it current volume I highly doubt it would make sense to keep a factory running here while free trade agreements are in place with Korea and look to be extending to Europe as well.
You may at this point say, it’s the government’s fault for not supporting the local industry, and that would have some validity. However, in today’s open market, we cannot shield the local manufacturers to the detriment of consumers by imposing unnecessary taxes on imports. You only have to look at markets like Malaysia where Proton survives purely because the taxes on imported cars are outrageous.
When the market is open to competitors and they produce a better product at better prices, it’ hard to justify why that is a detriment to Australians.
At the end of the day, Holden is part of General Motors, and GM is a business that is out to make money, like every other business. It’s motivated by investing in things that have a return larger than the investment, basic return on investment principles. As it stands, investing in local manufacturing in Australia does not have a return that is larger than the investment, which is the only real reason why factories are shutting down.
So while we can all get sentimental about it, the end of Cruze production, soon to be followed by the iconic Ford Falcon, is simply an inevitability of our time and the local and international markets.
What is obvious from all of this is that, in Australia, we are amazingly good at engineering and designing cars. Look at the Holden Commodore and Ford Ranger. Two world-class vehicles that have been designed and engineered in Australia by Australians.
Even the rather old Ford Territory still holds itself high against most of its competitors. This higher-level of investment in research and development centres is what, as a country, we should aim for.
Our kids and the future generations need to be educated to be the engineers, designers and managers to make the future of the automobile happen, we can play a big role, but we need to get over the loss of local manufacturing first. Unfortunately, with our small and expensive population, we simply cannot compete on a global scale when it comes down to the actual production of cars. So let’s wise up and get serious. We are a car-loving nation, so let’s start acting like one.
What Alborz fails to understand in his simplistic overview of manufacturing in Australia is that while Holden did assemble a car to compete in the small car segment, it was a car that our designers and engineers had not enough to do with.
Cars like the Commodore, Territory, Falcon and Caprice sit, as far as I’m concerned, on a global scale in terms of build quality, driveability and design. These are cars that I, as an Australian — and degree-qualified engineer — am extremely proud of.
Yes, manufacturing in Australia is expensive, but without it, we’re just another nation that exports its talent and manufacturing prowess. Supporting and applauding the closure of plants, the loss of jobs and the outsourcing of talent is un-Australian. Anybody that agrees with him should hang their head in shame.
Given the opportunity to travel back in time, Holden should have designed a small car from the ground up. Given the success of Cruze on a global basis, it would have been our answer to the global small car market. We proved that the Commodore platform was enough to drive a huge number of sales in Australia over its tenure and form the basis for one of the most highly regarded sports cars in the American market, the Camaro.
Alborz’s taste in cars sits in the $200,000+ price bracket. With that in mind, I’d think that if he had actually driven a Cruze recently, he would realise that it’s actually an underrated car from a value and engineering point of view.
It doesn’t have the refinement of a Golf, for example, but that also means it has character and a level of enjoyment you may not find behind the wheel of a Volkswagen.
Alborz’s sentiment that “we simply cannot compete on a global scale when it comes down to the actual production of cars” is total nonsense. When first-world nations such as the USA, Germany, Italy and France still produce cars that sell for perfectly reasonable prices in their home markets, it’s a sign that simply pulling up stumps is a cop out.
If Australian engineers and designers can design a car from the ground up, we can also afford to manufacture it locally and have it sell well. If we had our time again and jumped on to the production of large, small and SUV vehicles from the ground up, Australia would still be a manufacturing nation capable of exporting and enjoying healthy profits.
Views and opinions like Alborz’s are uninformed and lack the patriotic notion that Australia is capable of being the best in the world at anything we put our minds to.
When we create, but then export the patent for technology and inventions like WiFi, the aeroplane black box, the rotary clothes line, the tank, solar hot water, the ultrasound, the bionic ear and the Scramjet, we declare to the world that we’re not good enough to create and run with something. Losing Australian manufacturing is nothing to be brushed aside, it should be a hindsight look and case study of where we could have done better, much better.
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