Holden will be axed in Australia at the end of 2020 – just three years after the end of local manufacturing and the lowest monthly sales since it was established in 1948 – as US car giant General Motors gets out of right-hand-drive markets globally.
Although Holden had been posting record low sales – which led to the end of the Commodore and Astra models late last year – the announcement has still come as a shock to industry veterans now the brand has lost its final lifeline.
General Motors will also close its Melbourne design studio and test track at Lang Lang on the south-east outskirts of Melbourne. Approximately 600 of the 800 jobs will be lost, with all being awarded redundancies. The remaining workforce of 200 people will take care of Holden's ongoing service and warranty commitments for up to 10 years.
Holden management informed head office staff and dealers about midday today. An official media statement from Holden is forthcoming.
A high-ranking company insider claimed the "agonising decision" had only been made in Detroit in the past 48 hours and that General Motors had every intention of reviving the brand following the end of local manufacturing, as evidenced by the introduction of the US-based Holden Acadia and Holden Equinox SUVs and upcoming Corvette sports car.
"Our intention was to turn around the brand ... there is zero blame to the local team," said the high ranking General Motors official. "This decision (about Holden) is all about investment priorities."
General Motors has been making a slow retreat from other right-hand-drive countries over the past three years, getting out of lucrative markets such as the United Kingdom, Japan, India and South Africa.
The three main remaining right-hand-drive countries were Thailand, Australia and New Zealand, but General Motors says it has become unprofitable to develop new vehicles for such comparatively small markets.
Globally, more than 75 per cent of all vehicles sold are left-hand-drive, while right-hand-drive countries account for the remaining 25 per cent of sales. However, car companies have less opportunities to recoup their investment because the cost to design, engineer and develop left- and right-hand drives is the same.
General Motors Specialty Vehicles
With the Holden name to be retired by the end of this year, General Motors is considering a new sub-brand called General Motors Specialty Vehicles (GMSV) that would sell selected US models – most of which will be converted to right-hand-drive by the company formerly known as Holden Special Vehicles, and which currently imports the Chevrolet Camaro muscle car and Chevrolet Silverado pick-up.
The Camaro and Silverado are currently sold through 65 of Holden’s 204 dealers nationally. It is unclear which of those dealers will continue under the proposed GMSV name and new arrangements.
While the new deal would initially apply to existing models such as the Chevrolet Camaro SS, Chevrolet Camaro ZL1, Chevrolet Silverado 2500 and upcoming Chevrolet Silverado 1500, other models out of the US are expected to follow.
Options include the Chevrolet Tahoe and Suburban seven-seat SUVs, as well as certain Cadillac SUVs that share their underpinnings. There is also the possibility the electric Hummer pick-up – due to go into production in the US two years from now – could be sold in Australia some time down the road if converted to right-hand-drive locally.
The introduction of the GMSV sub-brand also solves the problem of what badge to sell the iconic Chevrolet Corvette sports car under. It is due in Australian showrooms next year but will be factory-built in right-hand-drive. Its rear-engine layout made the conversion easier and more affordable on this model.
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