This week’s news that Ford Motor Company will shutter its manufacturing operations in Australia came as a quite the shock to the automotive realm. The development, however, sheds light on a sobering reality: that manufacturing in Australia is extremely tough, even for the most committed of automakers.
Ford’s move also raised questions about whether a similar fate awaits GM Holden and its manufacturing concern in Australia. Hoping to curb any and all speculation, Holden released the following statement:
It reads as follows:
Despite Ford’s announcement to end local manufacturing, we believe the industry can survive in Australia and has already adjusted in large part given Ford’s relatively low production volumes.
Holden set out a 10-year manufacturing plan that was agreed with the Australian Government in 2012, based on the economic and market conditions at that time. That plan would see Holden invest a billion dollars in this country and secure production of two all-new global vehicles out to 2022.
The industry needs swift action to make Australia’s automotive policy settings clear, consistent and globally competitive as quickly as possible.
Holden is working closely with the Australian Government, Federal Coalition and the State Governments to ensure the viability of the industry in the face of the historically significant economic challenges facing the country.
Comments
Ford (global/usa) never liked Ford Australia for some reason. Ford AU had to practically get on their hands and knees and beg head office in USA to allow them to make the Territory which went on to become a class leader that is way ahead of its competition.
Thankfully GM know the importance of Holden and Toyota know how important it is to keep manufacturing in Australia. Ford are already suffering they same way Mitsubishi did in 2008 when they closed their Aussie plant with their imports suffering from decreasing sales too.
Maybe the Falcons days are numbered with Ford maybe replacing it with Fusion or simlar. Glad GM has stuck with Holden & the Commodore 🙂
Yes, V8Jon, the Falcon’s days are numbered the same way as probably also those of the Holden Commodore are numbered.
In a “best selling cars blog” I read that in 1982, “the Ford Falcon was the most popular model in Australia with 84,184 sales and a whopping 13.7% market share, ahead of the Holden Commodore at 78,429 units and 12.7%” and that “these two models used to command over a quarter of total Australian sales, a market share that has dwindled down to just 4% in 2012 and… 2.6% last April! ”
According to another article in the same blog, the 10 best selling cars in March 2013 were:
Mazda3
Toyota Corolla
Toyota Hilux
Hyundai i30
Nissan Navara
Holden Cruze
Mitsubishi Triton
Toyota Camry
Mazda CX-5
Ford Ranger
(Holden Commodore ranking 12th).
And the 10 best selling brands:
Toyota
Mazda
Nissan
Hyundai
Holden
Ford
Mitsubishi
Volkswagen
Subaru
Honda
(Opel ranked 31, directly after Mini, Alfa Romeo, and Porsche).
For the numbers, find the blog, and look up category “Australia”.
As to Holden giving up production in Australia — I can’t believe it, since that would destroy the perception of Holden as an “all Australian” brand. Ford is a Ford, there is nothing telling the customer about the production location. This is not much different from Opel being perceived as a German brand, although most of the Corsas are built in Spain, the SUVs Antara and Mokka in South Korea, and soon the Astras only in Poland and on Great Britain.
@Observer7, @V8Jon
The Holden Commodore was 4th on the sales chart for several months but by February and March, most new car buyers realised there was the new VF Commodore on the way so as expected the car dropped on the sales chart. Holden didn’t start their run out deals on the VE until April. When you take out commercial and utility vehicle sales, Nissan would be below Holden. Holden would be 3rd or 4th depending on whether Hyundai is having a good month or not. Holden may be able to regain 2nd once the VF is out, definitely cement 3rd though.
“Holden would be 3rd or 4th depending on whether Hyundai is having a good month or not.”
And that in and of itself conflicts with the notion that Holden’s reputation is strong in Australia.
If Hyundai (flippin’ Hyundai?!) is outselling Holden — a local brand that’s been around for decades and that has (supposedly) built a solid and trusted reputation, then the Holden brand is anything but strong. In other words, if an also-ran brand that no one seems to care about (like Hyundai), with little (or literally zero) ties to Australia (like local production) can come in and upstage Holden on its home turf, then any businessman worth his salt will realize the need for some drastic changes.
Hyundai’s success at Holden’s expense is particularly eye-opening when one considers the fact that both Holden and Hyundai sell mainstream vehicles in nearly the same exact segments for very similar prices. Even more disturbing is the fact that Hyundai (for now) competes in roughly half of the segments that Holden competes in. What will happen when Hyundai expands its portfolio (and subsequent market reach) by introducing the acclaimed Azera, Genesis Coupe, Genesis Sedan, and/or Equus in Australia?
It all boils down to this: while new and agile competitors (Mazda, Hyundai, to name a few) are beginning to eat Holden’s lunch, Holden (and some of its fans) are still too caught up on heritage and tradition in regards to the Holden name and brand. They’re too scared to realize that the obvious business move is to begin introducing Chevy into one of the only remaining markets that lacks the brand.
The other option is for GM to continue sitting on the sidelines with Holden, hoping that reputation and consumer preference will miraculously improve. As it does this, competitors will move in and conquest its buyers, sinking it from 3rd/4th to 5th, 6th, 10th and lower. It might be hard to swallow, but it’s reality.
Don’t forget that at the moment Hyundai is selling some VERY attractive cars. Couple that with good prices, good warranty, and good fuel economy, and there’s little to not like. Something drastic does need to be done, though. Improved EVERYTHING.
@Holden4Life:
According to a chart shown at the source which I mentioned previously, sales of the Holden Commodore fell continously over 10 years from near 90.000 in 2002 down to about 30.000 in 2012, with slight increases from 2006 to 2007 and 2009 to 2010. This is not just a conjunctural change from one month to another. This is, as the same decline of the Ford Falcon shows, not a Holden problem, but a change in the overall car market, where now the compact class dominates, and where Holden is present with the Cruze. Quote: “Ford’s traditional local best-seller the Falcon has seen its sales drop by 81% over the last decade, going from 73,220 units in 2003 to just 14,036 in 2012”.
@Alex Luft:
GM has introduced Chevrolet to Australia, but under the badge of Holden, the same way as Opels appear in the United Kingdom as Vauxhall. Giving up the Holden brand name? This reader contribution on the “best selling cars” blog comes to my mind: “I get this question all the time. My answer is no different than the one answered by most Holden and Ford AU owners in Australia; national pride.” That’s why, to my judgement, GM is holding to the Holden and Vauxhall brands. And GM introduced Opel in the Australian market as a 2nd leg to walk on.
As to Hyundai and Korea — Hyundai/Kia ranked #4 in a 2011 “World ranking of manufacturers” (without Chinese production) by OICA (International Organization of Motor Vehicle Manufacturers), before Ford. And Korea ranked 5th in the OICA production statistics by country, after China, USA, Japan and Germany.
@Observer7 good points all around. But it seems that the “national pride” differentiator (if that’s what it is) isn’t really working in Australia, especially when a brand (Hyundai) with little to no national ties to the country swoops in and beats GM/Holden at what is seemingly its own game.
At that point, national pride (a subjective sentiment) should take a back seat to business strategy (an objective development).
May I remind you what you yourself wrote Apr 20, 2013, regarding “General Motors Open To Exporting Vehicles From China To The U.S., Says GM China President”?
“Suffice to say that if GM ever begins to do this, it can wave goodbye to any kind of patriotism the American public still has in the automaker or its brands.
But outside of the nationalistic nightmare that importing Chinese-built cars will undoubtedly bring,” and adding “GM needs to send its executives to the “dancing around questions 101″ class (we hear they’re offerred in Washington D.C.) — otherwise, the grandiose momentum built up by Buick in the United States over the last two years will vanish overnight.”
And later, replying to a reader’s contribution: “For starters, the image tradeoffs alone will have negative repercussions for Holden and its products. An Australian company, bailed out by Aaustralian taxpayers, taking production out of Australia and instead importing from China.”. ‘xcuse me, I edited the above statement somewhat, to bring it up to the current theme….
Ah, but those aren’t one and the same.
The crux of the matter is that Chevrolet sales in the U.S. aren’t dropping like a rock. But they are definitely on the decline in Australia for GM Holden. Plus, North America in general is highly profitable for GM… while Holden keeps turning in losses on what is becoming a regular basis.
So whatever it is that Chevy (and company) are doing in North America is working, be it local production leading to national pride-related sentiment, marketing, pricing, sales efforts, etc. By contrast, whatever GM (Holden) is doing in Australia clearly isn’t working… hence, something needs to be done to correct the problem.
In other words, it seems that the Australian public at large is no longer interested (or interested as much) in matters of national pride in making decisions on the brands of cars it buys — especially when the likes of Hyundai and Mazda come in and start eating Holden’s lunch more often than most Holden fans would care to admit.
But to your point, building product locally (for financial reasons or for those related with national pride) and changing the brand aren’t one and the same. Either way, something tells me that, at least for Australia, car buyers are beginning not to care about either. So it’s up to GM to “get with the times” (to use an old adage).
Not one and the same? When someone in the thread on imports from China writes “I want to state something for the record.
I will only buy American cars. And I will only buy from GM or Ford or Chrysler.
I will never buy any cars built outside of NAFTA. And I do try to buy American built where I can but we all know that buying 100% American is possible. I always say we are very lucky we still have any cars built here. They are one of the last commodities even available that are built here.
However I am not the majority of Americans. They do not care where what they buy is built. Evidence is all around us.”
This is even beyond what I quoted from this Australian blog site.
And please remember, as to the economic success, that General Motors Corporation actually went bankrupt in 2008, and that it was renamed to “Motors Liquidation Company” (MLQ). What is acting now under the GM brand is a new company, “General Motors Company” which had taken over some assets from the MLQ, with financing from the US government and the UAW. A bankruptcy which by all rules of capitalist economy should have led to the complete vanishment of GM; but the “rules of the market” had been overturned by government action and by blackmailing the unions.
And please let me remind you that this bankruptcy resulted from a long term decline of GM and the other two of the US automobile manufacturers.
And please let me remind you that the current success of this new company using the GM brand name is largely due to cars and platforms developed in Korea and Germany, and in some part also in Australia. The only “all-American” (as apple pie) are these pickups and very recently the Alpha platform underpinning the ATS and new CTS.
Not “one and the same”?
The US case is worse than the Australian one, I say.
“Der Fisch fängt vom Kopf her zu stinken an” (the fish starts rotting from the head), as a German idiomatic phrase goes.
Yes but the Commodore remained the most sold car in Australia until 2010. It finished second in 2011 and 3rd or 4th overall in 2012. On a monthly basis, it remained mostly at 4th whilst 2nd, 3rd, 5th and below fluxuated. 1st was the Mazda 3. Despite declining sales compared to previous years (and models), the Commodore has maintaned its top 4 position and only recently fell to 8th on the passenger car sales chart (12th including commercial/utility) and that’s purely because the VF Commodore is on it’s way. BUT IT’S STILL IN THE TOP TEN!!!
Just because sales aren’t what they used to be doesn’t mean the Commodore is dead. Yes large car sales are declining as a result of changing consumer demands but that doesn’t mean the large car category is dead. To hold onto 4th and to remain in the top 10 with a new model just 2 months away is impossible in the most competitive market in the world. Only 73,000 passenger vehicles were sold in March 2013 in Australia where we have 70 car brands!!!
The Ford Falcon could have still been in a similar position to the Commodore in sales but that’s where Ford Australia’s poor marketing came in and the constant rumour of Ford closing local production scared off sales. In March 2013, the Ford Focus was THE ONLY FORD IN THE TOP 20 for passenger sales. Focus was 10th, the next highest for Ford was the AUSTRALIAN Ford Territory at 23rd. Ford can blame themselves for being in the position of having to close down Aussie production in stead of being like GMH and Toyota who adjusted and are adjusting their operations to meet consumer demand. Toyota begun manufacturing of the Hybrid Camry model and its engine. Holden begun production of the Cruze and added fuel saving technologies to the new VF Commodore. Holden did cut its staff in order to reduce the amount of vehicles being produced as well.
Mike Deveruax stated in an open letter to australians in the June edition of Wheels Mag that GM & HOLDEN “are the most commited to Australian production [compared to the others, Ford and Toyota]”.
Alex, the Holden brand is beloved in Australia and many Australians are disappointed in their fellow countrymen buying Hyundai’s and Mazda’s over Aussies. One reason why Hyundai is able to beat Holden in sales is because their vehicles come with the best warranty in Australia and are in many ways better than GM’s global cars sold under the Holden name. In fact, I would go as far to say that the only reason why the Barina (Sonic) and especially the Barina Spark (Chevy Spark) sell is becuase they wear a lion badge. If Holden were to produce more Australian designed and made cars (in other categories of course), they would sell more than any other brand in Australia in passenger car sales. Toyota would be the only ones who might sell more simply because they have a car/cars in every possible category.
The Malibu will barely sell but the return of the Holden Torana would do wonders for Holden AND GM. Not to mention more Aussie cars, mean more better products than can be sold through GM’s brands world wide. Holden desperately needs to make a Commodore based SUV with Hybrid, diesel and peformance options that will bring over the Ford Territory buyers and steal sales from Toyota, Mazda and Hyundai.
I have more to write but I don’t have the time right now and I don’t think you’ll keep reading/read all of my post.
Hopefully giving up on Holden isn’t the answer, they seem to be being squeezed from all angles with competition fierce with many rivals in a small marketplace. There are no right or wrong answers only opinion, however my possible solution would be to go back in history like the first generation Commodore back in 1978 & share development with GM’s European operations thus having a Commodore for Australlia & New Zealand and a Omega for Europe all models would come in Saloon, Estate & Ute (maybe a coupe later) & have 4, 6 & 8 cylinder engines along with diesels & with a choice of manual & automatic. This coupled with the additional sales it would generate would solve both continents dilemma’s (filling a massive gap in range & replacing legendary models) & would certainly make money with being sold over more countries.
an inline 4 cylinder engine is a possibility but for some reason a diesel engine in the commodore isn’t going to happen, commodore fans just don’t like the idea of a diesel engine in a commodore (even if no one buys it). Would like to see a Hybrid version of the Holden made 3L V6. For some reason Hybrids are rare and only Lexus, Toyota and Honda offer hybrids, compared to america where hybrid engines are very common…
Joint development between Oz & Europe could see a RWD large platform for Commodore & Omega (saloon, estate & ute) a shortened version of this same platform could have a coupe model Monaro & Monza, a further shortened of this platform could see another model Torana & Belmont (this time RWD) in 4dr saloon variants & not ruling out 2dr coupe model Torana, Firenza & Manta.
I like the sound of that! Don’t know how people will feel about the badge engineering though and I for one don’t like the excessive badge engineering in GM. I run the facebook page “Pontiac GTO, G8, Vuaxhall VXR8 and Caprice PPV are Australian” (Link: http://facebook.com/holdenisaustralian ) which I started after arguing with die hard Pontiac fans about whether or not the G8 is Australian.
Since I started in back in 2010, most people have agreed with the cars being Australian but every now and again (most recent being a few hours ago), someone tries to argue that GM owns Holden, GM is american, therefore everything Holden designs and makes is American. Kraft foods is american, they own Vegimite, therefore the food that is most accociated as being Australian is now American??? My point is that I love Holden too much and don’t think I could cope with their product (even if it’s co-developed with Opel or Chevy etc.) being sold under a different name worldwide.
Bust seriously, your idea is great and could solve a lot of GM’s problems. I think the return of the Torana would dominate the small to medium sized category, Commodore is already the leader in large cars. The Monaro could also return as a joint development with Chevy and a new model Camaro. Holden pretty much did most of the work for the first zeta based Camaro. I also want to see a Commodore based SUV and maybe that could become the next Captiva (Holden Captiva 7 in Aus).
Don’t mean badge engineering as such more of a shared development yet still retaining individual identity hence the different names, these models would complement each brands bread & butter models & also provide something different & a little bit special whilst balancing the books on cost.
Really good idea for business but in today’s world with the internet and globalisation, i fear the vehicles may have an identity crisis. Holden also can’t put historic names such as Monaro or Torana on vehicles which they only co-developed or fans will be upset.
Dr Gruen was the architect of the Button Plan, named after the late Labor Senator John Button, the minister for Commerce, Trade and Industry from 1983 to 1993 having been appointed by Prime Minister Bob Hawke.
To prepare the Australian car manufacturing industry for impending cuts to import tariffs the Button Plan forced Holden, Toyota and Nissan to share locally-made cars and rationalise the number of models made from 13 to six.
The Button Plan, drafted in 1983, came into effect in 1984 and continued until 1997.
Over the 13 years it saw Holden Commodores badged as Toyotas and Nissan Pulsars and Toyota Corollas badged as Holdens.
The Toyota Camry also briefly was sold as a Holden Apollo and the Ford Falcon ute was sold as a Nissan.
The Button Plan eventually died because car-buyers weren’t fooled by the new badges and preferred the models from the original manufacturers.
Read more: http://www.news.com.au/business/companies/holden-factory-should-be-sold-to-the-chinese-expert/story-fnda1bsz-1226717216719#ixzz2esmkrRWW
Interesting. Seems like the Button plan was a major dis-service to the Australian car buyer as it limited real choice in exchange for an artificial plan to maintain local manufacturing.