Holden Chief Admits Brand Is In Rough State
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Holden has had the enormous task of reinventing itself after decades of local manufacturing and homegrown nameplates. In 2015, Mark Bernhard was selected to take on the task. Thus far, though, things have been rather bleak.
Bernhard, who is chairman and managing director of Holden, sat down with Motoring for an interview published last Saturday and admitted the company needs to do more.
“We’re tracking behind where we want to be. I don’t want to tell you how far,” Bernhard said.
Holden has tried to reposition the brand as a Volkswagen alternative of sorts, and in the process, begun to turn its back on some loyal customers. The brand chased younger, more affluent Australians, but things have backfired. Per the report, Holden has some 12,000 cars unsold at dealerships with more vehicles on the way. It poses a massive inventory problem for Bernhard.
Meanwhile, the Holden Equinox has failed to take off as many executives believed it would. Bernhard believes the new nameplate requires more time on the market to garner attention. The ZB Commodore also hasn’t gained much traction, though the Holden chief said the company never expected it to sell in numbers like previous, locally-made cars.
Still, with a wide portfolio of vehicles, Holden market share hovers around 5 percent. Bernhard previously said the brand’s share wouldn’t fall below 8 percent. And the executive believes in the full portfolio of cars for Australia. He said there are no plans to take Ford’s approach and focus solely on the pickups and SUVs.
Overall, it’s clear Holden isn’t on the path many thought the brand would be on by now. But Bernhard remained confident after hinting at future plans in place for 2019 and 2020.
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Transforming Holden into a VW rival was doomed from day one.
Upwardly mobile young adults will never see Holden as more than a red neck racer brand. At best Holden was capable of benchmarking against Kia, possibly Mazda, had more Buick content been used.
Holden’s best bet going forward would be using GMC CUVs plus a small Buick-based car line up. This creates a better value proposition. Holden, like all GM brands, is damaged
An entire new plan is required. Firstly, rename Holden Chevrolet and import red neck vehicles – problem gone! And besides who would want to mirror themselves on VW – damaged brand from emission cheating and executives lying.
“And besides who would want to mirror themselves on VW ”
Here’s something I guess what “who would want to mirror themselves on VW” would want: smart-looking and well-packaged European passenger’s car with reasonable price. That’s the reason many South Koreans bought tons of VW Golfs and BMW 3 series recently. My estimation is, they could expected that many people who like “smart-looking and well-packaged European passenger’s car with reasonable price” are existing in Aussie.
Maybe, it serms like Holden branding wasn’t enough to match it, or they’d done some mistakes in marketing(which is so bad that many could doubt GM about making their own reasons to withdraw from Australia entirely).
Remember the Torana? Particularly the LJ XU-1. Lovely. GM should just do the same thing again. When Lansing is finished with the current Alpha-chassis tooling, just ship it out to Elizabeth South Australia and get the plant rolling again building Alpha Torana’s. Use the Caddy ATS bodies, Camaro V6’s and V8’s, and vinyl interiors, sell them for AU$70K and up.
Vinyl interiors! Well, vinyl is making a comeback after all. No…. wait…. that’s Vinyl records, not car interiors!
Yeah I do remember them. They were considered pretty ordinary at the time.
A few years ago they talked about the product portfolio being refreshed with 24 new models by 2020. From what I can see all the mainstream models they have left to launch is the Acadia which launches later this year. This is not going to add much volume for them.
They already have launched the Equinox and refreshed the Astra and Colorado. These three models represent the biggest segments in the country at the moment. If this is it then this is the product that Holden has to work with. It comes down to marketing then.
I haven’t seen any discussions of new or refreshed models after the Acadia. In the not too distant future they are likely to lose access to Opel supplied vehicles and the problems in GM South Korea must be unsettling as well.
GM keep talking about the Holden brand now being able to “Cherry pick” the best from what the GM world has to offer, but it seems like there are only a couple of small branches on that cherry tree for them to pick from.
Don’t forget the Holden/Walkinshaw sub-brand HSV which is marketing a performance Colorado and right hand drive conversion Camaros and Silverados. These will all hit the market sometime in 2019.
Thanks. I haven’t forgotten them. However, these aren’t mainstream or high volume products. They will only make a very small impact on sales numbers.
it seems loyalty has played a big part here. The Holden Commodore was a well built Australian car made by us. It made Holden buyers proud and encouraged them to buy other Holden branded cars even though they weren’t made here. Once Holden stopped manufacturing in Australia all bets were off and they became just another brand in the mix. What did GM expect?
Now here’s a thought. Instead of reconfiguring production lines in the US for low volume RHD cars make Australia the place where that is done then ship them from here. The majority of RHD countries are closer to Australia and the currency is favourable. We even have an idle production facility. But that would take need government support and a politician who cares would need to be involved.
Don’t forget the labor costs in Oz are about twice what they are in China, and as far as I’m aware there aren’t any unions trying to hold the company owners to ransom (think: South Korea). I think China wins on costs alone.
Down voters completely missing the point ~ not business minded. Business will always gravitate to lowering their costs of production – it’s not socialism!!!
Remember GM is in business to make money, not lose it.
But also let’s not forget that labour costs are probably no more than 5% of a car’s total manufactured cost and often less. Factor in the cost of shipping a car from China, import tariffs (where applicable), working capital tied up in stock, increased lead times… and suddenly, that cheap, Chinese labour can actually work out surprisingly expensive.
I work in a very different industry to automotive. However, it’s interesting to watch production which was offshore to China a decade or so, being brought back home to the UK because it’s actually cheaper to manufacture in the UK than in China… despite the average British wage being a multiple of the average Chinese wage.
I am convinced that GM is trying to avoid retooling costs and the manufacturing of, say, Cruze, for such a tiny market.
Even with shipping costs it makes sense to only run one factory as opposed to three.
I see GM producing the bulk of non US autos in China. This move will speed up the end of Holden and Barra knows it.
i give the 5-10 years before they’re gone
Overall, it’s clear Holden isn’t on the path many thought the brand would be on by now”
SORRY. This is exactly the path many thought it would be on. You threw away brand loyalty like it was nothing. You ‘Cherry Pick’ the GM Products – well I guess those GM products are not what we want. I can’t (and never will) afford your V8 model – the Camaro. You have priced it beyond anything I can’t afford or see as VALUE. That’s fine but in the long run, you are now just another Importer – SO Compete with every other Importer. (but if you give me a V8 Adventurer, all will be forgiven). Thank You
GM doomed Holden. It doesn’t seem like anyone at GM knows what they’re doing with regards to the brand. Their decisions haven’t made any logical sense. Mark Reuss came over from Holden and took a more prominent role at GM. Seems like things started to go downhill afterwards. Could be a genuine coincidence, but still interesting to note.
There are a number of problems, but I’ll focus on the ones that bother me most:
1.) Discontinuing the Australian-built RWD Commodore (the obvious #1)
2.) Building a seemingly random lineup of foreign GM product with Holden badges slapped on
– Astra Hatch and Astra Sportwagon are both Opel/Vauxhall Astras, but the Astra Sedan is a Chevy Cruze?
– Equinox and Acadia, blatant badge swaps of a Chevrolet and GMC and similar in size to one another, being sold alongside the Captiva, which is also similar in size
– Barina, Spark and Trax are Chevrolets
– Commodore and Commodore Tourer are both Opel/Vauxhall Insignias
– Holden Colorado isn’t like ours, and the Trailblazer is like nothing we have here. Both stand out to me in Holden’s lineup, above everything else. Holden’s unique offerings.
3.) Abandoning history and model familiarity entirely (Commodore name only sticking around because the suits thought they could get away with it)
I actually don’t have a huge problem with sharing cars across continents…when it’s done right. My biggest issue with Holden is the brand lacks identity. You can see identity when you look at a Ford or Chevrolet lineup, but Holden is a mish mash of separate identities. Even though Buick doesn’t have an entirely American-made and designed lineup of vehicles, you can still see a clear identity. The Cascada and Regal both “belong”. They don’t seem out of place, from a design standpoint at least. Even the Chevrolet SS, a now former Holden Commodore, “fit” in their lineup. It never seemed out of place.
In America, the Chevrolet lineup of CUVs and SUVs makes sense. In order by size, we currently have the Trax, Equinox, Traverse and Tahoe/Suburban. Each fits clearly into its own class and makes sense. Holden has the Trax, three CUVs very similar in size, then the Trailblazer. Why? GM would never sell the Acadia and Equinox under the same brand here. Why in Australia?
What also doesn’t make sense to me is Holden completely abandoning their history and model familiarity. If properly planned beforehand, they could have had a Torana and Commodore on the Alpha platform, and Caprice on Omega. Hell, you could have imported our Impala as a Caprice. Or the LaCrosse, which might make more sense from a design standpoint, falling more in line with two of the Astras and the Commodore. You could have had an Alpha-based Monaro and Ute. But nope! Let’s kill everything our customers and Australians in general have been familiar with, and instead let’s introduce the forgettable Malibu for a few years, never to be seen again, and bring in a number of new names these people have never heard of.
For anyone wanting to say “fuel economy” played a role in not implementing new RWD vehicles, listen to this: The Commodore and Cadillac ATS have the same city fuel economy rating, while the Holden only bests the Caddy by a single MPG in highway and average driving. The Impala 2.5L I4, the most efficient Impala, is rated at 22/25/30 (city/avg/hwy). The most efficient CT6, with the same 2.0L engine from the Commodore and ATS? 22/25/30. Let’s look at the 3.6L N/A V6 Impala vs. the 3.6L N/A V6 CT6: 19/22/28 vs. 18/21/27. The Impala only has a single MPG advantage across the board. And keep in mind, that CT6 has AWD as standard equipment. (and yes, I know I’m using EPA ratings for all of this) So no, there’s no excuse when it comes to fuel economy. And in terms of price, you can easily build cheaper Alpha and Omega-based cars to fall in line with existing and former pricing strategies of Holden vehicles. We can sit here talking about profit margins etc. until our fingers bleed as we peck away at our keyboards, both physical and digital, all day. But let me ask this: how are those profit margins looking now? How is the company looking now? And how to people view this company? Exactly.
It’s like you think the Mad Monk Toxic Tony Abbott never existed. The guy got elected as Prime Minister and then told GM to “Get [Shirtfronted]”. He got elected saying he would sustain promised funding to Holden, and then within weeks he pulled the rug and blamed a woman (Gillard), as was his usual style.
And now, years later, we all blame GM product plannners who were told lie after lie after lie by the government’s we elected.
NOT GM’s FAULT. They genuinely tried harder than any other corporation to be good for Australia. Seriously, thanks for 1948-2017. Just like I say thanks to FDR for sending MacArthur to save us in Guadalcanal and Coral Sea. Another gigantic assist from the great USA that we conveniently never remember.
Look at the Banking Royal Commission showing how offshore financiers rip us off every day. The Child Abuse Royal Commission showed us what international religions have done to our kids.
And GM? Zero crime, zero exploitation, low-ish environmental damage considering what could have happened, and serious efforts to clean up when they were found less-than-perfect. Meanwhile they promoted Aussies into extreme high positions like Simcoe, brought international greats like Hanenberger (He made FEIII great suspension) to Australia, and gave Aussie kids the chance to grow as engineers and become great, like Chris Dyer engineering Schu at Ferrari, after a couple of years making Lowndes and Skaife fast at HRT.
Seriously, thanks GM.
Just on this detail: “Astra Hatch and Astra Sportwagon are both Opel/Vauxhall Astras, but the Astra Sedan is a Chevy Cruze?”
While Opel had developed an Astra Sedan of the previous generation (Astra J), mainly for the Russian market, they did not for the Astra K, the current generation. Shanghai GM on the other hand did, as Buick Verano or Excelle (I did not understand the fine differences between the two).
So, while the Holden Astra Hatchback and the Holden Astra wagon are being imported from Opel factories in Poland and England respectively, the sedan would have to be imported from China, with a special version to be developed for Australia and New Zealand. Since the Cruze based on the same D2XX platform was available as an international model, that was probably considered to be the more economically sound import.
It seems that the timing of ending production in Australia and switching from Australian designed Commodore to German designed ZB Commodore at the same time and as one act was a PR desaster. BTW, the old Australian Commodore, introduced in 1978 as VB Commodore (replacing the HZ Kingswood) is based on the Opel Commodore C ( https://en.wikipedia.org/wiki/Opel_Commodore#Commodore_C ).
GM should have aligned Holden’s portfolio with the international lineup without coupling this with terminating production in Australia.
Well, IMHO, GM has never really managed their broad international collection of brands. They were far too long too much independent of each other, as “divisions” in the USA and as individual brands outside.
There was always a slight problem with Holden trying to become another Volkswagen. There already is one Volkswagen; I’ve never heard anyone ask for another.