Huge clues behind Holden bombshell
Australia's car lovers are reeling from the news the iconic Holden brand will disappear from dealerships by year's end.
But while the bombshell revelation that parent company General Motors (GM) was pulling the pin on the Aussie market has devastated fans, industry insiders say the writing had been on the wall for years.
In fact, there have been a number of huge, glaring clues that the withdrawal was not only on the cards, but inevitable.
Late last year the company announced it would stop selling its most iconic car, the Commodore, and by that point local manufacturing was also long gone after ceasing back in 2017.
RMIT College of Business professor of marketing Francis Farrelly told news.com.au Holden's withdrawal had been in the works for some time due to a "perfect storm" of conditions.
Professor Farrelly, who has just completed research into the disruption of the car industry, told news.com.au it was a "sad' but "somewhat expected" outcome.
"A whole range of factors have led to the decision to withdraw the Holden brand, but I think one of them is that major manufacturers including GM have invested so much now … in the future of electric, so in small markets like Australia with small vehicle sales, it was becoming increasingly difficult to justify it from a business point of view," he said.
"It also doesn't come as a complete surprise because the brand had been decimated for a while now, even dating back to the global financial crisis when GM made it clear it was not adding many models to the line up."
Prof Farrelly said in recent years, consumers had been turning away from "Australian" brands and opting for European and more recently Asian players instead, and that while there was the perception that Holden was an iconic brand, it did not translate into sales.
"For the last 20 years or so consumers have been (increasingly) buying European brands even before the influx of Asian brands, so more people had access to and were preferencing those brands, which made it very difficult (for Holden)," he said.
"It carries such patriotic Australian positioning but it has dropped over the last 20 years compared with its heyday when one in every two cars was a Holden.
"It has been a fairly dramatic decline and they got to the point where they couldn't justify continuing in this form."
According to Tim Robson, the editor of automotive publication WhichCar, one of the major factors behind Holden's demise was GM's decision to turn away from the right-hand-drive market.
In a nutshell, in right-hand-drive vehicles, the steering wheel is located on the right-hand side of the car with the driver sitting closest to the centre of the road.
It's the system we use in Australia, because we drive on the left-hand side of the road - but globally, we're in the clear minority, meaning for GM, producing right-hand drive vehicles was no longer an attractive option.
"General Motors, Holden's parent company, has been making its exit from right-hand-drive markets for a couple of years now, so there has been a global decision to batten down the hatches in case of another global financial meltdown, and there has also been a move towards electric vehicles in a big way - so simply put, it was just not viable to produce right hand drive vehicles for a small market like Australia," he said.
"It is an incredibly iconic brand - one of the best loved and best known brands in the country - and while it's not a surprise to industry insiders, it will definitely be a culture shock to see it disappear."
But he said the Holden brand and in particular the Holden Commodore was a "cultural icon" most of us never thought would "disappear".
DROP IN SALES
ACA Research account director Ben Selwyn also blamed the right-hand-drive decision which meant pulling out of Australia was a "money saving option" for GM - but said declining sales was also a major factor.
"Looking back … there were rumours Holden was going to pull out at different times and suggestions that conversations were happening with dealers not renewing their franchise agreements and that sort of thing - but the biggest and most obvious factor was they were just not selling cars," he said.
"Sales have been trending down and in the back end of last year (Holden) was outside the top 10 when it came to monthly sales which is obviously a significant way from when they used to sit in the top two or three."
Mr Selwyn said the brand was also impacted by a reduced range following the decision to "pull the pin" on the famous Holden Commodore and Astra models.
"They weren't competitive enough with what we were seeing in the market - for example the SUV line up in Australia is so competitive that if you get left behind, it's hard to catch up," he said.
"It will probably be quite confronting to Australian consumers because Holden is one of those iconic brands but while you might look at brands like that and assume they will always continue to exist, ultimately, people didn't like the product."
Mr Selwyn said there were also "macro" factors at play such as consumers buying fewer full-size sedans.
"I think people outside the auto industry will be quite shocked, but those within saw a lot of signs this was coming.
WHAT DOES IT MEAN FOR YOU?
News.com.au understands that while there are about 200 Holden dealerships across the country, less than 20 were specific stand-alone Holden businesses, meaning the vast majority also sold other brands and would likely ride out the storm.
Speaking at a media conference today, executives confirmed the company would "continue to support existing Holden customers" in terms of "warranties, spare parts and recalls" for "at least the next 10 years".
An audibly anguished GM international operations senior vice president Julian Blissett and GM Holden interim chairman and managing director Kristian Aquilina both stressed the "agonising decision" had not been made lightly and that the "tough day" came only after "exhausting" other options.
Australians have shared their shock and heartbreak over Holden's demise on social media, although many said they weren't surprised by the decision.
"This was sadly inevitable … *sigh*," one Twitter user wrote, while another said it was "very sad" and "the end of an era".
"So what will happen to the Holden Dealer network Australia wide, surely most of these will have to close? Many jobs will be lost," one said, while another claimed: "GM abandoned #Holden many years ago. They lived off Australia's home brand loyalty while slowly white anting it. Finally a modicum of truth appears as they jettison the only remnant - the name 'Holden'."
"Holden in Australia is as synonymous as Vegemite. It's being killed by a head office thousands of KMs away who never understood the importance of the brand," one social media user posted, while another added: "I am so shocked at this news. Not that I am a #Holden driver, Australia will not be the same without #Holden."