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End of the road for Holden

So it’s come to this: Seventy-two years of Australian motoring history has ended with General Motors’ announcement that Holden will be no more at the end of this year. Gone forever.

For older Australians it seems almost unimaginable. Holdens have been a part of the fabric of Australian life for decades. So much so that back in 1976 an advertising jingle that went “football, meat pies, kangaroos and Holden cars” was filling the airwaves. Australian families were defined by whether they were Holden or Ford loyalists, a rivalry that reached its crescendo each October at Bathurst, where flag-waving fans cheered on their heroes.

Today Australia has one of the most competitive car markets in the world, with vehicles from Europe, America, Japan, Korea and China all jostling for position in the sales race. We even have Japanese utes that are built in Thailand. But in the early days of Australian motoring it was all very different. Holden and Ford dominated the market.

General Motors Holden’s first all-Australian car, the 48-215, or FX, rolled off the production line in 1948 to great fanfare. By 1954 one in every three cars on the road was a Holden. The HQ Kingswood ruled the roads from 1971 to 1974 with 485,650 produced. It was the company’s biggest seller. Holden’s 3 millionth car was an HQ Kingswood. It even spawned a TV show, Kingswood Country, whose “hero”, Ted Bullpit, was famous for uttering such gems as “you’re not taking the Kingswood, I’ve just shampooed the mudflaps!”

Rapid fall

The Holden Commodore was still Australia’s top selling car as recently as 2010 and had held first position for a record 15 years, but from there it was all downhill for Holden. Sales fell rapidly and by 2017 Holden had ceased Australian production, joining Toyota and Ford. Those Australian vehicle manufacturers had long been propped-up by billions of dollars’ worth of government subsidies. When the government finally called a halt to that taxpayer-funded largesse the business model for Australian car production was effectively busted.

From then on, all Holdens were just imported vehicles with a Holden badge. Any remaining brand loyalty had long gone and by September 2019 Holden’s sales hit an all-time low of just 2863 for the month. That was 38 per cent lower than the same month the year before and was a disastrous result for the company even in the context of declining sales across the new vehicle market.

Right hand drive

Holden’s demise has been brought about by declining sales and General Motors’ curious decision to abandon the right-hand drive market globally. That includes not only Australia, but countries with markets as large and lucrative as the UK, Japan, India and South Africa. Having already abandoned those markets Thailand, Australia and New Zealand were the only ones left for GM. The cost of developing right hand drive vehicles for such small markets was prohibitive.

Globally just 25 per cent of vehicles are right-hand drive and the cost of producing them makes them less profitable for vehicle makers because there’s less opportunity to recoup their development cost because of lower sales volumes. The withdrawal of a major manufacturer like General Motors reduces choice in right hand drive markets the world over.

The Holden name will disappear by the end of the year, but General Motors will honour its service and warranty commitments for up to 10 years with a workforce of 200 people. That’s a far cry from Holden’s 1960s workforce which peaked at 23,914 across seven manufacturing plants across the nation.

GM’s continued presence

Holden may be automotive history but GM may yet keep a minor presence in Australia supplying niche right hand drive specialty vehicles, such as the Chevrolet Corvette, through its local performance vehicle partner HSV. HSV already converts imported Chevrolet Camaros and Silverado utes to right hand drive before selling them through its dealer network.

“Although it’s not firmed up formally, our intent and our desire is to stay in the market albeit in a different format, a different (business) model,” said GM International Operations senior vice-president Julian Blissett.

Holden’s closure can be seen as a symptom of a rapidly evolving global vehicle industry where Swedish icon Volvo is now Chinese, British-to-the-bootstraps Jaguar and Land Rover are Indian, the Mercedes C-Class is made in South Africa, and Mexico and Thailand are both major vehicle manufacturers. In this brave new motoring world GM is abandoning less profitable international operations and retreating to the US market to concentrate on electrification and autonomous vehicles, according to Gavin Harper, a Faraday Institution research fellow at the University of Birmingham, UK.

Written by
Mark Schneider

Mark is a successful copywriter with over 20 years of professional writing experience.

We welcome him as a guest blogger to Fleettorque.

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