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What the Holden shutdown means for car owners
Holden to close Australian and New Zealand operations: what this means for you
When US-owned General Motors announced it was pulling the plug on its Australian operations, it sent shockwaves through the automotive industry and spelled the end for one of Australia’s most iconic brands. The 160-year-old Holden name, as much a part of our cultural fabric as meat pies, football and kangaroos, will cease to exist as GM is also closing its factory in Thailand, which produces Holden’s Colorado. The closures are expected to cost the US giant around $US1 billion.
But what does all this mean for local Holden owners and devotees?
Holden through the years: VB Commodore, HK ute, VL Commodore, HK Ute, Monaro, VS Commodore, VE Commodore, Colorado.
Exactly when will Holden close?
Most of Holden’s operations will close at the end of June this year, including the design and engineering units. Holden’s Lang Lang proving ground southeast of Melbourne will wind up in August, although GM is yet to announce what will become of the testing facility.
Buyers will still be able to buy a new Holden vehicle until the remaining stock runs out. It is unclear how much stock of each individual model is left in dealerships, with Holden HQ or on ships, but it is believed to be in the thousands. That stock will likely dry up by the end of 2020.
I thought Holden already closed its Australian operations?
Holden closed its Australian manufacturing operations in October 2017 after 69 years of building cars down under. But the brand retained sales and marketing operations, using GM’s extensive global brand catalogue to source models from the United States, Thailand, South Korea and Europe. Holden also operated a highly regarded research and development arm that designed and engineered vehicles for GM globally.
Will I still be able to have my Holden serviced in Australia? What about parts?
Holden says it will provide parts and servicing through its after-sales network for at least 10 years. The network will also take care of any recalls or safety-related issues.
Given the service centres are linked to the dealer network, Holden says it will now work to establish an after-sales network following the closure of the brand. Each of the existing Holden dealers will be offered the opportunity to become an authorised service outlet.
It is unclear how many service centres there will be across the country, so no one is sure how far owners will have to travel to get to their closest one. We recommend keeping an eye on Holden’s social media channels and its website for updates about this.
I own a current-model Holden. What does this mean for my warranty?
Holden says it will honour all warranties and service offers made at the time of sale of the vehicle. So in terms of your warranty, nothing will change. If you bought a Holden recently, check the terms of the warranty. Some models were being offered with a seven-year, unlimited-kilometre warranty and others with seven years’ free scheduled servicing.
Holden's popular VF Commodore II and VB Commodore models.
My Holden is financed through Holden Financial Services. Will that contract remain in place?
Yes, Holden will honour all contracts that buyers took out with Holden Financial Services.
I was considering buying a Holden, but now I’m not sure. What will happen to the value of the car?
You can still buy a Holden until the dealers close their sales operations. There are likely to be good deals on some Holden models until they sell out.
Questions remain about depreciation. Some Australian-built Holden models, such as the VF Commodore, are likely to hold their value better than some of Holden’s imported models. There is demand for the Aussie-built Commodore sedan, wagon and ute, depending on the engine and model grade. For example, a V8-powered SS-V Redline should hold its value well, more so than a base-model V6 sedan. The last VF Commodores rolled off the Elizabeth production line in October 2017, so the last examples are a few years old now.
Other models, including the more recent ZB Commodore, imported from Germany, as well as the Astra hatch, Trax, Equinox and Trailblazer SUVs may not hold their value as well as the Australian-made Commodore. Some of Holden’s more highly regarded models in popular segments, such as the Colorado ute and Acadia large SUV, may hold their value a little better than the others. Check car sales websites for current prices and expected depreciation.
Will Holden still be a part of the Australian Supercars Series?
Holden has a contract to compete in the 2020 Australian Supercars Championship, but its future beyond this year is unclear. Holden executives say they will sit down for discussions with the Supercars organisers in the coming days. The death of the Holden brand would make it very difficult to compete beyond 2020 given there will be no retail presence. Whether GM chooses to be involved with the series through its specialty vehicle business remains to be seen.
Is the Chevrolet Corvette still coming to Australia as planned? And is the Chevrolet Silverado still going to be available?
Holden confirmed last year that it would import the new-generation C8 Chevrolet Corvette high-performance sportscar in 2020/21, with GM committed to producing the vehicle in right-hand-drive (RHD) configuration for Australia and other RHD markets. GM is not saying too much about whether it still plans to build the Corvette in RHD at its Kentucky (US) factory.
However, the company has committed to retaining an Australian brand presence through a GM “specialty vehicle business”. While they are yet to announce plans, they are likely to include Holden Special Vehicles (HSV) which currently converts left-hand-drive North American models such as the Chevrolet Camaro coupe and the Chevrolet Silverado full-size pick-up to right-hand-drive at its Clayton facility.
Then and now: Holden's WB Ute and its top-selling Colorado.
What’s behind the Holden closure?
Holden’s future in Australia and New Zealand has been under a cloud for a while now. Following the closure of its Australian manufacturing operations in Port Melbourne and Elizabeth in South Australia in October 2017, Holden has had double-digit sales declines across its model range. After the factory closed, Holden sourced a new Commodore from GM’s European brand Opel (now owned by Peugeot-Citroen’s French parent company), but its front-drive layout, lack of V8 and the declining interest in passenger cars in favour of SUVs and utes saw sales plummet. Holden discontinued the Commodore, as well as the European-sourced Astra hatch, late last year after continued sales declines.
Other vehicles sourced from GM’s South Korean operations such as the Cruze sedan, Barina and Trax have seen middling sales at best, while the Thai-built Colorado ute – an underrated offering in the competitive pick-up segment – was the company’s best seller by some margin.
The Australian automotive market is widely regarded as the most competitive market in the world, with about 64 brands competing for a relatively small pool of just over one million sales a year. This competitiveness hit Holden harder than many other brands, such as rising Korean car-makers Hyundai and Kia.
Others blame a lack of foresight by previous management at both Holden and GM, including a delay in transitioning from passenger cars into SUVs and rebadging vehicles imported from GM Korea as Daewoos. The release of questionable models such as Captiva and Malibu also dented the brand perception.
In announcing the closure, a clearly emotional GM Holden interim chairman and managing director Kristian Aquilina said GM had looked at every possible option to ensure Holden’s survival. The shift to electrification and the advent of autonomous driving technologies requires significant investment – as all global car manufacturers are currently discovering – and it was an investment GM was unable to realise for Holden.
“We developed an ambitious investment proposal to see Holden flourish in the market, not just survive, but thrive. We chased down every conceivable strategy, we looked under every rock. There were multiple rounds of discussions and we tried to find ways to defy gravity,” he said.
How many employees will be affected?
Holden has about 800 employees in Australia and New Zealand and just under 600 will be without a job by mid-year. Most employees are based in Melbourne. Some will stay on to help with the transition.
The futuristic Holden Hurricane concept car, which was designed in 1969.
What about Holden’s highly regarded research and development operations?
Unfortunately, the design and engineering arm that employs hundreds of talented designers, technicians and engineers will also close. Holden’s Victorian team has developed vehicles for GM’s global portfolio, as well as designing several production and concept models, including the famous 2005 Holden Efijy concept that was inspired by the iconic FJ Holden from 1953.
Many of these functions will be absorbed by GM’s design and engineering operations in other countries, although there is a chance that a small number of employees will be offered positions at other GM R&D operations.
How many dealers are affected? What will happen to them?
Holden has 185 dealers in Australia and 31 in New Zealand. Each has been offered the chance to remain a Holden servicing and aftersales outlet beyond the closure, but they will steadily wind down Holden sales operations as stock runs out. It will be up to individual dealers and dealer groups as to what they do next. Some may close while others will look to replace Holden with another brand. Holden’s dealer numbers have been steadily dwindling over the past five years due to slowing sales.
Will Ford continue to operate in Australia?
Absolutely. Ford experienced a sales downturn when it closed its Australian manufacturing operations in 2016, but it was nowhere near as dramatic as Holden’s slide. Ford also has the benefit of being a global manufacturer with a significant presence in other RHD markets, such as the United Kingdom, so it will continue to have access to RHD product. Ford’s product portfolio was strong at the time of the factory closure and it has only strengthened since then, with high-quality model lines like the Focus, Mustang, Escape and Endura. The Ranger ute is widely regarded as one of the best vehicles in its segment and is the second-best selling vehicle in Australia.