Holden Australia hit by Pontiac closure

[Andrew 30]

Will the fatal blow dealt to Pontiac also ultimately kill Holden?

That's the question being debated across the Tasman. The two nameplates are linked by the G8 sedan; this flagship of the Detroit muscle car brand is an Americanised Australian.

When GM killed off Pontiac last week, as part of a slash and burn to avoid bankruptcy, it also destroyed a deal that accounted for two-thirds of Holden's exports - and a third of its total production - last year. Ouch!

Take away the brash badge, some restyling touches and the obvious control layout differences and the G8 becomes at New Zealand's favourite large car, the Holden Commodore.

G could stand for 'gold.' Holden sought to export 30,000 of the cars to the US each year, helping boost export revenue by $NZ1.3 billion dollars.

That Stateside demand has severely lessened since the credit crunch began - as many as 14,000 G8s delivered to the United States and Canada are reportedly still in showrooms - hasn't really mattered to Melbourne.

Every car that left the Elizabeth assembly plant near Adelaide still put dollars - in the form on export credits - into Holden's piggybank.

The tap is soon to be turned off. The last G8 will roll out of the South Australia factory before the end of the year. Then what?

Well, then, Holden starts to hurt. And bad. Without a significant export programme, Commodore struggles to be a goer in economic terms.

So, what kind of deals might make up for losing the Yankee lifeline? It's not looking great.

There's talk of Holden being able to do a deal with the Los Angeles Police, to import G8-based squad cars, badged as Chevrolets (Holdens are sold in the Middle East are also Chevs).

Some say this opens up the possibility of a civilian version being made available, though talk is that Holden might also on-sell its police special to the Middle East, Canada and perhaps even the United Kingdom.

But it's early days and there are obvious impediments. For instance, with GM closing several US plants and laying off 30,000 workers, importing cars from Australia is unlikely to go down well with the unions, who are expected to be major shareholders in the restructured company.

Another idea, touted by Britain's Autocar magazine, sees Holden standing for Opel as a supplier of small cars to the UK, should GM cut ties with its long-standing German auxiliary. How about a diesel Commodore? Some now say it's possible. But nothing's sorted.

What is clear is that, without a big export contract of some kind, Holden's task of staying alive has become much more difficult. Last week it quickly moved to assure it has no plans to cut production or jobs at the plant, but that's hardly the big issue.

The great fear is that Commodore will become an orphan within GM, built almost wholly for Australians and around 4000 Kiwis.

That simply does not make sense in GM's new global strategy, all the moreso since demand for the car has already begun to slip in its 'home' markets. As much as Kiwis still like big Aussie cars, fact is we're not buying as many now as we used to. Commodore is still the No.2 seller, but the market has shrunk dramatically.

Three big issues have been pointed out.

The first, commentator Philip King wrote in The Australian newspaper, is straightforward: Lost volume.

"Without those 36,500 cars - and with demand for its locally built models down 22 percent this year in Australia - Elizabeth faces the prospect of more down-days and redundancies."

Yes, Commodores are rebadged and sent to a wide variety of overseas markets. But the other important destination, the Middle East, is going soft. Shipments to North America were supposed to make up the difference.

"Last year, Pontiac G8s were 67 percent of Holden's exports. Without the G8, Holden will be left to send crumbs to a scattering of markets around the globe, ranging from New Zealand to Brazil to Korea," noted King, adding dryly: "It's not a recipe for success."

Losing Pontiac also casts doubt on Holden's destiny within GM. Without it, King and others fear, GM will have little use for what its Australian outpost does best - engineering and supplying large, rear-drive performance cars.

It's a complete u-turn on a few years ago, when Holden seemed comfortably-placed as GM's global rear-drive specialist, even though its first attempt to woo the world didn't go down well.

The Monaro was sent across the Tasman to revive that quintessential US muscle coupe, the Pontiac GTO. Yanks didn't take to it. They've been a lot keener on the more recent Camaro, which ironically is an American car finessed in Australia, by Holden engineers.

Even though it hasn't sold as strongly as Pontiac would have liked, the G8 has been well-received by American car enthusiasts, albeit moreso in LS3 V8 form than with the alternate entry V6. Car and Driver celebrated it as "a four-door Corvette" (Car and Driver) and Edmonds.com called it "a beast."

So why didn't it sell better? Poor marketing may be one factor, but an even bigger one is the reluctance of cash-strapped Americans to buy any new car at the moment.

Holden, of course, will next year start building a hatchback version of small car, the Cruze, alongside the Commodore. But this project will hardly present the same opportunities.

It's an Australian adaptation of a new GM world car - Cruze is destined to sell all around the globe, wearing badges most regionally relevant - so provides little associated engineering work. And the export plan seems to only include New Zealand.

A Cruze sedan, sourced from South Korea, will go on sale here in July in 1.8-litre petrol and 2.0-litre diesel form.

From article: http://nz.sports.yahoo.com/blogs/post/-/ri...bosselman/331/1

[Grant 4]

I see the odd G8 (SS VE Commodore) around. About 4 months ago there was a massive marketing offensive for it, but since GM has been on the skids, I have not seen a advert for the G8 for ages.

I always thought that they were pretty good buying, probably cheaper to buy one here, than buying one in NZ.

In the adverts here they always compared it to the the BMW 550i...so that is where they aimed it.

I hope that however GM survives, and what ever brands they decide to keep that they just migrate the SS VE Commodore across to one of the surviving brands (such as Caddy).

Cheers

Grant

[Apex 693]

I see the odd G8 (SS VE Commodore) around. About 4 months ago there was a massive marketing offensive for it, but since GM has been on the skids, I have not seen a advert for the G8 for ages.

I always thought that they were pretty good buying, probably cheaper to buy one here, than buying one in NZ.

In the adverts here they always compared it to the the BMW 550i...so that is where they aimed it.

I hope that however GM survives, and what ever brands they decide to keep that they just migrate the SS VE Commodore across to one of the surviving brands (such as Caddy).

Cheers

Grant

But Cadillac already has a large car. The VE could defiantly be labelled as a cut price five series.

On the upside, at least they had the opportunity to build the VE in the first place, without GM America’s input Commodores would most likely still be VT based.

I think we will be offered Commodores built on the VE until they become extinct in the next ten years.

[elmarco 56]

Lot of words of wisdom in that article. While the VE could be a great car for the US market, pinning their hopes on the Police vehicle deal is tantamount to wishing on a star... Be great to see it in Chevrolet badges as they do have a good range for that - where under Pontiac the ute was a bit of an oddball as it was with GMC. They scotched it as an El Camino a couple of years back because of the Pontiac tie up - maybe this will free them up a bit.

Sadly, unless things pick up for them I would expect Holden (as a local manufacturer) to become another casualty although not likely in the next couple of years (more like the 10 Graham has suggested). Lets hope that at least some cards fall their way in the next couple of years as it would be an incredible loss to Australasian manufacturing if they were to fold as a manufacturer.

Interestingly, I was reading today that FIAT are kicking the tyres of Saab, Opel and Vauxhall. They picked up Chrysler for a steal, and now sniffing around some other brands. If that were to go ahead, I believe it would make them 2nd in volume worldwide to Toyota. Interesting times indeed....

[topcat 11]

It is interesting that FIAT is doing anything at all.

didnt they also come close to 'falling over' as such,a couple of years back?

I guess they made a big comeback in a very few years.

wish i could do that

[elmarco 56]

Yes - they were right on the brink back in about 2002 if I remember correctly. And GM had a reasonable stake in FIAT back in 2000, with a "put option" where they had the option to sell the company to GM (at market rates). If GM baulked, then there was a $2 billion USD penalty - which GM ultimately paid. Bet they can taste the irony at 1 Renaisance Centre (GM HQ).

Just shows what some vision and good management can do for a car company. Zero to hero in 5 or so years.

The worm has turned, and is now packing an Uzi....

[darkwolf 0]

I can just imagine a Chevrolet 599...

No wait... I can't

[Apex 693]

Google ZR1. Will eat a 599.

Fiat are still broke.

[bradc 0]

If I was an exec at Holden I'd be over at Daewoo trying to get them buy more commodores and push them big into china and the rest of asia as taxi's, as well as chatting up chevy trying to get them to call it a Chevy and import it into the states and canada.

[Apex 693]

Interesting, you had me at hello..

Anyway, way off topic.

I see Holden are pushing the VE badged as Chevy as a replacement for the Chevy Caprice Patrol cars at this year’s Police Expo Convention thing, apparently the American Police Force buy 70,000 cars a year and Holden want in on that action, each region department get to chose from a huge range of cars. Would be cool if they used the same light systems as NZ & Australia as they are made in NZ.

[Grant 4]

Interesting, you had me at hello..

Anyway, way off topic.

I see Holden are pushing the VE badged as Chevy as a replacement for the Chevy Caprice Patrol cars at this year’s Police Expo Convention thing, apparently the American Police Force buy 70,000 cars a year and Holden want in on that action, each region department get to chose from a huge range of cars. Would be cool if they used the same light systems as NZ & Australia as they are made in NZ.

I've never seen a Chevy Caprice police car here, I have only seen Ford Crown Victoria's (90%) and Dodge Chargers (10%).

I spoke to the Police Officers who came to take statements when our number plates got stolen last year, and they said that they are struggling to find replacements for the Crown Victoria's (which Ford are no longer making) as the real issue was finding a car with sufficient trunk space for all of the crap they cart around.

I'm not sure what the Commodore's trunk space is like, but I know that they are not happy with the Chargers.

They have pretty simple criteria - 4 door sedan, V8, RWD with massive trunk.

Edit: I have seen a few SUV Police Cars in the mountains, and a couple of Chevy Impala's in the city.

Cheers

Grant

Edited October 22, 2009 by Grant

[elmarco 56]

The Crown Victoria is being phased out of production in the very near future and not being replaced by Ford - which has created a opportunity for Holden. From reports I've read, Holden have actually listened to what the customers were asking for and the Caprice based vehicle hits the sweet spot. Guess they need the full 3 whore trunk for all the armourment....

http://www.goauto.com.au/mellor/mellor.nsf...A257647002685A6

http://www.goauto.com.au/mellor/mellor.nsf...A25764600253D2B

[Apex 693]

That would be the one then Grant, I read Holden are fitting an extra battery in the boot for charging Tazzers

Different states have different cars.

[Grant 4]

I was thinking about this as I was driving in on the freeway this morning, and the more I thought, the more the Holden Commodore makes sense as a Police car here.

There are actually very few V8 RWD, suitable sedans around here anymore.

I estimate that 60 - 70% of cars on the road here are the same japanese, 4 door, FWD, 4 or 6 cyl cars we have in NZ.

In fact the new big Ford sedan (the new Taurus) doesn't even come in a V8 anymore, it is either a 3.5l V6, or a turbocharged 3.5l V6. I also think that it is a fantastic looking sedan (as most of the new Fords are here).

Cheers

Grant

[elmarco 56]

Australia is sounding more redneck by the day...