Barely Holden On
Of all the car brands that exist today, few, if any, are in as much trouble as Holden. Over the past century they have transitioned from saddlery to coach builder to manufacturer to manufacturer/importer. By year's end, they'll be a full importer. Holden's ability to survive hangs on GM not going through with the sale of Opel-Vauxhall, an important source of product for Holden in a future without Australian manufacturing.
Holden has a number of things in common with Opel. They are both regional brands that have been under GM ownership. They have both made losses over the last decade. They've struggled with exports, and they've been used by GM to plug holes in other brands' ranges. Opel has been a source of compact and medium cars for Buick and Holden, and propped up Saturn in the 2000s. They were not allowed to export it's own brand, aside from short lived and under-resourced ventures in the US (1960s) and Australia (2012).Holden has provided Chevrolet with large RWD sedans in the Middle East, Brazil and North America, and built Pontiac's flagship models from 2004 until their 2008 demise. Holden also exported Camira wagons, Monaros and HSV Clubsports and GTSes to the UK as Vauxhalls. The furthest the Holden name ever travelled in significant volumes was New Zealand.
Holden were the new car sales leaders in Australia right from their 1949 debut as a car marque, but lost the lead to Toyota in 2001. Despite solid sales figures from the likes of the Astra and Rodeo/Colorado, they have always been dependent on the locally made Commodore and it's predecessors. At the same time, they have struggled with SUVs. A lack of good quality right hand drive GM SUVs meant making do with the Adventra AWD Commodore wagon, and then the Daewoo-sourced Captiva. With large car sales in free fall, Holden planned to build the next generation Cruze-based Captiva/Equinox alongside the Cruze at Elizabeth, and import the Commodore. When Ford announced that they would end their Australian manufacturing operations, the supplier base for Holden and Toyota was financially squeezed. Shortly after, then-Federal Treasurer Joe Hockey started playing chicken with Holden and Toyota. The business case no longer added up, and Holden announced they would become a full importer from late 2017.
Shortly after announcing that they would be closing Elizabeth, Holden launched a new ad campaign. It went some things along the lines of “we won't be making cars in Australia, but we will still make the best cars for Australia”. To maintain relevance, Holden needs to push that message and show people that they're more than a badge. In order to add substance to it, they'll need to source models from multiple GM brands. We're already seeing that with the European Astra, Cascada and Insignia VXR joining the Commodore and various models from Chevrolet.
Holden is planning to source 30 percent of its model range from Opel. We already have the Astra and Cascada, and the 2018 Commodore will come from Opel. Those three will likely be joined by the Grandland and Omega X SUVs. They will share showroom space with four Chevrolets (Spark, Barina, Trax and Colorado), and a GMC (Acadia). Opel then, will provide the bulk of sales. Without Opel, Holden will have a hard time filling it's range. Opel can also provide cars that Holden can legitimately described as European, something that Australians like. A GM without a European arm will struggle in Australia.
Even without Opel, keeping Holden still allows Chevrolet, Buick and GMC models to be sold under one brand. It's one that people recognise and one that people might actually want to buy. In Australia, Chevrolet is the badge that bogans put on their 90s Commodores. Besides that, Australia has long had an aversion to American cars. Only Jeep, the Mustang and the occasional Chrysler have ever sold well here. It's hard to see Chevrolet doing well here. American cars only work as niche products, beyond the Camaro and Corvette, Chevrolet has nothing to offer. The same can be said for Buick. GMC might work, just as Jeep does, but as an SUV and 4WD-only brand, it won't be able to achieve large sales figures.
One brand issue that they may have is a cultural cringe that makes Australian made cars difficult to sell. This will make life as an importer harder for Holden than Ford or Toyota. But Holden, to most people, would be more desirable than Chevrolet. You don't see many Dodges and Chryslers in Australia. People assume they're rubbish and they're mostly right. The only thing worse than a Dodge Journey is a Holden Captiva. Once the Walter White fantasy wears off, a Chrysler 300 isn't nearly as good as a Holden Calais. Chevy would likely be tarred with the same cheap and nasty brush right from the get go. Once the cars aren't actually made in Australia, the cultural cringe towards Holden will fade and people might just stop questioning their build quality.
Losing the Commodore company image is the biggest issue. Ford are shifting their public image away from the Falcon, and Holden needs to do the same. They already know this. Emphasising the Astra, their second most well known model, would be a good start. The Astra is a very good car and could help facilitate a Mazda-style push upmarket. They also need to improve their SUV offerings, which they will do. In the meantime they have the Captiva and Trax. Holden might be better off dropping the Captiva and relying on the ladder chassis Trailblazer as their sole seven seat SUV for a while. At the very least, they should stop talking about it.
Then there's the Commodore itself. On one hand it's a recognisable name in the medium to large segment. On the other, many loyal customers are offended by the use of the Commodore name on an imported model. The new Commodore will be front or all wheel drive with a turbo four cylinder or NA V6. That doesn't necessarily appeal to traditional Commodore buyers, nor does the name Commodore necessarily appeal to the people who might buy it. Calais or Berlina might have been a better name that provided continuity. Traditional new Commodore buyers might even buy it. They have to drive something after all.
But to avoid haemorrhaging sales to the Kia Stinger, they need a performance sedan The Camaro won't do, at least not for the Police or anyone else needing four doors. The Buick Avenir is a RWD sedan, but it has been ruled out from production.. Buick desperately needs a new performance sedan too. A genuine Commodore SS replacement could also be the next Regal GS. The trouble with that is that the new Insignia/Commodore/Regal’s engine bay won't accommodate a twin turbo V6. What about a supercharger? If Opel can't build it, get HSV to do it. If that doesn't work, do a turbo four cylinder. Ford and AMG have. GM doesn't seem to be concerned about that. They don't get that not all performance buyers want a V8 coupe. Sure a medium sized sports sedan won't sell in huge numbers, but it will get people excited about Holden. Hot hatches are very popular in Australia. We're the world's biggest market for Renaultsport, and GTIs make up a larger proportion of Golf and Polo sales than they do anywhere else. Holden offers Astra VXR, but GM’s currently trying to sell the company that makes it. GM’s apathy towards enthusiasts is hurting Holden and Buick.
Could GM sell Holden? Only if it's included in the Opel/Vauxhall sale and that seems unlikely. PSA has never been all that interested in Australia. There aren't really any other potential buyers. Holden has little to offer to other brands. Holden's future is dependent on GM, and GM needs Holden to sell cars in Australia.
Holden Opel-Vauxhall and Buick's problems are symptomatic of GM’s poor grasp on globalisation. Opel hasn't turned a profit since the 90s, but that doesn't mean they can't. Same goes for Holden. What GM fails to realise is that selling Opel won't reduce their R&D spending. They will still need to develop cars for Buick and Holden, but they'll be doing it without European sales volumes. Without Vauxhall providing RHD demand, Holden might miss out on key models. The deal is even worse for PSA, what would they gain from a Peugeot duplicate?
Australians don't want large sedans anymore, at least not enough to warrant building them here. Anyone could see that. But we are still happy to pay for quality in a way that Americans aren't. More than ever we want performance cars, particularly hot hatches and sports sedans. The Ford Mustang has shown there's a market for two door muscle cars as well. Holden needs what Opel-Vauxhall can deliver, plus a few models from Chevrolet and GMC.
Holden's future relies on more Opels and more exciting Buicks. They need better quality cars and a performance flagship they can put their own name to. If GM can provide these, then they have a bright future. But if they sell Opel-Vauxhall, things will get difficult.