Holden, which was founded 164-years ago (making horse saddles) and has been the Australian branch of General Motors since 1931, is dead.
GM announced this week that Holden will cease to exist at some point in 2021. In their official statement, GM claimed that the investment required to make Holden profitable was simply not worth it. They also cited globalization of the auto industry as a factor, since Holden only really exists in Australia and New Zealand.
“GM has taken this difficult decision after an exhaustive analysis of the investment required for Holden to be competitive for the long term in Australia’s and New Zealand’s new car markets. Regrettably, this assessment determined such an investment could not meet GM’s investment thresholds, including delivering an appropriate return.
“Factors weighing against further investment in Holden included: the highly fragmented right-hand-drive domestic markets; the economics to support growing the brand; and delivering an appropriate return on investment.
“More broadly is the issue of scale. The global consolidation of the automotive industry has made it increasingly challenging to support a brand and a business that operates in only two markets, which represent less than one percent of the global industry.”
These days, building and selling cars within Oceania isn’t really any cheaper than just building them elsewhere and shipping them down under. Although GM didn’t specifically mention this in their statement, this ends their commitment to building right-hand-drive vehicles. They previously stopped making right-hand-drive cars for the British market when they shuttered their Vauxhall brand.
Sales of Holden vehicles have been declining rapidly in recent years. Stock price was also consistently dropping lower and lower. Former chairman David Buttner left the company in December for “personal reasons,” but not it appears he simply didn’t want to go down with the ship.
GM says it will continue to offer service and warranty coverage for Holden vehicles. In fact, they said they will continue to service Holden models for ten more years. Despite that bit of good news, the announcement still means almost 600 workers will be laid off.
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