Holden has been relying on government assistance from previous administrations, but the current right-leaning coalition is said to be wavering on any new funding. Meanwhile, GM is said to have come to a final decision regardless of what the government decides.
While the official announcement won’t come until early 2014, it appears to have been a long time coming. High labor costs, declining market share, lower tarrifs on imported vehicles and changing market tastes have all led to a decline in popularity for domestic Australian vehicles like large, rear-drive sedans and Ute pickup trucks, the kind made by Holden and Ford’s now defunct Australian arm.
Imports of Thai-built mid-size pickups and small cars built in South Korea, Japan and elsewhere have taken a bite out of Holden sales. The Commodore, once Australia’s best-selling car, can now barely crack the top 10, despite an acclaimed redesign. Models like the Cruze and Colorado are currently imported from South Korea and Thailand respectively, as local production has been deemed too expensive to be profitable.
The 2016 date is also the expiration for GM’s agreement with the Canadian government over maintaining minimum production levels in Canada. Previous TTAC reports have suggested that Oshawa may be the next plant to go, and given the similarities between Australia and Canada’s economies and automotive sectors, don’t be surprised if GM delivers a one-two punch to both countries.