The Truth About Cars » Holden The Truth About Cars is dedicated to providing candid, unbiased automobile reviews and the latest in auto industry news. Thu, 24 Apr 2014 16:18:16 +0000 en-US hourly 1 The Truth About Cars is dedicated to providing candid, unbiased automobile reviews and the latest in auto industry news. The Truth About Cars no The Truth About Cars (The Truth About Cars) 2006-2009 The Truth About Cars The Truth About Cars is dedicated to providing candid, unbiased automobile reviews and the latest in auto industry news. The Truth About Cars » Holden Analysis: Australia’s Free Trade Deals Are The Final Nail In The Coffin Of Its Auto Industry Tue, 08 Apr 2014 15:35:19 +0000 holden-plant

In the span of 24 hours, Australia inked two free trade agreements with both Japan and South Korea. Even though Holden, Ford and Toyota had already committed to ending auto manufacturing in Australia, it’s hard not to see the agreements as the last nail in the coffin of Australia’s once strong auto industry.

Although North American perception of Australia’s car market is one composed of big, rear-drive V8 sedans and Utes, that image is largely a construct in the minds of enthusiasts. The real picture is a lot less sexy.

Australia’s market is both unique and remarkably mundane. At around 1 million units annually, Australia’s new car market is a mere fraction of the United States – but it’s also far more competitive, with roughly 60 brands competing for a very small pie.

In past decades, the local auto manufacturing industry was heavily protected by tariffs, which encouraged a thriving domestic auto manufacturing industry. Holden and Ford ruled the roost, while Chrysler enjoyed a brief run of localized cars. Later on, companies like Mitsubishi, Nissan and Toyota joined the fray, establishing themselves as the favored Japanese brands.

But in 1983, the Button Plan radically changed the automotive landscape in Australia. The chief goal of the Button Plan was to consolidate the domestic auto industry by halving the number of model produced, while also looking to reduce tariffs and import quotas. The overall goal was to foster a more competitive, export-focused Australian car industry through increased competition.

In the immediate term, a number of badge engineered domestic models appeared in the showrooms of Japanese brands, but none sold particularly well. For a long time, traditional Australia vehicles like large sedans and Utes reigned supreme. But the past decade has seen a major shift in the automotive market, with rapidly changing tastes.

Much like their cousins in the United States, Australia’s traditional vehicles – large sedans and Utes – are facing a two-fronted war, and the outcome has all but been decided.

A report by Ward’s Auto shows that in 2003, large sedans (which ostensibly includes not just the Holden Commodore and Ford Falcon, but also front-drive entrants from Toyota and Mitsubishi) were the most popular cars in Australia, with 26 percent market share. A decade later, that number has fallen to just 7.6 percent.

Small cars and SUVs have overtaken the large car as the most popular segments in Australia. Rising fuel prices, shifting market tastes and a greater selection of small cars have helped propel vehicles like the Holden Cruze, Mazda3, Hyundai i30 to the top of the sales charts – to say nothing of the Toyota Corolla, which was Australia’s best-selling car in 2013.

At the other end of the spectrum, SUVs, crossovers and mid-size pickup trucks have eroded the large sedan’s domain as the family car of choice, with Ward’s reporting that one fifth of buyers are opting for mid-size or large SUVs. The Toyota HiLux was Australia’s best-selling truck in 2013, as sales of mid-size trucks (including Holden’s popular Colorado) helped dampen enthusiasm for Utes.

Beyond the lack of enthusiasm for traditional vehicles, the importance of Australian pedigree is on the wave. As Ward’s reports, the preference for Australian-made vehicles has declined substantially from over a quarter of new buyers in 2003, to roughly one eighth in 2013. Last year marked the first time that the three most popular brands in monthly sales rankings (Toyota, Mazda, Nissan) were all imports.

With a changing climate regarding imported vehicles, the FTAs with both Japan and South Korea will only reduce the cost of vehicles that Australian consumers are already gravitating to. While the FTA with Thailand arguably served as the catalyst for Australia’s major market shift towards Thai-built trucks and certain passenger cars, other factors, like a strong Australian dollar, high manufacturing costs and limited export demand for Australian cars (despite the protestations of enthusiasts across the internet) did their part in bringing about the inevitable end to Australia’s auto industry. The Japanese and South Korean FTAs won’t do any more harm to an industry on death row. But it’s impossible to ignore their symbolism in the wake of the Australian car industry’s annus horribilis.


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GM Korea May Increase Exports To Australia Fri, 07 Mar 2014 17:52:32 +0000 Holden Cruze

As Chevrolet slowly exits from the European market while Holden exits the production line altogether, General Motors is mulling over increasing exports to Australia out of South Korea.

Bloomberg reports the increase in exports is compensation for GM Korea losing as much as 15 percent to 20 percent of its production volume when Chevrolet closes the door on Europe at the end of 2015, and is roughly the same volume needed to fill the showroom floors in Australia while Holden winds down local production — and possibly itself — by 2017.

The Chevrolet experiment ultimately lost General Motors “millions” of dollars according to GM Korea CEO Sergio Rocha, though he expects the Australian market will more than make up for it:

With this money that we call ‘loss avoidance,’ I’m going to have a lot of money in the next couple of years that we can invest in new products to be competitive in the local market and for exports as well.

Meanwhile, GM will focus on Vauxhall and Opel vehicles in their native markets, with Opel also providing select vehicles to the Australian market, beginning with the Cascada convertible.

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Opel Cascada Leading Brand’s Return To Australia Thu, 06 Mar 2014 13:30:41 +0000 Opel_Cascada_Innovation_2.0_BiTurbo_CDTI

Though the local auto industry in Australia is slowly drawing to a close, a few Opels will soon be found in Holden showrooms, beginning with the Cascada convertible.

Carsguide reports Holden dealers were told in a briefing to make room for the convertible on their sales floors, as well as to expect more Opels to arrive in the future. Though nothing more was said about which Opels were to follow, News Corp Australia believes the Astra could be the next in line, sold alongside the locally produced Cruze until the end of all local production in 2017.

The Cascada’s arrival to the Australian market comes after Opel as a brand left the continent in August 2013, where 20 dealerships were folded and 15 office staff based in Melbourne were dismissed due to poor sales; prior to the experiment, Opel sold their cars with Holden badges in the 1990s through the early 2000s.

Opel’s return is part of a strategy by General Motors president and New Zealand native Dan Ammann to reaffirm his employer’s commitment to the Australian market, and to Holden, as he told reporters at the 2014 Geneva Auto Show this week:

We’re going to make sure we bring the product portfolio to the market that the customers really want. The Australian market has evolved a lot… it’s going to come back to how do we best meet their needs.

The Cascada will be sold for $50,000 AUD by the end of 2014.

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Australian Government to Create $89 Million Fund For Affected Holden Employees Thu, 19 Dec 2013 11:00:58 +0000 holden-emblem

In the wake of General Motors’ decision to cease all manufacturing operations through Australian subsidiary Holden by 2017, the Australian government has announced that they will create a $100 million AUD ($89 million USD) fund for affected employees.

Australian Prime Minister Tony Abbott is creating the fund and programs related to help transition the nation from heavy industrial manufacturing to “higher value-added” production beyond subsidies. Abbott had this to say about the matter:

In the end, no government has ever subsidized its way to prosperity. This government will be very loathe to consider requests for subsidies. We will be very loathe to do for businesses in trouble, the sorts of things that they would be doing for themselves.

The fund will comprise of $60 million AUD from the federal government, $12 million from the state of Victoria, and the remainder from the state of South Australia. Abbott expects GM will contribute the fund, as well.

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Next Holden Commodore To Be Made In China, Sport 4-Cylinder Engine Mon, 16 Dec 2013 14:43:13 +0000 Buick_LaCrosse_China_2012-04-28

Just as TTAC predicted in earlier editorials, Holden will be receiving vehicles imported from China as part of its future product plan – the vehicle slated to be imported from China is no less than the next generation Commodore.

Previous reports suggested that the next-gen Commodore would be a Camry-sized front-drive model that would also be sold as a Buick. Now the details have become clearer. The car was slated to be twinned with a Buick model made exclusively for the Chinese market and built in both China and Australia. But now that Holden has lost its Australian factories, China will be the sole location for the car’s production, and the Commodore will go ahead as a “Made in China” vehicle.

Holden will also offer a 4-cylinder engine for the first time since the 1980s, and Holden personnel are fighting to have a V6 available as an option. Holden last offered a 4-cylinder Commodore in the 1980s, and sales were dismal. Ford recently offered a Falcon with a 2.0L Ecoboost, but it accounted for less than 10 percent of sales.

According to NewsCorp, Holden feels that it’s easier to stick with the Commodore nameplate despite the drastic changes, rather than launch a whole new nameplate. The new car is said to be 196 inches long (one inch longer than the current car), and just as wide as today’s VF Commodore, but will look more like a European pseudo-coupe rather than the brawny, slab-sided look of the traditional Commodore.

There’s little doubt that a Commodore of this nature will be poorly received, with what’s left of the full-size Aussie sedan cohort rejecting this car as being an unworthy successor to the Commodore legacy. Holden’s marketing team is going to have a seriously difficult task on their hands come 2017.

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GM Looking To Shutter Holden, Re-Brand As Chevrolet After 2017 Thu, 12 Dec 2013 18:07:02 +0000 holden-emblem

With the demise of Holden’s manufacturing and R&D facilities complete by 2017, General Motors is reportedly looking to kill off the Holden brand and switch over to Chevrolet instead.

According to Australia’s News Corp, the plan to shutter Holden has been around since the early days of the financial crisis, when GM wanted to kill it off along with Pontiac and Hummer. Only fierce resistance from Mark Reuss, who once headed up Holden, led to the brand being given a stay of execution.

Outgoing Holden boss Mike Devereux told News Corp that

“Holden is here to stay. Holden has been a part of Australia’s past … and it will part of its future for decades to come. Holden is one of the most valuable brands in Australia. We are committed to the brand for the long term. The brand is going to be a part of the fabric of this country for a very long time.”

But with Devereux scheduled to leave Holden for GM’s regional operations in Shanghai starting in February, 2014, Holden will lose another potential guardian.

GM insiders feel that with Holden becoming solely an importer of vehicles, there is nothing distinct about the brand, and it makes little sense to retain it. By contrast, introducing Chevrolet would allow for GM’s Australia division to take advantage of marketing efforts like the sponsorship deal with Manchester United, and avoid any negative backlash against Holden that would arise from shutting down its Australian factories.

Holden is also seen by some as having an image problem, too closely linked to Australia Rules football and other “bogan” pursuits. As part of its continued survival, Holden agreed to market the Volt as its own product, despite the fact that it is a major money-loser and sells in negligible volumes due to its high price and poor interior packaging.

Holden insiders told News Corp that  ”The amount of money we’ve spent trying to defend the Holden brand to Detroit is ridiculous,” but GM executives would counter their work with photos of Holden Utes retrofitted with Chevrolet badges as proof of Holdens irrelevance.

On the retail front, re-branding dealerships would cost between $500,000 and $1,000,000 AUD, with dealers picking up half the tab. Any dealer that did not comply would risk losing their franchise.

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Alpha: General Motors Last Hope For The Commodore Thu, 12 Dec 2013 12:30:36 +0000 U113P5029T2D429719F31DT20120109160003

I believe 2013 will be a year that Australia decides whether it wants to have an auto industry or not,“ 

-Mike Devereux, Holden’s former Managing Director, in November, 2012

Those ominous words spoken by Mike Devereux last year have taken on an almost eerie significance in light of yesterday’s events. After more than a half century of building cars in Australia, Holden will now become a “national sales company”, ostensibly selling rebadged global General Motors products, manufactured in places like Korea and Thailand.

But veiled remarks about the Australian auto industry aren’t the only words uttered by Devereux that caused us to take notice. At the launch of the latest VF Commodore, Devereux made a vague statement about the Commodore’s future, implying that it would be built on a global platform at the Adelaide factory. While the latter is no longer possible, there’s still hope that the Commodore could live a GM architecture. The only question is, which one?

Originally, Devereux claimed that two global architectures were coming to Adelaide after 2016 – and one of them would be the next Commodore.

“This [Commodore] will run through to the end of 2016. After that time we are going to be putting two global architectures into the [Adelaide] plant, one of them will underpin the next Commodore.”

To make sure he wasn’t misunderstood, Devereux repeated: “There is another Commodore coming after this one. We’re going to build it in Adelaide on a [global] architecture.”

While production at Adelaide is off the table, there is still the matter of which architecture could be used, with two schools of thought on the matter.

The predominant theory is (or was – until Holden decided to close up shop) that the Commodore would move to the front-drive Epsilon II architecture, and become little more than a rebadged Chevrolet Impala or Buick Regal (media reports suggested that the next Commodore would be a front-drive car the size of a Toyota Camry and sold as a Buick in other markets).

There are plenty of good reasons to do this. Despite the broad fanfare the rear-drive Aussie sedans attract among North American enthusiasts, they are similar to other enthusiast pet interests, in that their sales and profitability does not measure up to the mythology surrounding them. Australian car buyer tastes have shifted away from cars like the Falcon and Commodore to smaller, more fuel-efficient cars – attributes better suited to front wheel drive platforms than rear drive layouts.

Smaller cars like the Toyota Corolla, Mazda3 and Hyundai i30 are dominating the sales charts currently, along with pickups like the Toyota HiLux. Hanging on to fifth place is the Holden Commodore, which is enjoying its strongest sales in some time. But even then, front drive rivals like the Toyota Camry aren’t far behind (the Camry currently sits in 9th place). The market for sedans is still there, but which wheels are driven may not matter as much.

However, the Commodore brand is not just another nameplate. Is is arguably Australia’s national car, and a front-wheel drive Commodore would be a dramatic departure from the familiar formula that Australians are used to. General Motors experiment with a Holden badged Malibu (based on Epsilon II) hasn’t been terribly well received either.

That leaves another global platform in GM’s selection, one that drives the proper wheels and crucially, has the potential for scale. The Alpha platform, currently used only on the Cadillac ATS and CTS, and eventually, the next generation Camaro, could make for a very nice next-generation Commodore. Its use as a CTS shows that it can be adapted to the size that Aussie full-size buyers (or what’s left of them) expect in a Commodore. The platform can accommodate everything from GM’s 2.0T 4-cylinder, to the 3.6L V6 in both turbo and naturally aspirated forms and crucially (for marketing, purposes at least) whatever V8 the next-generation Camaro opts for.

The three nameplates using Alpha right now won’t allow for significant volumes, given that they are luxury and nice sports car vehicles. But a new Commodore – sold as a Holden in Australia, a Buick in China and the United States and perhaps even as another sporty Chevrolet as a successor to the SS – could help Alpha get the volume it needs, while leaving Commodore diehards happy. Of course, it wouldn’t be built in Australia. Only GM’s Lansing, Michigan plant and a factory in Shanghai build Alpha. A Made In China Commodore, no matter how good, is probably the opposite of what Holden wants to deal with from a marketing perspective.

I’m not going to pretend that this is anything other than a bit of wishful thinking sprinkled with a basic understanding of auto industry economics. Nevertheless, I find it hard to believe that GM would go to the trouble of engineering an all-new rear-drive architecture and restrict it to three nameplates that will do 99 percent of their volume in North America. There has to be further use for Alpha, and I hope that the next Commodore is one of them.

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Holden To End Australian Manufacturing By 2017, Transition To “Sales Company” Wed, 11 Dec 2013 05:41:46 +0000 450x337xHolden-VF_Commodore_Calais_V_Concept_2013_800x600_wallpaper_01-450x337.jpg.pagespeed.ic.s3LoDh1Ve2

Holden informed the Australian federal and state level governments that it will cease car production in Australia by 2017, citing a “perfect storm” of unfavorable exchange rates, high production costs and a small but competitive car market that has seen sales of traditional Australian-made rear-drive sedans and Utes plummet in recent years. An estimated 3000 workers are said to be directly affected by the closure of Holden’s manufacturing facilities.

The news delivered a crushing blow to an industry still reeling from Ford’s departure earlier this year. Shortly afterwards, Holden appeared to re-affirm its commitment to Australia, but now it appears to be for naught. In a prepared statement, outgoing GM boss Dan Akerson said

“We are completely dedicated to strengthening our global operations while meeting the needs of our customers.

The decision to end manufacturing in Australia reflects the perfect storm of negative influences the automotive industry faces in the country, including the sustained strength of the Australian dollar, high cost of production, small domestic market and arguably the most competitive and fragmented auto market in the world.”

Long-time TTAC readers will be familiar with our extensive coverage of Holden’s on-again off-again manufacturing decision. At first, there was said to be two new global sedans, including a new Commodore (said to be based on the front-drive Epsilon II architecture), with Holden boss Mike Devereux publicly committing to building a new Commodore in Australia at the launch of the most recent generation.

Just as TTAC predicted, Holden will become a “national sales company”, presumably importing GM cars made in Korea, Thailand and even China.  The Thai built Colorado and Korean built Cruze and Malibu will comprise the future of Holden’s lineup, as demand for the Commodore and Ute has fallen consistently. In addition to the aforementioned factors, the end of protectionist tariffs on imported cars is also cited by many as the downfall of the traditional Australian car, with consumers opting en masse for Thai-built trucks and more fuel efficient Japanese, Korean and European vehicles.

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GM Rumored To Be Shuttering Australian Manufacturing Operations In 2016 Thu, 05 Dec 2013 16:25:49 +0000 450x270xcalais-450x270.jpg.pagespeed.ic.TX40bBUuCM

Reports out of Australia claim that GM will be ending Australian vehicle production by 2016, turning Holden into a brand that sells imported cars, rather than locally produced vehicles.

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.

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Australian Car Industry Dead As Devereux Out, GM Tools Up For Front Drive Commodore Mon, 04 Nov 2013 18:44:59 +0000 2013_holden_malibu_australia_03-0612

If you want to see the future of Holden in Australia, this is it. Yes, it’s the same car that Jack Baruth took to the woodshed in today’s edition of TTAC, but it’s also a harbinger of things to come for the iconic Australian marque, with the announcement that Holden’s Elizabeth, Australia plant will be tooling up to produce the first ever front-wheel drive Commodore. And even that looks doubtful.

It hasn’t been a good week for Holden, and news of the Holden Ute’s likely demise was just the first blow. Last week it was announced that Holden boss Mike Devereux will be departing for GM’s Consolidated International Operations in Shanghai.

Devereux’s departure is seen as a serious blow to Holden’s future. The British-born, Canadian-raised veteran of GM was widely seen as the man who could help turn around Holden with a 5-year, the widely-praised, outspoken executive was credited with helping shake up a badly underfunded division of GM that was at once perpetually on the brink of collapse and unable to recognize its own poor financial health. promoted to Vice President of sales, marketing and aftersales at GM’s Consolidated International Operations, which is based in Shanghai and covers more than 100 countries across Europe, Asia and the Middle East.

The ongoing uncertainty regarding Holden is creating a political climate where subsidies for Holden and other auto makers (including Toyota) are rapidly becoming unpopular with the public. But that isn’t stopping Holden from forging ahead with retooling its factory in the South Australian town of Elizabeth to build an all-new large sedan, that will be front wheel drive and likely based on the Epsilon II architecture that underpins the Chevrolet Malibu, Impala and other sedans. This new Holden has all but been confirmed to be the new Commodore, and would mark the first time since its introduction in 1978.

While TTAC has been reporting on a possible shift to an FWD Commodore for years, the latest developments appear to be the final blow for the division’s existence as anything but another brand for GM’s global architectures. The line of unique cars and engineering carried out down under will likely die with the VF Commodore, while 2016 will mark the year that the big rear-drive Australian sedans took their last breaths.

All of these developments reflect an overarching and unavoidable theme of today’s automotive industry: consolidation. Despite being the darling of enthusiasts, Holden is losing money hand over fist, particularly with Australian-built, market-specific vehicles built on the Zeta platform, such as the Commodore, Ute and other variants. In a market with 60 brands competing for 1 million sales, unprofitable players like Holden are suffering from shifting consumer tastes (towards crew cab pickups, Japanese compacts and more premium cars), a freer economic market for new vehicles and increased fuel prices.

On the corporate side, Devereux’s move to Shanghai is a reflection of China’s increasing importance in GM’s international operations. It’s possible that as Holden wanes, GM could copy Ford’s move of bringing the once distinct Australia/New Zealand markets under a regional umbrella, with Holden becoming little more than a brand selling Thai-made pickups and Korean made Cruzes. And maybe, if they’re lucky, an Epsilon sedan that is made in Australia, not Korea.

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Holden Prepares To Euthanize The Ute Wed, 30 Oct 2013 17:21:08 +0000 2010-2011_Holden_VE_II_Ute_(MY11)_SV6_utility_(2011-04-22)_03

2016 will be a pivotal year for Holden’s Commodore-based Ute. Declining sales and shifting production capabilities could mean that the traditional Aussie Ute could become extinct, as both the Commodore and Ford Falcon Utes die off.

While the Falcon is slated to die within the next three years, Holden is at a crossroads regarding the Commodore. Executives from the Australian GM outpost have issued vague statements about a global platform for Australia, which could very well be a front-drive layout – if Holden even sticks around to build cars in its home country.

Ute sales have been decimated by an influx of mid-size pickup trucks built in Thailand, where labor costs are significantly cheaper. Auto makers can also take advantage of a free trade agreement to import Thai-built vehicles with zero duties. By contrast, Australia, where Utes are manufactured, is a much more expensive country to build cars in, and has seen its domestic auto industry nearly wiped out due to cost concerns.

Sales of the redesigned Commodore and its variants are up 15 percent year-to-date, but Ute sales have fallen 31 percent in the same period. While over 100,000 Thai built pickups have been sold so far this year, just 4100 Holden Utes and 3500 Falcon Utes have been sold in 2013. Trucks like the Toyota HiLux, Nissan Navarra, Ford Ranger and Holden’s own Colorado dominate Australia’s best-selling vehicle list, with the HiLux selling 40,000 units in 2012 – double that of the Holden Ute’s best year ever in 2004.

A combination of a boom in mining and a desire for a more practical family car has spurred sales of the Thai-built trucks. Unlike the two-seater Utes, the Thai trucks have four doors and two rows of seats as well as four-wheel drive, making them a replacement for station wagons and other utility vehicles.

For all the talk of the Ute being an icon of the Australian motor industry and its supposed desirability among enthusiasts, the cold reality is that nobody wants this car. And until that changes, it is on an inevitable death spiral.

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Opel Withdraws From Australia After Less Than A Year Mon, 05 Aug 2013 12:00:35 +0000 Opel_Astra_J_front_20100725

Opel’s foray into the Australian market, which began in late October, 2012, has come to an end. Having sold just under 1600 vehicles in that time period, Opel has decided that the Australian market is not viable for its wares.

Australian outlet Drive interviewed Opel officials in Australia who claimed that Opel was unable to price itself competitively in the marketplace. Their Astra compact was simply too expensive to compete with offerings from other makers like Toyota, Mazda and Hyundai, whose compact cars are among Australia’s top sellers.

Opel’s launch also raised questions regarding internal competition with Holden, GM’s Australian arm. While Opel maintained that it would offer a “European brand experience“, the fact that Holden once offered the Astra did little to help clarify matters for Australian consumers.

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Holden To Aussie Government “Moar Monies Plz” Thu, 18 Jul 2013 14:00:05 +0000 Holden-Colorado-7-front-three-quarter-625x416

Hot on the heels of a $275 million “investment”, Holden is going back to the Australian government, hat in hand, asking for more money. This time, Holden wants another $265 million to keep their assembly plants online.

According to Holden, assembling cars like the Cruze and Commodore in Australia carries a premium in the neighborhood of $3460 USD compared with other locales like Korea. The Thailand built Colorado 7 and the Korean-built Captiva, both crossovers, are said to help offset the loss-making nature of Australian manufacturing.

Holden is said to be seeking more money in the wake of Ford’s closing of their Australian manufacturing operations. The incoming administration in Australia’s government are known to be supportive of propping up Australia’s manufacturing sector, with the new Industry Minister a vocal supporter of the auto industry. Meanwhile, opposition figures have indicated that they would look to dramatically cut subsidies for the auto sector, so Holden may be feeling extra pressure to get a deal signed sooner rather than later.

While Holden has previously been firm in its commitment to Australian manufacturing, the tone seems to have changed, with Holden indicating that further investment is a prerequisite for maintaining a manufacturing presence in the country. Holden isn’t alone either; Toyota is said to be looking for government subsidies as well, as a rapidly changing auto market and unfavorable exchange rates has left many auto makers caught flat-footed down under.

While other countries are making substantial investments in their auto sector, Australia, like Canada, has been taking cautious half measured, investing more modest amounts in conjunction with the OEMs and while adopting a “wait and see” approach. Both countries are watching their auto plants gradually fade in both importance and number, as cheaper manufacturing sites and unfavorable exchange rates and other structural factors erode whatever competitive advantages the two countries may have once had.

The nature of globalized product lines also doesn’t do any favors for Australia, which used to assemble vehicles that were locally popular, like large rear drive sedans and Ute pickups. But with the Ford Falcon gone, the Holden Commodore rumored to be moving to a global platform and consumers flocking to vehicles like the Toyota Hilux, Ford Ranger and Holden Colorado for their truck fix, Australian cars and their manufacturing sites seem to be slowly losing the battle for their lives.

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HSV Gen-F GTS: Imported From Adelaide, But For How Much Longer? Thu, 11 Jul 2013 14:38:45 +0000 Click here to view the embedded video.

Holden and HSV try their hand at the “Imported From Detroit” style car commercial. As someone who has always been partial to Aussie muscle sedans, it’s easy for me to say I’m a fan. No doubt the line about cars becoming “smaller, quieter and more vanilla” will resonate with many of us. In a country where the Mazda3 and Toyota Corolla have knocked the Commodore and Ford Falcon off the top perches of the sales leader boards, it carries extra significance.

The latest news out of Australia shows that Holden’s Australian manufacturing base is barely hanging on, searching for new product in the post-RWD Commodore era and hitting up the Australian government for yet another round of subsidies. The sad fact is that the Commodore, like the soon-to-be-departed Falcon, is an anachronism. As our own Marcelo De Vasconcellos put it

Welcome to the brave new world. A world where what’s available in your local markets is more influenced by what people predominantly prefer the world over, than whatever the locals may wish for.

In this case, that is a more efficiently packaged sedan, and that would suggest a transverse layout, smaller engines and a footprint appropriate for markets beyond Australia. There may be a chance that the next Commodore rides on some kind of Alpha platform, but long-standing rumors suggest that it will in fact resemble every other front-drive GM sedan out there already.Interestingly, an SUV such as the Captiva, has been ruled out for Australian production, despite being cited by some as a potential savoir for Australian car factories. The reality is that a Thai-built Captiva is far more profitable, and that’s not going to change any time soon.

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Toyota Looking For Government Cash To Help Sustain Australian Operations Wed, 05 Jun 2013 10:00:09 +0000 16opb-aurion-presara-hero-front-ink-2012-749x422

Australian media is reporting that Toyota is next in line for some government cash, following Holden’s deal with the government to keep production of the Commodore and other models in Australia.

Toyota currently builds the Camry and Aurion (a V6 powered sedan based on the Camry, pictured above) at a factory near Melbourne, and a deal with the government is said to bring about a third model, likely the RAV4. Toyota’s Australian division head didn’t hesitate to re-affirm the company’s commitment to Australia, stating that they would remain in the country “indefinitely” and were taking a “long-term” view of things, even as rival firms panic about unfavorable exchange rates.

Local car production has been a money-loser for Toyota, with Australian outlet Go-Auto reporting a $160 million loss over the last three years. If Toyota’s deal is similar to Holden’s, Toyota will have to pony up a lot more cash on its own – with GM contributing $1 billion to keep production running until 2022.

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Derek’s Grey Market Fantasy Garage Mon, 03 Jun 2013 20:55:23 +0000 2012-Mercedes-C63-AMG-01

In my rant about the Holden Ute, I qualified my cynicism with a caveat; my tastes are not representative of the broader market, or what makes good business sense for an auto maker. Some of you suggested that I should start injecting more of my own opinions/enthusiasm into these sorts of articles. I am reluctant to mix business with my own automotive fantasyland (after all, everyone with access to a keyboard does just that that), but this post isn’t supposed to be informative or insightful, just pure fun. I am limiting myself to new cars on sale outside the United States and Canada, as there are far too many used cars out there that I’d love to own.


Daily Driver – Holden Calais V:

Why the lesser known Calais V over the more popular, sporting Commodore SS or HSV models, both of which are available with a 6-speed manual? Simple. I don’t want to drive a car that looks like it’s been painted with Freezies and black magic markers. Since this is my fantasy garage, I have plenty of other opportunities for belligerently loud sports cars with bowel-jarring ride quality and performance envelopes far beyond my capabilities.

The Calais still has a 6.0L small block V8, but it’s not embarrassing to pull up to a valet stand in one (unlike a new HSV Commodore. Glossy black wheels are for drug dealers and pimps). I imagine it’s totally isolating from the road but still has reasonable handling dynamics – what a Panther should be – and the 6.0L V8, even in neutered automatic trim, can probably lay waste to whatever crappy 500-treadwear all-season tires it comes on. GM, please, this should be the new Buick Park Avenue. Unlike the Ute, it will sell.


Euro Hot Hatch – Renaultsport Megane 265:

Ok, I lied. The Holden would be my daily driver for any trip that involved the highway, or taking an impromptu blast to Montreal to go get a smoked meat sandwich for lunch. But this is what I’d drive around town to do my errands. I was always captivated by photos in Evo magazine of the diminutive Clio 182 cup lifting its inside wheel somewhere in Wales, coming dangerously close to the rear bumper of whatever supercar they decided was worthy of their hilariously hyperbolic prose. Most of what you read in British magazines is complete fantasy, whether it’s declaring the Jaguar X-Type a “genuine 3-Series rival” or talking about their driving heroics. But I’ve been assured by none other than Jack Baruth that this latest Megane 265 is one of the best cars - in the wuuurrrlld.  Make mine GT3 RS green (yes, I know that’s a Clio).


Authentic Off-Roader – Toyota Land Cruiser 70:

The Land Rover Defender might get the lion’s share of attention when it comes to grey market SUVs, but I am much more intrigued by the idea of buying a brand new version of a decades old Land Cruiser. Toyota Australia will still sell you one of these, in three-door, five-door and pickup truck configurations. I really have no use for a body-on-frame work truck like this, but neither does anybody who buys a Ford SVT Raptor. The Troop Carrier GXL is my pick, since it looks like it’s just one Ma Deuce away from being put into service by bloodthristy janjaweed.


Wagon of Choice – Mercedes C63 AMG:

This was a tough choice. The Audi RS4 and RS6 have all-wheel drive, which means four-season shenanigans for this Canadian. But the C63 won out in the end. I prefer the purity of the naturally aspirated V8, even if it is a little slower on paper. Since I have a thing for Q-Cars, mine would be painted in the most banal shade of tan and fully debadged. Of course, I’d fit the Performance Pack and a Tubi exhaust, just to scare the hell out of the yappy little bichon frises tied up outside my local espresso bar when I stopped in for my morning cup.


Death Warrant – Caterham Seven CSR260: 

Jack had a bad experience with his Caterham, but I’m undeterred. If the 260 horsepower Duratec doesn’t kill me, then I’m bound to be maimed by a distracted parent in a Sequoia trying to silence their insolent children while reaching for their third Ativan. Better go draft my will…

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We’re Not Getting The Holden Ute, But Not For Reasons You’d Expect Mon, 03 Jun 2013 15:59:37 +0000 ge5547549213459505029

Every so often, the same tired rumor will pop up again, like a particularly resilient pimple that habitually reappears in the same conspicuous spot. Thanks to the incessant hunger for clicks among auto websites, these rumors refuse to die, no matter how asinine they are. How many times have you seen a “BREAKING” or “EXCLUSIVE” story on the next Toyota Supra or some absurd BS fabrication regarding a diesel Mazda MX-5?

The latest round of bollocks concerns the Holden Ute, another car that tickles the fancy of enthusiasts on all sides of the globe, but would be a commercial nightmare if they ever tried to export it to America. One Australian publication is now claiming that a guerilla marketing campaign showing Mark Reuss lapping the Nurburgring in a brand new Ute is part of a ploy to export the Ute to America. Of course, other car blogs have been lathering themselves up into a frenzy over the prospect of a very expensive quasi-pickup that they will not purchase once it gets here.

Holden claims that there will be some kind of major announcement regarding the Ute next month. I’m going to be the first to say it will not be related to any Ute exports. There are two simple reasons here: the US-Australian dollar exchange rate is abominable as far as exports are concerned, and there is likely little to no demand for a very pricey product that is neither fish nor fowl. Who is going to pay $50k for Corvette powered pseudo-pickup wearing a Chevrolet badge. Did we discuss the UAW’s reaction to an Australian built pickup, or the whole “cannibalizing GM’s new ‘lifestyle pickup’ thing “either? Both of those matter, but would require their own articles to really get into.

One thing that is not a factor is the chicken tax. Not long ago, Holden used the chicken tax as an excuse for why it’s been unable to export Utes to America. TTAC commenters soon produced plenty of evidence showing that Australian cars and ”light commercial vehicles” (i.e. pickups and Utes) can be brought to America duty free. So that excuse is out. I feel for Holden though. The Australian domestic car industry is going down the tubes, their signature product is about to become just another boring front-drive appliance and all they want to do is send some good product to world markets.

The problem is nobody wants it. No matter how loud the internet cries out for it.

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The Holden That Almost Became A Buick Fri, 31 May 2013 15:08:02 +0000 Concept Car Buick XP2000   (2000)

The most famous Holden product to ever wear a Buick badge is the Chinese-market Park Avenue, a car that Buick dealers inexplicably rejected. But back in the mid-1990s, GM apparently planned to use the VT Commodore architecture as the basis for a new Buick sedan, previewed in the XP2000 concept above.

Squint really hard and you can see a resemblance in the basic shapes of the two cars. Since the XP2000 was a concept, it’s likely that the Buick production version would have stuck closer to the Holden design, hardpoints and all. The concept used a 5.0L small-block V8 and GM’s 4-speed transmission, but a smaller displacement V8 was rumored at the time.

The XP2000 had a lot of features that were considering cutting edge for its 1995 debut but are relatively mundane today; a crude version of a lane keep assist, adaptive cruise control  as well as a vehicle key that could automatically adjust things like seat position, mirrors and climate control based on driver preferences. None of these would be earth-shattering today but they were pie-in-the-sky ideas nearly 20 years ago.

The biggest payoff may have been the readiness of the VT chassis to adapt left-hand drive. Without it, we would never have gotten the Pontiac GTO, and other export markets would have missed out on the Chevrolet Lumina.  If anything, the XP2000 is another footnote in the stilted story of GM’s attempts to bring the Holden Commodore to North America.


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Holden Sticking With Australia Despite High Costs Fri, 24 May 2013 15:20:53 +0000 calais-450x270

With the launch of the all-new VF Commodore just around the corner, Holden’s Mike Deveraux doesn’t Ford’s bad news to steal the limelight away from his very important product introduction.

Amid a backdrop of constant squabbling between the governing party and the opposition, Deveraux urged both sides to find common ground over the fate of Australia’s auto industry

“…both sides of the equation understand how critical the auto industry is to the economy and how plugged-in in terms of its viability. We have a pretty solid plan. We will need to work closely with the opposition and government to make sure that Australia’s policy setting are competitive globally.”

As of April, the Commodore was ranked #10 in Australia’s sales chart and in danger of slipping. With the tide turning against large rear-drive sedans, Deveraux and Holden have to figure out how they’ll build cars for the Australian market without turning Holden into just another outpost for rebadged GM global products. Rumors of the Commodore becoming front-drive would be a blow for enthusiasts, and bring an end to Australia’s muscle car era, but may end up aligning better with market tastes. Ironically, Chrysler could end up being the lone auto maker to offer a rear-drive sedan in Australia should that scenario take place.

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Where Is Currency Manipulation When We Need It: Ford Shuts Down Down Under Thu, 23 May 2013 08:41:51 +0000 File picture of Ford Australia's head office in Melbourne

Ford has long been at the forefront of the currency debate, claiming currency manipulation when the yen went to levels that nearly killed the Japanese auto industry, and shouting “currency manipulation” now that the yen is back to normal levels. Now, Ford itself experiences the devastating effects of changing exchange rates:  Ford is shutting down all its manufacturing operations in Australia. The reason: A strong Australian dollar.  Says Reuters:

“Ford Motor Co  will shut its two Australian auto plants in October 2016, blaming a strong currency and costs that are hitting manufacturers just as the country looks for other sectors of its economy to cushion the end of a mining boom.”

According to the report, the closure of Ford’s  engine plant in Geelong and its vehicle assembly plant in Broadmeadows will cost 1,200 jobs. Ford  built 37,000 vehicles in Australia last year, and has been in the country since 1925.

“Our costs are double that of Europe and nearly four times Ford in Asia,” Ford Australia CEO Bob Graziano told Reuters. “The business case simply did not stack up. Manufacturing is not viable for Ford in Australia.”

The Aussie has climbed from just over 60 cents in 2009 to above parity with the U.S. dollar, where it has been for more than two years. Currently, one AUD costs 97 cents.

A few weeks ago, Jac Nasser, the former head of Ford, warned that Australia’s car industry has passed the point of no return, and said it would die within the next few years.

I am sure that in this case, Ford would have been grateful for a little currency manipulation – or shall we call in central bank intervention – and would not have complained.  GM’s Holden said it will cut 500 jobs, citing damage from the high Australian dollar.

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Ex-Ford CEO Says Australian Car Industry Is Dead Tue, 30 Apr 2013 13:57:43 +0000

Jac Nasser, the former head of Ford, is warning that Australia’s car industry has passed the point of no return, and expects to see it die within the next few years.

Nasser placed the blame at the politicians doorstep, citing a dearth of state subsidies for the auto industry and a lack of clear vision on the part of politicians for the decline of Australia’s domestic car industry, which employs some 224,000 people. While Holden, Ford and Toyota are the big name vehicle assemblers, the vast majority of jobs come from parts suppliers rather than the manufacturers themselves. The Australian quotes Nasser as outlining the challenges ahead for Australia

“The signs aren’t good,” he said yesterday. “You’ve got an exchange rate at a 30-year high, you’ve got higher costs in Australia, you’ve got excess capacity in the motor industry worldwide, you’ve got a very weak currency in Japan and you’ve got a weak euro. When you put that mix together, it’s very difficult to expect a relatively small but talented Australian auto industry to work its way.

As soon as you have a reduction in the scale of domestic manufacturing – let’s assume one of the three decide to exit Australia in terms of manufacturing – then you end up potentially with sub-scale supplier infrastructure…Once that happens, I think it’s a domino effect. It would be a very sad day for Australia but unfortunately it looks like it could be inevitable.”

One of the major issues cited by many observers (as well as the B&B) is that of tariffs. A report in the Australian business publication BRW states

Australian tariffs on imported motor vehicles fell to 5 per cent by 2010 from 10 per cent in 2005. Where Australia has a free trade agreement, there is a zero tariff. Industry bodies such as the Federation of Automotive Products Manufacturers (FAPM) say the hurdles on entry of foreign vehicles are much lower than those imposed by other car manufacturing jurisdictions and the country should demand reciprocity on tariffs with other producing countries.

The reduction in tariffs is often cited as a reason for the freefall of traditional Australian-made vehicles like the Ford Falcon and Holden Commodore. The big Australian iron has been replaced at the top of the sales charts by vehicles like the Mazda3 and Toyota Corolla and Hyundai i30, as well as the Toyota Hilux and Nissan Navarre pickups, all of which are made offshore. At the end of the quarter, the Commodore was just barely hanging on in 9th place, while its perennial rival the Falcon ranked a dismal 37th in the sales standings.

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Holden Fires 500 Workers in Australia, Future Shaky Mon, 08 Apr 2013 06:43:45 +0000

After having received  more than $2 billion in subsidies from, the Australian government in the past 12 years, GM’s down-under Holden unit announced that it will lay off another 500 workers in response to falling demand and the high Australian dollar, Australia’s ABC News reports.

Cheaper imports draw customers away from Holden’s locally made Cruze and Commodore models, the company says.

Holden’s managing director, Mike Devereux, lays the blame for much of the Australian dollar’s appreciation at the feet of nations, such as the US and Japan, that have been deliberately devaluing their currencies. “Importantly, the currency plays being made by other countries mean that were are not competing on a level playing field, not even in our own backyard,” Devereux said.

A high Australian dollar makes imports cheaper and exports unattractive. When quizzed about the future survival of Holden’s Australian production and design operations, Devereux said the company was committed to staying in Australia but could offer no guarantees.

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2014 Chevrolet SS: Suck On This, CAFE Sat, 16 Feb 2013 06:06:39 +0000

Here’s our first look at the Chevrolet SS. Silly moniker aside, it looks like a home run.

My biggest fear with the car – that GM would add too much crap and excess detailing, ala the Corvette C7 – has been alleviated. The design looks clean and businesslike. I might be inclined to swap out the Monte Carlo SS-looking rims for something else, but I wouldn’t be embarassed to valet park an SS anywhere.

The one misstep is that Chevrolet didn’t offer a 6-speed manual with the 415 horsepower LS3. I’m sure it would have been easy to find a transmission, though cost issues relating to model mix may play a part here. I’m sure the take rate would be higher than it would be for a traditional sedan, but the 94-96 Impala SS didn’t offer a stick and it scarcely bothered the thousands of buyers who snapped up the entire run. The SRT 300C and Charger, the chief rivals of the SS, don’t offer a stick either.

Now all that’s left is a Jack Baruth track test.


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Holden Boss Spills The Beans On New Commodore Mon, 11 Feb 2013 17:37:21 +0000

Good news, Aussie car fans. The Commodore lives. But the evidence keeps piling up that the next one will be a front-drive car bearing little to no resemblance to the current RWD muscle car.

The Australian, reporting on the VF Commodore launch event, says that we’ve got about three more years to enjoy the current rear-drive car.

After the speech, Devereux told the frazzled media scrum: “This [Commodore] will run through to the end of 2016. After that time we are going to be putting two global architectures into the [Adelaide] plant, one of them will underpin the next Commodore.”

To make sure he wasn’t misunderstood, Devereux repeated: “There is another Commodore coming after this one. We’re going to build it in Adelaide on a [global] architecture.”

The Australian reports that the next Commodore will be a Toyota Camry sized vehicle that will be sold as a Buick in other markets. That jibes with previous reports of a global, front-drive architecture coming to replace the rear-drive one. At best, we may see some kind of Alpha platform vehicle utilized in the future, but the front-drive Commodore is going to happen. Australia’s automotive tastes have turned upside down over the past five years, and the Commodore’s popularity with the buying public isn’t nearly what it used to be.

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Holden Calais Previews Chevrolet SS Sun, 10 Feb 2013 02:30:46 +0000

Holden took the wraps off of the latest VF-Series Calais, the luxury version of the Commodoe. Expect some, but not all of the styling cues to carry over to the upcoming Chevrolet SS sports sedan. This is also likely the last hurrah for the big, rear-drive Holden. Slow sales have sealed the fate of the Commodore, with a 2016 death date scheduled.

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