Australia’s most important and influential automotive brand, Holden, had been reduced to a fragment of its former glory by the time it died on Monday.
It was minuscule in terms of employees, sales and income, compared to where it once had been in its glory days as Australia’s No.1 vehicle brand, commanding as much as 50 per cent of the market while protected behind substantial tariff barriers.
As recently as 2002, Holden led the market with a 21.4 per cent market sales share.
In the process it sold more than 88,000 locally-built Commodores and reported a $265.6 million profit back to the bosses in Detroit.
But as tariffs gradually whittled away, as free trade deals became more common, and as the Australian new passenger vehicle market fragmented into many niches, Holden’s power and profitability faded.
The brand’s future looked questionable once government shied away from further investment and its factory at Elizabeth in South Australia closed, taking the locally developed, engineered and built Commodore with it in 2017.
A car company without a factory to build its cars is like a body without a heart and soul.
The Commodore was at the core of Holden’s reason for existence.
The brand flailed around trying to reinvent itself, but never seemed settled.
It fought with its dealers and rotated through different bosses.
It tried to escape its bogan base and then re-embraced it.
The biggest controversy for Holden fans was retaining the Commodore badge on an import that shared none of the local car’s essential technical ingredients.
By the end of 2019, Holden had given up on the ZB Commodore and declared it was axing all its passenger cars and focusing on SUVs and utes.
Within two months and just weeks after Holden posted its lowest annual sales since 1954, General Motors (GM)’s most senior management had nixed that plan.
In fact, as was made clear by GM at a press conference in Melbourne on Monday afternoon, no plan to make Holden affordably sustainable could be found.
“Factors weighing against further investment at Holden included the highly fragmented domestic markets for right-hand-drive products, the economics of supporting the brand and getting to an appropriate return on investment,” explained Julian Blissett, GM’s senior vice president of international operations.
“More broadly, it is an issue of scale.
“With the global consolidation of the automotive industry it is becoming increasingly challenging for us to support a brand and a business that operates in just two markets (Australia and New Zealand).”
Added Kristian Aquilina, Holden interim managing director: “The hard truth was there was just no way to come up with a plan that would support a competitive, and growing and flourishing Holden and also provide a sufficient return to our investors.”
In essence, a business already struggling to survive simply didn’t fit with GM’s future.
Under the stewardship of global boss Mary Barra, GM has abandoned the global sales race and instead chosen to focus on its most profitable North American and Chinese markets.
It has diverted enormous amounts of cash to deliver the new generations of electric vehicles demanded by legislators pressing for a CO2-free future.
It even sold off its Europe Opel/Vauxhall business in 2017.
And that’s important for Holden, because Vauxhall was GM’s brand in the UK, offering a complete range of right-hand-drive vehicles ranging from small cars to medium SUVs.
Holden had been able to cherry-pick from Opel-Vauxhall’s range for its line-up, mix in some Korean-built models and – before the Elizabeth closure – top it all with the local Commodore.
But Vauxhall’s absence dried up much of Holden’s supply and forced it to source vehicles from GM’s shrinking global portfolio, all of which were designed to make money in left-hand-drive markets.
Right-hand-drive business cases were simply too hard to build.
We are talking at most a few thousand sales per car per annum.
And truth be told, Holden didn’t have access to great cars, either.
Nothing in the current range earns a place among the best vehicles on offer in its segment.
Ford and Toyota, which also closed its local factories around the same time as Holden, were better off.
Ford’s Ranger Ute is incredibly popular, as is Toyota’s HiLux and range of SUVs.
Holden didn’t have the same quality to offer and is now gone.
However, GM’s departure is not total; it intends to anoint a business to convert left-hand-drive Chevrolet SUVs and trucks and other selected North American models locally to right-hand-drive.
In effect, this local business will be doing profitably what GM couldn’t.