Monday, April 16, 2018


A little less than a year ago I wrote to GM-Holden’s new marketing boss Mark Harland, to welcome him to Australia, but to also express my concern about the challenges he faced in the new job, and I suggested we could meet.

I know you’ll think that suggests I have an ego as big as Australia, but I genuinely thought some local knowledge might help, and because of my experience in brand recovery, brand building and brand management, perhaps we could thrash out some ideas over an informal lunch. In my letter I postulated that I thought the issues were so serious that a year out from that date Holden’s market share might even drop below 5%.

Firstly, the letter went unanswered (no surprise there), and second, this month Holden’s market share dropped to 4.8% and it only just scraped into the Top 10 brands, on the VFACTS report.

I can also report that Mark Harland, a 20-year GM veteran, this month has not only left Australia, but he has also resigned from General Motors.

It should be noted Mark was just the latest in the plethora of 'marketing marvels' who passed through GM-Holden's revolving door.

GM-Holden’s Chairman and CEO, Mark Bernhard said “The company valued Mark’s efforts and passion.”

Maybe so, but Holden’s problems which have led to it sliding down the slippery slope began even before the company announced it would cease local manufacturing.

Holden’s future was inextricably bound to its relationship with GM Europe, and, wait for it, ’22 new models’.

Then last year along came GM CEO Mary Barra (for whom I have the highest respect), and dumped GM’s European operations in the lap of Carlos Tavares, CEO of France’s Groupe PSA, for a bit over two billion greenbacks.

That certainly set the cat among the pigeons at GM-Holden. There was a lot of collective jaw-dropping when the news hit Melbourne. Then there was another surprise in store, after I revealed that a highly-placed source of mine at PSA told me that during the discussions, Ms. Barra even offered Carlos Tavares the complete Holden operation, if he so wished!

He did not wish to do that, because I’m sure he realized he had quite enough on his plate just trying to integrate the huge GM European operations (Opel and Vauxhall) into the Groupe PSA family.

Then, Holden realized what a dreadful mistake it had made a year or so earlier, when it decided it would call the rebadged Opel Insignia, a Commodore. The poor sales of the ZB are testament to that huge error of judgment.

At that time, of the ’22 new models’, we had seen only the Astra range of compacts, and the outstanding Holden Spark. All of a sudden the product plan was in shreds, the future of the German-built Commodore was completely up in the air, and selling Holdens – any Holdens – was about to become really, really difficult.

It’s worth pointing out that many of Holden’s most senior and experienced dealers could see the writing on the wall as these events unfolded, and they were not happy.

With sales determindly heading south, they are now furious at the Holden management, and I’m suggesting that the visit by Barry Engle, who runs the GM South American and Australian business units could even lead to Mark Bernhard departing the Holden corporate office as well.

Quite frankly Holden’s current position is an unmitigated disaster.

The brand, the business, and the company has been thoroughly trashed, so don’t be surprised if Mary Barra takes matters into her own hands and either dumps the entire Holden operation, or forces it to be drastically reshaped.

Recently I opined that maybe GM could rename it Chevrolet and supply cars from the USA, but that’s not going to work because of the volatility between the US and Australian currencies. The same applies to any future cars supplied by Groupe PSA, because the Oz dollar-Euro position is just as bad.

Yes, GM could rebadge the business as Buick and just bring in a few Chinese-built upmarket sedans and SUVs, but that won’t work either, as GM China only builds LHD vehicles.

But also, where does that leave the Holden dealer network which has swallowed all the corporate bullshit from the Holden Head Office and invested massively, on the basis that it would be selling big volumes of ’22 new models’?

Australians have a right to be very disappointed in the way GM has taken its hands off the steering wheel and let Holden drift aimlessly toward oblivion.

The road to recovery, any sort of recovery, will be long and hard, with potholes, ruts, and bumps to battle, and there’s no guarantee Holden can ever reclaim the dominance and brand image it once enjoyed.

I never thought I would ever be writing about Holden as road-kill, but I fear that the greatest magician in the world can’t whip the covers off a new and improved Holden!

POSTSCRIPT: The sad thing about the doomsday scenario I've created here is that it has nothing to do with the products. In the last year or so the cars have been brilliant - Spark, ZB Commodore, Astra, Colorado and Equinox.

It's all about that mysterious element - 'Smoke & Mirrors' or, perceptions. The battle that needed to be waged was all about changing the perception of the Holden brand, and the value the products represented in the intensely competitive Australian marketplace. There are 62 different brands fighting it out here!

Sure it's as much about pricing, to bolster the perception of value, but unfortunately Holden managed to screw that up as well. Only when forced, by dwindling sales, did it move to introduce longer warranties, and increased marketing incentives. Desperation has set in - big time!

It's so sad that it took the management so long to come to the conclusion that it really was no longer the dominant brand (as much as 52%) in the Australian car-buying mindset.

Yes, really sad.

I wonder what the Big Three are contemplating right now?

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