Saturday, February 16, 2019


With UK car industry behemoth Inchcape now becoming the ‘spoiler’ in the ongoing discussion about the survival of Holden in Australia – and GM’s clear intention to retreat to Fortress America, it’s time for some crystal-balling.

After GM Chair Mary Barra unloaded Adam Opel AG (Opel and Vauxhall) to Groupe PSA, PSA struck a deal with GM to provide German Opel-built Holden Commodores for six years. Okay, what was supposed to happen then?

PSA said that all future Opel and Vauxhall products would then be built on shared PSA architectures, and once that news broke I was told very emphatically by a top GM executive from the USA, that no new Holden Commodores would be built on PSA platforms.

That left me wondering if future Commodores might come from some shared US marque platform, say Chevrolet or Buick.

However, a severe disruption in the car market puts this plan into the area of doomed futures.

Passenger cars are ‘on the nose’ and that could mean that by 2023 there may be not enough demand for Commodores and Astras – regardless of the platform source, or where they are built. Any ROI would be shaky accounting.

At the moment former Toyota head honcho Dave Buttner, and his team at Holden are desperately trying to rebuild satisfactory sales throughput for Holden’s dealers, by concentrating on the flavours of the decade – SUVs and trucks (of which Holden has a good range, of high quality, competent models).

The trouble is, that as good as Holden’s offerings are, there is very, very intense competition in the marketplace for the same types of vehicles – everybody else has got them!

I know I often refer to the high number of brands (currently 62) fighting for oxygen and visibility in the tiny Australian marketplace (1.3 million vehicles last year), but in reality that means lots of dollars being spent trying to seduce consumers away from their trusted brand, to something new and different.

Can Holden muster enough resources and imagination to notch up a win in one segment or another? I’m afraid I don’t think so. Keep in mind, funding marketing comes from lots of sales and the profit margins. Low sales, less margin, and funding is very difficult.

The reason is, not only was GM-Holden slow to register the rapid change in consumer ‘s choice of vehicle; but thanks to Holden’s arrogance and state of denial, it kept on investing in Commodore in a shrinking market for that sized car.

Remember at the time Holden Commodore sales began stuttering to a halt, the most popular passenger car was two segments down the scale – the Toyota Corolla hatchback!

If Inchcape was to absorb the Holden operation I suggest that Holden’s ‘brand value’ may encourage the British company to retain the name, and battle on with whatever it can source, from wherever.

Or, does that mean passenger cars built on PSA platforms after all, and branded Holden? No, I think Inchcape will actually import Insignias and Astras from PSA, built on PSA architecture, and most importantly, branded Opel!

Sneak peak at Peugeot's forthcoming 508

GM’s only choice, if it rebuffs Inchcape, is to drop the pretence that the all-Australian brand will continue, and change the company name to Chevrolet and bring in cars with a bowtie badge.

However, I think the speed of change in the marketplace will nix all these options. Inchcape's intervention would change the whole paradigm.

I reckon, and this is really gazing into the murky view of the crystal ball, is that if GM does a deal with Inchcape its car products will come from France (badged as Opels after all).

Holdens would be SUVs and trucks that would come from American, Mexican and Thai factories.

If that does happen, where in heaven’s name will Inchcape find the necessary marketing resources to do battle in a volatile market? Again, funding marketing comes from sales and margins.

The same question could be asked of Inchcape, about how it can possibly fund a sales boost for those pesky French brands – Peugeot and Citroen? 

Sales of those two marques are virtually flatlining, and I have always held the view that they actually don’t deserve a place in Australia’s vehicle market, for the paltry few Francophiles who fancy a bit of Bordeaux and Camembert in their garages.

Inchcape? I think you’re lining up to throw good money after bad. I may be wrong, but the market has a louder voice than me.

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