July 20, 2005
I’m a big fan of Bob Lutz and what he’s done to help Holden, General Motors’ Australian outpost, but I have a feeling the run of good luck—one that began in 1997 with the launch of that year’s Commodore—may be coming to a close.
In the 1980s, Holden was near death, with some pundits saying it was the end of the all-Australian car. Word on the street was that Holden would be just a badge, its products sourced from Isuzu, Suzuki, even Cadillac. It began that way—Holden was selling Nissans and Toyotas at one point—before the 1990s renaissance. Opel products were brought over from Europe and given Holden badges, unifying the range. It gave GM some decent economies of scale, with the Opel Corsa being sold as a Vauxhall, a Chevrolet and a Holden in different nations; ditto the Astra and Vectra.
But, we hear, the days of the world car at Holden may be numbered, because a source within the company is saying that it could be cheaper bringing in Daewoos from Korea and slapping the badge on them.
On one hand, there was GM going on about how Chevrolet would be its price-leading marque globally, selling the Daewoos under the all-American bow-tie brand in Europe. But, as in Korea and Thailand, they’re going to make an exception with Holden.
Seen it all before: didn’t work then, won’t work now.
While Holden’s brand may be synonymous with ‘Australia’s Own Car’, its slogan for years, somehow folks will take exception to rebadged Korean motors. Australians have never really cared much for their compacts—to them, the small car is a domestic appliance, and probably have little place on the streets of Sydney or Melbourne or the outback—so it’s unsurprising to hear this idea being touted. In the 1970s, the same murmurs were going around Ford’s boardrooms when they decided that Australians should have the Laser and Telstar—rebadged Mazdas at a time when plenty of people still remembered WWII and boycotted Japanese cars. These cars sold well, but to this day, they remain largely unloved. They may have been reliable—and the 1985 and 1994 Laser generations were, in fact, very good—but for the most part, they were undistinguished. Ford took a long time to cover from that in this part of the world; it wasn’t really remedied till the Focus began selling Down Under and restoring faith in the blue oval. And if one wanted a Mazda, why not buy a Mazda? In the late 1980s, you could have a Mazda 626 for the same money as a Ford Telstar, but get a doubly long warranty, even though the cars were virtually identical and made by the same people.
Holden has carefully built up its brand to be a global one, yet appears to wish to dilute it, replacing Barina (Corsa) with Kalos, Astra Classic with Lacetti, and Vectra with Magnus. It reminds me of the line-up it had when the Barina was a Suzuki Swift, the Astra was a Nissan Pulsar and the car selling in the Vectra’s place was the Holden Apollo, née Toyota Camry.
My suggestion: keep the status quo, make slightly fewer bucks per unit, and reintroduce Chevrolet, plonking the brand in Holden showrooms as the budget leader. Nothing radical there; Holden could remain a top-class mainstream brand, while Korean imports, which barely hold their value, can ﬁght using another brand and challenge Hyundai.
Sadly, if this source is right, then this brand-based thinking won’t wash in a company so deeply in the red. Holden itself may be proﬁting, but GM in the States is bleeding—so much so that it canned a lot of the rear-wheel-drive cars Holden was engineering for the parent company. Now Holden has to look to ﬁnd a way to pay for the development work, now that the big Holden-based American cars aren’t going ahead. Management changes at Holden also aren’t helping: they have competent guys, but GM’s losses have no doubt been impressed on them.
The result: if Holden does not look after its brand, expect Ford to trounce it in the years to come. The Focus II is an excellent compact car, the Falcon is looking better than it has been for years, with a six-speed automatic gearbox shared with Jaguar coming, and the Territory SUV—a car I was highly sceptical about—breaking Ford’s own sales’ expectations. Ford may not be making the right moves in some other places, but I’m betting the next few years will be golden ones for it Down Under. permalink
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PS.: General Motors–Holden’s Ltd. of Fisherman’s Bend was near death in the 1980s to the tune of $700 million in the red.Post a Comment
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