Holden Still Faces Grim Future

MEDIA RELEASE - 02/06/2010

Holden’s future as a carmaker is still grim, despite today’s announcement that the bankrupt General Motors won’t be closing its Australian Holden plants, says the car buyers’ Dog & Lemon Guide.

Editor Clive Matthew-Wilson says:

“Holden has said its Australian assembly operations will continue, without really explaining how.”

“Holden hasn’t made a profit since 2004 and fewer and fewer people are buying its only locally-produced car – the Commodore. Holden recently claimed that it was close to making a profit. If so, when will it be paying back the Australian federal government, and why is it still asking for handouts?”

“To build cars profitably in the 21st century, you need to have a very large local market and/or a very large export market and/or very low costs. Holden has none of these.”

“Holden is betting its future on a small four-cylinder Daewoo, to be built in Australia and then sold as a Holden. This is a laughable strategy. Daewoo is currently losing billions building the same vehicle in Korea.”

“Small cars tend to have small profit margins, which is why Holden has always built large ones. It’s impossible for Holden to successfully compete against the Japanese, Thais, Koreans, and above all, the Chinese.”

“Holden’s assembly operations face the choice between a quick, clean end and a long, painful end. The final result will be the same.”

“Australia has to start thinking of life without a car assembly industry, instead of pretending that the house isn’t on fire.”

“If the Australian government simply shared its $6 billion car industry bailout among the affected car workers, these workers could pay off their mortgages or perhaps start small businesses. At least that way the money wouldn’t be wasted. As things stand, the government’s $6 billion is simply paying the bills for a few multinational corporations, while doing nothing to solve the underlying problems.”