General Motors is giving up on Holden, the Australian-based century-old maker and distributor of cars mostly for GM, choosing to focus on its specialty vehicle business.
“I’ve often said that we will do the right thing, even when it’s hard, and this is one of those times,” said Mary Barra, GM Chairman and CEO. “We are restructuring our international operations, focusing on markets where we have the right strategies to drive robust returns, and prioritizing global investments that will drive growth in the future of mobility, especially in the areas of EVs and AVs.”
The company cited exploring several options before concluding that it couldn’t overcome the challenges of the investments needed for the fragmented right-hand drive market, the economics of growing the brand and delivering an appropriate return for its shareholders.
“At the highest levels of our company we have the deepest respect for Holden’s heritage and contribution to our company and to the countries of Australia and New Zealand,” said GM President Mark Reuss, who headed Holden for GM from February 2008 to September 2009. “After considering many possible options – and putting aside our personal desires to accommodate the people and the market – we came to the conclusion that we could not prioritize further investment over all other considerations we have in a rapidly changing global industry.”
The move means the end of Holden design and engineering operations in Australia and New Zealand by 2021, and the closing of its sales distribution network. The company also announced plans to sell its Rayong manufacturing facility in Thailand and withdraw the Chevrolet brand from that market by the end of 2020.
The company cited low plant utilization and production volume forecasts, meaning that it couldn’t continue building domestic products and making Chevrolet uncompetitive in the market.
“These are difficult decisions, but they are necessary to support our goal to have the GM International region on the pathway to growth and profitability,” said Steve Kiefer, GM Senior Vice President and President of GM International. “GM is well positioned in our GM International core markets: South America, the Middle East and Korea.”
The announcements, which are projected to cost GM $1.1 billion US over 2020, follow the announcement last month that GM would sell its Talegaon manufacturing facility in India and restructure its Korean operations, as it withdraws production from Asia, moves production to South American operations and concentrates on distributing high-end niche products in Japan, Russia and Europe.
“We will continue to implement these critical business strategies, while delivering a dignified and respectful transition in impacted markets,” said GM International Operations Senior Vice President Julian Blissett. “In markets where we don’t have significant scale, such as Japan, Russia and Europe, we are pursuing a niche presence by selling profitable, high-end imported vehicles – supported by a lean GM structure.”
GM committed to supporting customers in affected markets by honouring warranties, servicing and parts availability, and work with governing agencies in dealing with recalls and safety issues.
Australian-based Holden started in 1856 as a saddlery company, began marketing cars in 1908, including the Ford Model T, joined GM in 1931 and over the years badge-engineered cars for Chevrolet, Isuzu, Nissan, Opel, Toyota and Pontiac.