The Holden brand will be axed by the end of 2020 after the US car giant General Motors announced it would no longer design cars for the Australian market.
Three years after it ceased production in Australia, GM said on Monday that it would exit the “highly fragmented right-hand-drive market” and “retire” the Holden brand by 2021.
Holden employs about 800 people in Australia, and GM senior vice president Julian Blissett said about 600 of those would finish with the company by the end of June. About 200 employees would remain in Australia and New Zealand working on specialty GM vehicles.
In a press conference in Melbourne on Monday, Blissett said the closure was “an issue of scale”.
“With the global consolidation of the automotive industry, it’s becoming increasingly challenging for us to support a brand and a business that operates in just two markets,” he said.
“In short, GM desperately wanted a successful and sustainable Holden in both Australia and New Zealand.
“We implemented a number of alternative strategies but ultimately GM has taken the decision it’s unable to prioritise the significant investment required for Holden to be competitive and profitable long term.”
Work at the carmaker’s Port Melbourne site will be wound down by the end of June and the Lang Lang calibration facility will finish up in August, he said.
There are currently 185 Holden dealerships in Australia and Blissett said the company would offer a “fair package” of transition support for dealers and suppliers. He said the decision to exit the Australian and New Zealand market, as well as ceasing manufacture in Thailand, would cost GM “north of $1bn”.
Holden shuttered its Australian manufacturing in October 2017, forcing hundreds of job losses. In December it announced that it would pull the Commodore brand from showrooms after 42 years, as well as the Astra, due to dwindling sales.
Holden interim chairman and managing director, Kristian Aquilina, said the company had “chased down every conceivable option” to prevent the closure of the brand.
“We have had multiple rounds of discussions and tried to find a way to defy gravity,” he said.
“But the truth and the hard truth was there’s just no way to come up with a plan that would support a competitive and growing and flourishing Holden and also provide a sufficient return to our investors.”
GM’s president, Mark Reuss, said the company had “explored a range of options to continue Holden operations” but could not “overcome the challenges of the investments needed for the highly fragmented right-hand-drive market”.
“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,” he said.
“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 prioritise further investment over all other considerations we have in a rapidly changing global industry.”