GM’s continued withdrawal from global markets has taken its next step, withdrawing from Australia, New Zealand and Thailand. What’s left of the Holden sales, design and engineering operation are to be shut down, and the once-storied brand will disappear by next year. Holden’s market share has tumbled to 4.3%, making it essentially irrelevant. GM’s Chevrolet-branded Thailand operations and factory will be sold to China’s Great Wall Motor Co.
This follows on previous withdrawals from Europe and Russia. The plan for some years now has been to exit poorly performing markets, focus on high margin trucks and SUVs in North America and its China joint ventures, and use those profits to fund an ambitious push into high tech mobility, namely EVs and self-driving cars via its Cruise division. GM also is still active in Mexico and South America.
GM CEO Mary Barra continues her quest to remake GM: “I’ve often said that we will do the right thing, even when it’s hard, and this is one of those times,” Barra said in the statement. “We have the right strategies to drive robust returns, and prioritizing global investments that will drive growth in the future of mobility.”
Not surprising, killing the Commodore stripped Holden of any identity it had and the brand has coasted like a zombie since. As far as the “future” of GM I think it would have been less depressing if GM just fully collapsed in 2008 than witness this dystopian nightmare come to fruition. Sometimes dead is better.
GM came out of the 2008 crisis quite good. Uncle Sam (i.e. taxpayer) even made a small fortune out of those GM credits. I was really surprised when I read that numbers. Unfortunately my absolute fav american cars ( Cadillac sedans) do not do well at all and might be axed for despicable SUVs and electri-crap.
Are there ANY sedans doing that well at this point?
Tesla.
Why are EVs “despicable?” They are coming whether you like it or not. I like it a lot because I’d much prefer to buy from my publicly owned utility, which is 98% green energy. It’s much better than paying a foreign owned oil company.
Similar things were said circa 1915, when cars became cheap enough for average folks to buy.
The best part is you don’t have to buy one. You can drive your 10 MPG truck as long as you want, and even buy new ICE cars.
Technically he only said SUVs are despicable, EVs were referred to Electri-Crap… possibly, though that could just refer to the other electronic tech shoehorned into cars these days.
No amount of hype or wishful thinking will ever change the fact that BEVs are a technological dead end. They will indeed be crammed down the market’s throat whether we like it or not, but that cramming will come with a profound loss of the near infinite operational flexibility that comes with the one thing BEVs will never have (and which is universally ignored or dismissed as irrelevant by the fanbois) – practical rapid refueling. They might be cleaner than ICE cars operating on fossil fuels, but they will always be hobbled by mandatory long idle periods.
Yeah! Just like the petrol-powered automobiles crammed down the throats of hapless buyers were never going to be anywhere near as usable or reliable as a proper horse and carriage!
(Don’t look now, but Teslas seem to be selling briskly without any cramming involved…)
Daniel, here in the EU governments DO cram EVs down our throats, and if Sanders wins your election in 2020, I would expect the same thing will happen in the US. EVs can be very useful for reducing overall emissions but only under the right conditions.
I don’t think it’s necessary or appropriate to bring up the U.S. Presidential election here. This really isn’t the place for it. Also, I’m not in the U.S.
I don’t live in the E.U., but I do keep pretty close track of the automobile industry, regulation, and market there (I have to, as part of my job), and as of today nobody’s forced to buy an EV, so let’s maybe dial down the hyperbole about throat-cramming.
GM takes a good business, cuts it back, then kills it for being too small. What that has to do with investing in future products I don’t see. Australians, New Zealanders and Thais won’t be buying electric or self-driving cars?
So much for “Football, Meat Pies, Kangaroos and Holden Cars”.
I am sorry to see Holden go. It was a long serving part of the GM empire (since 1931) and for years was a demonstration of The General’s strength and reach. I also found the cars intriguing from afar, as they seemed to blend American and European attributes into unique products. Many of the Holden cars from the late 1960s through the 1980s looked so much more compelling than what GM offered stateside. (The same could be said for the Australian Ford and Chrysler products from that period as well).
My thought, on reading this headline this morning:
“Wars are not won by evacuations.” – W. Churchill
Subtly paraphrased by Peter Cook as “We didn’t win at Dunkirk just by running away”….
General Motors is just doing what many older corporations do… changing businesses while keeping their name unchanged. Xerox and IBM come to mind as examples as does Rolls Royce (the real RR) who no longer make cars but sell jet engines instead. 3M regularly changes the products it produces, and so on. They make a regular practice of getting out of the unprofitable markets. So, Mary Barry’s approach here is not without precedent.
It is however worth noting that this “shrink your core business and reinvent yourself” meme is not always successful. I think that this excerpt from the International Harvester Corporation story is on point enough to serve as a cautionary tale.
“In 1979, IH named a new CEO, who was determined to improve profit margins and drastically cut ballooning costs. Unprofitable model lines were terminated, and factory production curtailed. By the end of the year, IH profits were at their highest in 10 years, but cash reserves were still too low. Union members became increasingly irate over production cutbacks and other cost-cutting measures. In the spring and summer of 1979, IH began short-term planning for a strike that seemed inevitable. Then on November 1, IH announced figures showing that president and chairman Archie McCardell received a $1.8 million (in 1979 values) bonus. McCardell sought overtime, work rule, and other changes from the United Auto Workers, which led to a strike on November 2, 1979.[6] Soon after, the economy turned unfavorable, and IH faced a financial crisis. The strike lasted about six months. When it ended, IH had lost almost $600 million (in 1979 value; over $2 billion today).[7]
By 1981, the company’s finances were at their lowest point ever. The strike, accompanied by the economy and internal corporate problems, had placed IH in a hole that had only a slim way out. [8] In August 1982 the company sold its Payline division of construction equipment to Dresser Industries, for an undisclosed sum. Things spiralled downwards until 1984, when the bitter end came. “
That keeps the business afloat, but can play hell with your customer base, and kill your goodwill – doesn’t show on a balance sheet, but try doing business without it.
“In 1979, IH named a new CEO, who was determined to improve profit margins and drastically cut ballooning costs….”
Yes, selling off existing business divisions is one surefire way to show an improvement in profits. But after you’re through divesting, then what do you have?
Reminds me of the cartoon showing the CEOs on the ship bridge scratching their heads and saying, “I don’t get it. We cut costs and divested of unprofitable businesses. How come we’re not getting there faster?” Then you zoom out and see only one guy in the bowels of the ship doing the rowing.
Looks like GM is heading going the same course.
> Xerox and IBM come to mind as examples as does Rolls Royce (the real RR) who no longer make cars but sell jet engines instead. 3M regularly changes the products it produces, and so on. They make a regular practice of getting out of the unprofitable markets.
General Electric another good example of that type of company.
Somewhere I have a 3M chess set. I have no idea why 3M was making chess sets, but it’s a really nice one. I’m not exactly sure what 3M makes these days; I know they’re a huge company, huger than you can be by just making sticky notes…
“I’m not exactly sure what 3M makes these days”
Among other things, 3M sells sealants, adhesives and electronic components to the auto industry. Based on the information in this recent press release, the business unit servicing the auto industry represents about 30% of 3M corporate revenue.
https://news.3m.com/stories/3m-realigns-from-five-to-four-business-groups
3M tapes and adhesives are everywhere in a boat shop.
I don’t see how RR fits the situation. They made both cars and aero engines – profitably – for decades, and it was actually the RB211 turbofan that put them in administration.
Was just reading the press release on the SS forums… lots of concern about parts support, which has already been sketchy since the plant shutdown in 2017 (and the GM parts center move debacle). I have 72K on my ‘17 and it’s been the most reliable car I’ve ever owned, discounting the dated infotainment hardware. Glad I got it when I did – the auto landscape has sure changed quickly since even a few years ago.
The world is a less interesting place as the automotive industry consolidates and homogenizes. I hope Citroen stays weird and re-enters the US.
+1
Peugeot is planning the re-enter the US, which is good as far as it goes IMO. I don’t think Citroen has any plans to do likewise.
It was an inevitability, but its one that still stings a bit. I’ve thought that some of these cars could’ve done really well over here, especially in place of some of their American analogues we got inflicted on here.
I’m wondering about the long-term viability of GM. Us Aussies had thought they’d sell us Chevys and Caddies when they pulled the plug on Holden production, but if they can’t afford to build cars in RHD at all, just how bad are things? I mean, everybody else seems to afford RHD production just fine.
It’s a weak excuse with zero relevance. GM seems to think that they will be able to remove the steering wheel entirely and have everyone cruise around autonomously. Well, if they remove the wheel and think the shift to autonomous will happen quickly, then there’s really no reason to abandon markets that drive on the other side, right?
GM is just going to be in two markets soon enough, North America (which includes Mexico) and China. Eventually probably China only although their sales are down significantly over there as well. GM thinks they are joint venturing with Chinese makers, when it’s possible that they will get swallowed up by their “partners” and not be in charge of anything anymore.
The irony is, for the pretty unanimous distain for Bob Lutz by many here, I distinctly remember him predicting autonomous pod cars in GM’s longterm future in some interview years ago. Doesn’t get any closer to fruition than yanking the steering wheel
My first thoughts upon reading this were that GM will retreat to North America and China, and within ten years the company will simply be known as “Chevrolet” (with maybe some badge-engineered ‘Buicks’ in China)… all the while singing the praises of “strategic restructuring” and other catch-phrases.
And if GM is putting all of its eggs into just a few baskets (US, China, autonomy, for example), it becomes highly susceptible to downturns in those few markets. For example, with a diminished global presence, what happens to GM when China hits a recession… or if the company’s own autonomy ideas fizzle out? Quite likely, total collapse.
I am pretty certain fully autonomous vehicles will never take over, for the simple reason that any autonomous system will be the criminal’s and the terrorist’s heaven – hack into it and you could implement all manner of extortion and mass terrorism schemes. None of this is possible when a human being is in control of the vehicle.
The fundamental reason for the coming of this day is globalization and trade liberalization, good bad, or indifferent as one’s attitude to that concept might be.
From the first Holden ever made, the entire local industry was utterly dependent upon enormous tariffs and later, quota limits on imports as well. Further, it was outright subsidized with government grants: it seems probable that the industry was never really profitable without these things.
Once the tariffs were slowly removed, as we signed more free-trade type agreements, the subisidisation continued, as most local companies and all levels of govt required locally made cars for their fleets. Fleets made up as much as 80% of Commodore or Falcon sales. The fleets bought at a large discount, they sold on after 2-3 years at little loss, through dealers to private buyers, which is how the vast majority of private sales occurred: essentially, unprofitably, cheaply 2nd hand, excluding V8 and luxury models.
And once the requirement to buy local slipped to user-chooser leases, buyers did not choose local.
Add remoteness, RHD, small numbers, the death of sedans and a highly interdependent system, only one had to fail for all to, and first to go was Mitsubishi in 2007, followed by Ford in 2015. Without them, the supply chain became unviable, the industry lost all government support in a vicious national budget of 2014 (by the current Aus ambassador to the US, btw), and it all folded.
It’s worth noting that Toyota did not want to go, but without suppliers, it was done for. that’s notable because Toyota is a hard-arsed money maker, and it proves the industry COULD have been viable with better thinking than Ford or Holden provided. Their focus was just too narrow, and they did not export.
There were some terrific cars made by Holden, but also lots of dross. Their build quality (and Fords) was never higher than prevailing US domestic ones across the ’60’s to the ‘2000’s, meaning often inadequate by any international standard. Sadly enough, they got it very right in their last models.
Despite the inevitability of this event, I must confess it does feel weird in an irrational way. The brand was a cultural fixture in the lives of anyone now aged 25 to 95. And perhaps that says a everything – under that grouping, the newest generations, it isn’t.
Nicely put Justy
The same could be said about Opel, another GM toss (to PSA). Just when they were making some very decent cars (Astra, Insignia), GM dropped them.
And, like magic, Opel and Vauxhall became profitable under PSA in short order.
The reasons for shutting down production in Australia are one thing, and that happened already in 2017. The explanation for closing operations today is what I don’t see. Everyone imports cars into Australia, why can’t GM do it profitably?
Exactly. But it seems even when GM was importing cars into another continent (Korean Chevs to the EU) and was getting successful at it, it somehow managed to botch it all by withdrawing from the market not to hurt another division (Opel)… which it then sold.
There is in my eyes an even worse sin, namely withdrawing Chevrolet – that is, Korean Chevrolet – from Europe so that it would not steal sales from Opel, just when the brand was starting to gain acceptance here. And then selling Opel. GM could have had a profitable arm in the EU had it persisted, one which would have presented a viable alternative to VAG’s Skoda or SEAT for example. Now it has nothing. Stupid.
Sad to see GM pulling back from the global auto market.
Reminds me how a turtle reacts. When threatened, it pulls in its head.
GM CEO Barra believes future is in EVs and self-driving cars? I don’t see GM making any innovations and technical leads in that area. The Asian auto makers are. Maybe she is thinking, “If you can’t beat ’em, join ’em.”
But she hasn’t heard the one about the barracuda swallowing the big bass has she? I think Jim Klein’s comments are right on.
The Bolt is still near the top of its’ class, got additional range for 2019 but hasn’t been visibly changed apart from new colors since its’ launch. It’s not *that* overdue for a midcycle refresh but the lack of follow-ups on top of dropping the Volt after 2018 makes it look dangerously like GM doesn’t consider EVs its’ *present*.
Bolt’s whole electric drivetrain from batteries to motor comes from South Korea’s LG. GM isn’t learning a thing about how to engineer and produce EV technology from the Bolt. Maybe they’re working in-house on future electric drivetrains but it’s not in today’s production.
Not if it’s snap turtle:)
In the 1960s, Sweden undertook a huge, expensive logistical challenge: they converted their country from left-hand-drive to right-hand-drive, taking four years to change every sign, every traffic light, every bus stop, and many entrance and exit roads. But as a result, Sweden was no longer an LHD outlier surrounded by RHD countries, and mostly having European left-drive cars. I wonder if Australia wouldn’t have ultimately been better off had they done the same thing; it would be much less expensive to export Australian cars to most of the world, particularly the huge EU, North American, and Chinese markets. if they didn’t have to re-engineer them for RHD countries.
Point of clarification: Sweden changed from left-hand to right-hand traffic (position of vehicles on roads). Many of the cars there, for whatever reasons, were already left-hand drive (position of drivers in cars).
I’ve heard two theories about why Swedish domestic market cars were LHD. Which theory is correct, if either, I leave to others.
1. The first cars imported into Sweden were LHD, so the Swedish automakers followed suit.
2. Most Swedish cars were exported to countries with right-hand traffic, so they thought it was simpler to just build LHD cars for the domestic market also.
The one I heard was that it made it easier to see the edge of the road, which can be critical on narrow snowy roads. That’s the reason Italian trucks kept RHD for so long, in order to place the truck at the very edge of the road on narrow Alpine passes and other narrow roads.
As others have said, this move says more about GM than about Holden. Oldsmobile and Pontiac went this route, but it was clearly a case of too many brands. But exiting the Australian (and Thai and NZ markets) just seems short-sighted. Let’s say GM is successful with self-driving and/or EV, and becomes a world leader again. If they want to rejoin these markets, who will remember them or care? It’s like a Fiat, or Alfa or Peugeot coming back to the US. The Churchill quote about winning by evacuation is very apropos. Unless of course, GM’s goal is to become a high margin niche player.
I’m not in advertising or marketing, thank dog (at least not formally), but my sense is Millennials and subsequent generations are more interested in the lifestyle experience being offered and don’t much care about the history of a brand.
Australia’s Rover? Great history, but poor product, declining sales, no export potential, no economies of scale, increasing dependence on others for products…… leading to a devalued brand overwhelmed by competitors with no escape route? Best to admit it and retire with (some) dignity?
This sort of reminds me of Bombardier in canada. In the last couple of weeks they have sold their remaining part of the a220 to airbus and their rail division to alstom. before that they sold off their turboprop and regional jet lines. now all they have left is the business jet line. all after billions in public money was invested. Could see GM selling their truck line to Hyundai/Kia and selling their brand names to a Chinese automaker and the execs walking with their golden handshakes.
Holden as a brand is going its been on the cards for some time now their current lineup is uninspiring a mixture of confusing SUVs nobody actually wants a rebadged pickup and another rebadged Vauxhall car, the brand will be missed but mostly by those who caused its closure those people who will not buy the cars new.
The news was everywhere yesterday here in New Zealand, and is still a hot topic today. Among my friends, even those who aren’t car people were shocked – as my hubby said “But why would they close Holden, they make all those cool grunty cars”. And therein lies the answer: that was who Holden used to be, that was the market they used to serve. The market has largely moved on now – although the large numbers of Mustangs that Ford NZ is selling proves that there’s still demand for the right product at the right price.
Holden did recognise that the market had moved on, and moved with it by replacing the “cool grunty” RWD Commodore with the Insignia-based FWD Commodore. The Insigniadore is a perfectly competent car, but the Commodore name brought history that didn’t suit the new ‘Commodore’. Decades ago when the Commodore was launched, it represented such a departure from its Kingswood predecessor that Holden didn’t carry over the Kingswood name (although they did carry over the dire Kingswood engines).
Would things have been different if Holden retired the Commodore name like Ford retired the Falcon name? Maybe, but with GM selling Opel and Vauxhall to Peugeot, the die was already cast; it was only a matter of time before Holden was sold or died. I’m personally surprised that they didn’t sell the Holden name to Peugeot. After all, Peugeot is selling RHD Opels as Vauxhalls, it would be quite logical to sell them as Holdens too – there’d be enough ‘Holden’ brand equity left, and they could use the existing Holden nee Opel/Vauxhall model names that are well-known here (although they’d still need to retire the Commodore name).
Although I’m not surprised GM is killing Holden, I am surprised that they’re leaving RHD markets. According to Wikipedia, 30% of the world’s countries and territories, containing 25% of the world’s roads, are RHD. That’s a sizeable market to walk away from; but more significantly it means GM is no longer a global player. To me, that is most shocking thing. GM used to be so proud, so mighty, so powerful, so strong. Now they’re a shadow of their former self – and the thing I find most difficult to understand, is that they’ve chosen to do this. Not just this week through killing Holden, but by a decade or two of bad decisions. A decade ago, heck even 5 years ago, Holden Australia was a bright light in the automotive world, just as Ford Australia was. They (Holden, but Ford too) developed and sold the products the market wanted, marketed them very well, and gained tremendous respect as a result. Yes, Ford closed Australian manufacturing too, but they chose to continue selling vehicles that the market wanted – and minimised their brand damage by recognising the talent and skill in Australia and continuing to design and develop vehicles there for the world market. GM could have done the same, but they chose instead to exit the market, walking away from their talented team.
CC has a brilliant series, largely penned by Paul, entitled GM’s Deadly Sins. Selling Opel/Vauxhall was a deadly sin, killing Holden is another. But choosing to no longer be a global player is GM’s Biggest Ever Deadly Sin.
Absolutely so, perhaps their biggest of all.
I wonder if the rumoured PSA buy of the Holden brand was stifled by GM intransigence (in the same way their stubbornness put off any buyers of SAAB)? Surely there’d be a quid to be made selling, say, 10-12K RHD imports from Europe under the Holden moniker. Even perhaps invest a little chunk to put a V8 in the Commodore/Insignia through Holden special Vehicles in Melb? It does have architecture for 4wd, after all. Build up, say, 3,000 per year and sell as an exclusive. There’s a queue of folks prepared to put up $100k for a RHD Silverado or F-150 from that factory, and even if the line didn’t make much $, at least the halo would remain and help sell the rest. Oh well, too late now.
The abandonment of the market, and others, is another thing: it’s plainly stupid.
On my calculations a while back, there’s more RHD cars sold worldwide each year than the entire US vehicle market, about 20 million. The supposed RHD development cost is a straight lie these days: the spectacular software engineering in the planning stages mean it’s just not an issue.
I wish GM luck in its late run to EV’s and autonomous driving, underpinned by sales in the vagaries of a repressive one-party state in China, plus US trucks.
Presumably, their secret strategic plan is codenamed the usual, Operation Myopia. That’s at the heart of every deadly sin they have ever performed.
I suppose we can kiss goodbye the Insignia now, too, sooner or later. The only way it would stay alive is as a Peugeot 508 re-body à 208-Corsa (not saying that’s a bad thing since the new Corsa seems to get quite some positive feedback).
As for abandoning RHD; besides coming across as a cop-out, GM already abandoned the emerging markets of India, Indonesia and now Thailand. I wonder where they do see potential.
Guys, just a thought: if Peugeot needed to engineer a RWD/AWD platform for the Aussie market (and similar other markets) it could do so very quickly – perhaps employing ex-Holden engineering personnel, so that wouldn’t be an issue.
Other than a halo “enthusiast car” I’ve got no idea what a RWD platform would be useful for these days. Not just in Australia. Holden didn’t stop building them because they were overwhelmingly successful.
A sad day. I’m disappointed but not surprised. There’s been seven Holdens in my life, including the current DD. I’ve worked on hundreds of customer cars, fixed mate’s Holdens and now it’s all just memories and photos.
Well, if that’s your DD, I’m a bit jealous. The HQ was a rather flawed machine, and in its most common form (6 cyl, basic), not very nice, but a well-optioned Prem with (presumably) V8 and (hopefully) power steering, in the very pretty form of a wagon, I’ll definitely take it.
Nostalgia is a bugger, no?
Sorry for any confusion. The DD is a Commodore wagon, the HQ is long gone. Was a six, auto and factory A/C. Ended up with a warmed 350, TH 400 and (much needed ) power steering. I got out of old Holdens when I bought my Buick
Nice Premier, the HQ model was Holdens hayday flawed definitely but they sold like beer at a rugby game, the competition wasnt really any better they all understeered badly, really noticeable on Kiwi roads not so much in Aussie,
I was at the Chicago Auto Show and GM didn’t look as good as their competition. We saw some life left with Chevrolet and GMC, but that was it. There is no longer a reason to buy a Cadillac and their display was poorly attended. Buick looked like an attractive has-been. The crowds were surrounding SUVs, not sedans or coupes. Event the Camry and Accord had few lookers. Trucks dominated the show. The American market in Chicago walked away from cars towards gaudy trucks of many sizes and shapes.
I’ve been attending the Auto Show since I could drive. Based upon what I’ve been witnessing over the past decade – cars are history.
At what point did Australia lose its auto market? At what point did those markets simply stopped buying their neighbor’s products? Didn’t anyone care that with every car shipped from overseas, they were selling off their heritage? The “global” market ate Australia and New Zealand and it was the Aussies and Kiwis that just didn’t see it until it was too late to save these brands.
I hope that doesn’t happen here in the US.
I see GM is still trading +$34.00 today though down from yesterday. It still mystified me that people are buying shares at this value. Though perhaps there is profiteering happening here as most owners of these shares did pay more. Hoping for a little rebound and get out is what I’m supposing. I guess time will tell. Always has.
Will the last GM brand *cough Chevrolet cough* please turn off the lights in Detroit when they leave?