Why the Holden Commodore ran out of road
The first clue that the Holden Commodore was in trouble could be seen in broad daylight more than a decade ago.
You only needed to stroll through the vast spectator parking areas at Mount Panorama during the Bathurst 1000 race to notice fans were increasingly driving SUVs, utes and countless other imported cars.
The end of the Commodore’s record 15-year winning streak as Australia’s favourite car – never before has one car continuously led the market for so long – happened before our eyes, we just didn’t take much notice at the time because we figured it would bounce back as it always did.
The sales decline turned into a death spiral once the abolition of import tariffs made foreign cars either cheaper to buy than Australian-made vehicles, better equipped or both. Australians might carry the flag with pride – or even have it tattooed on their body – but we know a good deal when we see one.
With fewer fans turning up to watch the most tribal battle of them all – Holden versus Ford – in the road-going equivalent of the vehicles on the track, it’s little wonder the end was nigh.
Even the most diehard followers found themselves choosing vehicles that better suited their lifestyles – and the buyers who did stay faithful often bought used cars, which did little to help the local Holden and Ford factories.
“It’s a bit like when people fill out their religion on a census form. They tick the box and say they’re religious but the last time they went to church was when they were baptised,” said David Chalke, the principal of Strategy Planning Group, a market research firm that monitors changing consumer attitudes.
In other words, they cheered for Holden or Ford but drove something else – and felt no guilt about it.
There is no one single reason for the demise of the Holden Commodore and the dwindling sales of the Ford Falcon’s replacement, the Mondeo.
The simple explanation is that, since the end of local manufacturing, new-car buyers have continued to embrace SUVs and utes that appeal to our sense of adventure, and small cars that better suit our congested cities and suburbs.
Beyond this sweeping change in buyer preferences, however, numerous other factors contributed to the imported Commodore’s sudden departure after a little more than two years in local showrooms.
One element difficult to measure was the apparent arrogance of Holden as the company ended local manufacturing and switched to becoming solely an importer, like everyone else.
The imported Commodore, from Germany, came with a choice of four-cylinder or V6 power – and there was no V8 for the first time in 40 years – which made it more of a Toyota Camry rival.
At the time, when journalists asked Holden executives how they expected the imported Commodore would stack up against the dull but dependable Camry – the world’s biggest-selling medium-size sedan – they scoffed at their car being mentioned in the same breath.
The thought of a Camry coming anywhere near a Commodore in the sales race was unheard of.
Today, the Camry outsells the Commodore by three-to-one, proving Holden grossly under-estimated their competition.
Hindsight also shows us Holden over-estimated its standing among fleet buyers. One highly visible example: police cars.
Holden (and Ford) had been the primary supplier for police forces across Australia for decades.
Holden wrongly assumed orders for the imported Commodore would be a formality, and so it didn’t make any particular effort to earn that business.
What Holden hadn’t counted on was fleet managers from rival brands licking their lips at the opportunity to win big government deals once the “buy Australian” policy went out the window.
A small number of imported Commodores were sold to police in South Australia, but that was likely due to an underlying sense of loyalty given that Adelaide was the birthplace and final resting place of Holden manufacturing.
The South Australian police car deal was a far cry from the thousands of police cars sold nationally every year. The profit margins are notoriously slim on government fleet sales, but the extra volume could have enabled Holden to negotiate a better factory gate price which, in turn, would have paved the way for a more competitive price for private buyers and business fleets.
In the end, Holden was paying top dollar for every Commodore it imported – and even paid penalties to the German factory for not taking its planned allocation.
In a tragic irony, Holden is poised to push out remaining stocks of the Commodore to NSW Police at distress prices just to clear them off showroom floors. However that deal is too little, too late.
The other contributor to the imported Commodore’s disastrous run was the sudden change in Holden’s marketing image following the shutdown of the local factory.
Holden had built its reputation by wrapping itself in the Australian flag – even though it has been owned by US giant General Motors since 1948 – and now that was gone.
It wanted to padlock the factory gates and leave the premises quietly, but the price of fame meant there was never going to be a discreet end.
Uneasy about the attention it was receiving in the lead-up to – and following – the factory shutdown, Holden embarked on a ‘‘warm and fuzzy‘‘ advertising campaign that effectively turned its back on its Australian heritage and tried to pitch itself as an upmarket European brand.
It backfired spectacularly. Traditional buyers were alienated overnight and people who had never bought a Holden before thought the ads were contrived and came across as “try-hard”.
Holden then created a TV ad to get more people to buy its Colorado ute, by having a hipster drive through a field apparently being chased by a mountain goat. In New Zealand.
Its latest ad depicts a bunch of art thieves making a getaway in Holden’s range of SUVs. It’s difficult to know who the good guys are, and why anyone should buy one of Holden’s cars.
Dealers who spoke to The Age and The Sydney Morning Herald on condition of anonymity believe Holden needs to be more direct in its advertising.
“We need to sell cars, and none of the ads since the end of manufacturing have said simply ‘here’s the car, here’s the price, this is why you should buy one’,” said a veteran Holden dealer. “Instead they’ve got ads with idiots stealing a painting and driving around the countryside. How does that help me sell cars, how does that help anyone know about how much those cars are or how they compare to the competition?”
Another long-standing dealer, also speaking on condition of anonymity because Holden does not allow showroom staff to speak publicly on behalf of the brand, said Holden “tried to change too much, too soon and it got the public offside”.
“People mistook the factory closure for Holden pulling out of Australia altogether when in fact it was simply swapping one Commodore for another,” said another Holden dealer. “But it was too late and the damage was done and Holden dropped off the radar for many buyers.”
Confidential industry surveys that monitor consumers’ “intention to buy” certain car brands showed Holden slipping faster than anticipated.
Following the factory shutdown, almost overnight the number of people intending to buy a Holden in the next year or so dropped from 8 per cent of those surveyed to just 4 per cent.
Unfortunately for Holden, those forecasts proved accurate. This year Holden sales represent just 4.1 per cent of the new-car market.
In the late 1950s and early 1960s, Holden had 50 per cent market share. In the late 1990s and early 2000s it had slipped to a still respectable 20 per cent.
The last time Holden dominated Australian new car sales was in 2002, when it snared 21.6 per cent market share, its best result in the modern era. Toyota has been market leader for the 17 years since and now Holden is struggling to stay inside the Top 10.
Not long after its factory closure, the company decided to not renew the franchise agreements of some of its longest-standing dealers across the country.
Furious over what they felt was a betrayal of their decades of loyalty, the axed dealers simply installed rival brands such as Nissan, Kia, Hyundai and others in the former Holden showrooms. Each of those brands now outsells Holden. It was a monumental own goal.
Indeed, last month Holden was almost overtaken by a lesser brand – Isuzu – which has just two models in its showrooms and half the number of dealers.
With the Commodore gone, the battle for Holden now has shifted from manufacturing cars to one of survival.
HOLDEN BY THE NUMBERS
94,642: Holden Commodore peak sales, in 1998
6000: Approximately how many Commodores will be sold in 2019
1978: The year the first Holden Commodore rolled off the production line
2.4 million: Approximately how many Commodores were made locally, from 1978 to 2017
2020: The end of the line for the Commodore nameplate in Australia
42: The number of years the Commodore will have been sold in Australia when it reaches the end of its run (longer than the Holden Kingswood)
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Source: Thanks smh.com