GENERAL Motors, by withdrawing supply of vehicles, is forcing the closure of Holden Special Vehicles in a move that will see HSV dealers losing that business without any compensation at all.

In a series of online conferences with dealers this week HSV is saying that it will no longer be supplied with vehicles for RHD conversion and therefore there will be no vehicle for HSV to distribute in Australia.

Under the terms of the HSV dealer agreement, HSV has the right to terminate its agreements with dealers if GM stops or changes supply of HSV with vehicles.  GM has now said that it will no longer supply HSV with vehicles to convert and therefore HSV is exercising that clause in its dealer agreements.

This allows HSV and by default, GM, to pay the HSV dealers no compensation at all. Under the settlement with dealers for compensation for the loss of the Holden franchise, dealers were paid on the basis of the volume of cars they sold in 2019.

GoAutoNews Premium has been told that volume did not include HSV sales.

GM is now setting up a completely new GMSV network. The HSV conversion role remains with the Walkinshaw Automotive Group but the retailing of the vehicles from Walkinshaw passes to GMSV, a wholly-owned GM company. This arrangement was announced last Monday.

In this week’s meetings Holden has told the HSV dealers that GM, which had already stopped supplying Camaro to HSV, would now no longer be supplying HSV with Silverados for HSV dealers to retail.

The conversion of the Silverado will continue but for GMSV. Next year the Corvette will be added to GMSV but that will be built, ironically for a company that says it out of the RHD business, in right-hand-drive.

So HSV is now asking its HSV dealers to mutually agree to end their HSV dealer agreements without compensation.

However HSV dealers will be able to sign up for a parts and service agreement to provide ongoing support for HSV owners.

From there, GMSV will approach HSV dealers to see if they want to be a GMSV dealer. If they are interested, the dealer will be sent a prospectus and then they may apply for a dealership. If their application is accepted by GMSV, the dealer will be sent a dealer agreement to review and if they sign they will be appointed a GMSV dealer.

There is no guarantee that a dealer will be offered a GMSV dealer agreement.

The new dealer network is expected to be in place by the fourth quarter this year.

One curious side of the arrangements is that HSV dealers are being told they must return any deposits they have taken for the new Corvette.

Many dealers are holding around a dozen deposits of about $5000 each but those deposits were taken under the HSV business which will no longer exist.

So dealers have to send the money back to those who paid a deposit and the interested parties will be directed to a new website to register their interest in the Corvette. GM Holden says the return of the deposit will in no way jeopardise the chances to a buyer securing a Corvette.

Meanwhile, the change leaves dealers with remaining HSV cars to sell but no brand umbrella from which to sell and no assistance to clear the aged stock of Camaros that most dealers have.

Holden dealers are still holding significant numbers of Camaros, some of which have retail prices as high as $180,000 each but are selling for $135,000 online. The Camaros were sold to dealers through HSV and are not part of the GMSV operation.

Dealers were told that the 2SS Camaro would retail from $80,000 but they were urged to order, price-unseen, examples of the top line ZL1 model to make sure of supply and months later were shocked to find that the ZL1 was twice the price of the entry level 2SS.

Many HSV dealers are looking at this track record which they say will weigh heavily on their minds before they sign on for GMSV.

By John Mellor