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DONCASTER Holden, in Melbourne’s affluent east, has handed back its Holden franchise and is quitting its Doncaster site in a deal with nearby Penfold Motors which is owned by the Johnstone family.

Doncaster principal and CD Motor Group managing director Cameron Doidge told GoAutoNews Premium that the exit from Holden, effective July 1 this year, was triggered by many “underlying issues”.

“It was caused by issues including the size of the site and the market share of Holden that combined, didn’t help the business model,” he said.

“It means we are out of Holden sales and we won’t continue with service and parts either.”

Mr Doidge said Penfold would take over the lease of the Holden site at 825 Doncaster Road and make it a Volkswagen dealership. He said about 90 per cent of staff will retain their jobs.

Penfold director Greg Johnstone said the company will also take over the adjoining Hyundai dealership on the same site as the Holden showroom.

Mr Johnstone said the Holden showroom would be redeveloped for Volkswagen. When completed, he would move Penfold’s existing Volkswagen Doncaster at 584 Doncaster Road to this new location.

CD Motor Group will continue with Hyundai and a Kia dealerships in Ferntree Gully, and a Suzuki dealership in Heidelberg.

Penfold was not expected to continue with Holden after also handing back its franchise in 2015. It took on Holden in 1987 and was the brand’s top-selling Victorian dealer for 10 years.

In 2015, GoAutoNews Premium wrote that “Melbourne’s best-known Holden dealers, Penfold Motors, has reluctantly handed back the franchise to GM because it is unable to reach agreement on a plan to downsize the Holden dealership to meet current sales expectations.”

The report said: “In addition to Holden, Penfold Motors has Mazda and Audi franchises and is opening a Volkswagen dealership in Doncaster. The company handed back the Mitsubishi franchise in 2012 and operates a fast-stock-turn used-car operation from that site.”

By Neil Dowling