A week ago the proposition was speculation. Today it is fact. The locally-made iconic Commodore will be made by Peugeot and, as such, Holden faces the greatest advertising and public relations challenge in its history.
How do you spin that to the faithful?
Holden has been quick to point out that GM and PSA have both acknowledged in writing that existing supply agreements for Holden and certain Buick models will continue, though there was no indication on how long.
“Holden and Opel have had close ties for many years and delivered fantastic vehicles to Australian customers, including the current all-new Astra and the next-generation Commodore due in 2018,” Holden said in a statement.
“We will continue to work closely with Opel and GM to deliver our vehicle plans with excellence and precision. This includes future, new right-hand-drive SUVs like the (US-made) Equinox and (US-made) Acadia that were engineered specifically for right-hand drive markets,” the company said.
PSA will be restricted to selling Opel and Vauxhall models on GM platforms to markets where they are already on sale, with this rule easing only as these vehicles are transferred to PSA platforms.
Nothing changes physically in the short-to-medium term for Holden. The same new Commodores will arrive at the same dealerships next year as planned.
The great variable is perception.
Holden will manufacture its last cars in Australia this coming October, and was already facing a tough challenge to convince the car-buying public that its fully-imported line-up of vehicles, predominantly from Europe and South Korea, were really Holdens.
There is no doubt that challenge just became much harder, both now and into the future.
In the short term, the company will battle a perception that they are selling Peugeots rather than Holdens because that is the line that will be pushed by every dealer from any other brand competing for a sale.
Then there is the uncertainty as to how long the Opel Insignia will now remain as the basis for Holden’s flagship Commodore.
It could be that the new Commodore becomes an orphan car – one refresh around 2020 before being replaced by something on a different GM platform a few years down the track. The punters hate that.
With Opel no longer a direct member of the GM family, Holden’s influence on the model’s future will inevitably be diminished. The V6 version of the Insignia is reported to owe its existence to Holden requesting it especially for the Australian market and GM’s willingness to fund it.
GM president Dan Ammann told GoAuto that “no specific decisions” had been made about whether Holden would source its next generation of product beyond 2020 from PSA-Opel or if it would pick up more product from Chevrolet in the US.
There is a strong case that it is in everyone’s best interests to achieve maximum use of an existing platform. The choice might come down to continuing with an Insignia based Commodore made, ultimately, by Peugeot in Europe, or a Buick Regal based Commodore made by GM in China.
Neither is ideal from a marketing or PR perspective for a company that has long traded on its deep local roots.
Then there is the more general spectre of uncertainty that the GM-PSA-Opel deal, the most recent of several sell-offs and market retreats for GM, puts over Holden’s ongoing operations.
Much is being made of the support Holden has with the GM hierarchy. GM president Dan Ammann spoke to GoAuto at the Geneva motor and said: “What I want to emphasise is we are 100 per cent committed to the business in Australia and New Zealand,” he said. “We have a lot of exciting things in the pipeline and it is going to be a really good period of time for the business down there.
“There are a lot of people inside GM that have a lot of history with Holden. There is nothing we want more than to see the business be successful and prosper down there and we are totally committed to that happening.”
However, anyone with a vested interest would be remiss not to at least consider comments made earlier this week by Mr Ammann’s boss, GM chief executive Mary Barra, who made it clear in a discussion with analysts on the Opel deal that all GM business units will have to pay their way.
“Our overall philosophy is every country, every market segment has to earn its cost of capital, has to be contributing,” she said. “We’re going to keep working to achieve that, either by fixing or taking a move like we did today.”
In fixing its European problem GM has publicly reinforced its goal of profitability over volume while at the same time making the challenges facing its Australian brand, Holden, more difficult.
By Daniel Cotterill
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