GoAutoNews Premium has been told that the move came about as Holden proceeded with a plan to significantly reduce the number of Holden dealers in Adelaide.
Plaza Holden has been located at Valley View in the north east of Adelaide since it was built by GMH but Holden has earmarked the PMA for consolidation.
As of this week, the Plaza Holden premises are now the only stand-alone single franchise Haval and Great Wall dealership of the eight dealers for the up-and-coming Chinese franchise so far appointed in Australia.
After a trip to China for the Beijing motor show earlier this year, Mr Torcaso visited the Haval/Great Wall operations and secured from Chinese management exclusive rights to sell Haval in Adelaide for five years and exclusive rights to sell Great Wall in Adelaide for two years.
The transition from selling Holdens to the Chinese SUV leader, Haval, which also owns Great Wall, follows a move by Holden management to get Plaza Holden and nearby Peter Page Holden to compete for the rights for a new Holden dealership at nearby Salisbury.
But Mr Torcaso said that the tender process, which was initiated by Holden in 2015, did not guarantee the future for Plaza’s 40 employees and would have involved him in significant capital investment in new facilities.
“Holden told me that I needed to compete with Peter Page Holden for a new dealership in Salisbury that would sell 1100 new cars. It was going to cost us about $12 million to build a 1100 (unit) dealership and I could not make the numbers work,” Mr Torcaso told GoAutoNews Premium.
“I could not see how you could make it viable,” he said.
“My priority is to my employees who have been very loyal to me and I have to look at them first. So I started looking around to see what was available in the market place.”
Mr Torcaso said he was already talking to Haval about putting a showroom on the 16,000 square metre Plaza Holden site. He said that Haval said it would grant exclusive rights in Adelaide if he put Haval in the Plaza Holden showroom and turn the entire dealership over to the Chinese brands.
“So rather than wait until December 2017 when Holden were not going to renew the franchise unless I built a $12 million dealership in Salisbury with no guarantee that I would be selected, I gave them notice when I got back from China this April.”
The Haval/Great Wall dealership was officially opened tonight (September 22).
Mr Torcaso said that having 100 per cent of the Haval market in Adelaide for five years would be better, based on the profit margins on new Holden sales, than sharing seven per cent of the market with 10 Holden dealers.
Mr Torcaso said that until this point, Holden’s plans for Adelaide had not been made public but he said he chose to “go public” when he read in GoAutoNews quotes from Mark Bernhard, GM Holden chairman and managing director, that Holden was committed to it’s 230-strong dealer network despite the brand’s declining market share.
Mr Torcaso issued a press statement saying that Mr Bernhard was wrong. He said that he was concerned that Mr Bernhard’s comments were not consistent with what was actually happening on the ground with Holden dealers and that Mr Bernhard should be called on it.
However, Mr Torcaso agreed that consolidation should take place.
He said Holden was setting itself up to sell 50,000 to 60,000 units a year “and they don’t need 235 dealers” to achieve those numbers.
“Holden is trying to reduce dealers. That makes sense. But instead of targeting dealers who have not been performing, they are selecting dealers who have been Holden grand masters and performed and invested in the brand year after year.
“Less than three years ago we spent millions of dollars in Plaza Holden.
“We spent $4.5 million in Metro Holden. We have been grand masters at Metro for about 20 years and master or grand master at Plaza for some years. We spent another $4 million after the GFC,” he said.
Mr Torcaso said that he believed Holden management lacked understanding of their dealers and the nuances of their local markets and said that neither Mark Bernhard nor Peter Keley, executive director of sales, had ever visited his Holden dealerships.
“Instead they are relying on an Urban Science report from 2006 to make decisions on where dealerships should be placed rather than looking at the loyal customer base we have build up in Adelaide.”
Mr Torcaso said that, to his knowledge, Holden has not found a dealer to build the Salisbury dealership.
Mr Torcaso’s association with Holden goes back four decades. Mr Torcasso owned Bay Side Holden in Frankston in Melbourne’s south from 1976 before moving to Adelaide in 1986. Plaza was a Holden dealer for close to 30 years. He still owns Metro Holden in Thebarton just west of the Adelaide CBD.
Meanwhile, Nick Walker, the marketing manager of AutoGuild, the operator of the Torcasso group, told GoAutoNews Premium: “It is a very exciting deal that Jack has struck the deal with Haval and Great Wall and we are all very keen to make it work.
“We know what we have to do to sell these cars and that’s get bums on seats. If we can get bums on seats we think we will do quite well.
“Haval have eight dealers now and we are looking to be the flagship of their dealerships.
“We are the only one which is not adding a Haval dealership to an existing franchise dealership facility so we are going to be purely a Haval and Great Wall dealer out of those premises. So we are very confident that it will be better and more profitable than Holden,” he said.
When approached for a comment, GM Holden told GoAutoNews Premium that the company did not discuss matters relating to individual dealers.
By John Mellor
Haval H8
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