Today one of Australia’s oldest car brands (Holden) pulled the pin on one of the longest running nameplates (Commodore) in a dramatic sign that times are changing.
In it’s announcement post, Holden detailed the shift in sales between market segments, highlighting that the large passenger car segment declined by over 87% between October 2013 and October 2019, with private buyers in the segment down by 93% in that period.
While things have certainly changed since the peak back in 2002, where Holden sold more than 178,000 in a year, I think they’re looking at the wrong metric if they want to keep the company alive.
Holden says they have a future after the Commodore, but that depends on successfully competing in the most popular categories today, SUVs. This was a trend that emerged over the past decade and while Holden have product offerings in the segment with the Acadia, Equinox and Trailblazer, these are not stand out products. To really have success in the car industry going forward, you have to think ahead of the game, and that means investing where the market will be in 4 to 5 years (a typical product development cycle).
By the time 2025 rolls around, the predictions are that EVs and combustion engines will cost the same. When that happens, you better have a bloody compelling set of products in the market, or your competition will eat you alive and the company’s future really will be under threat.
Its great that Holden finally recognises they were investing in product categories that were shrinking, but the management have a lot of answering to do, for just how long that took.
Something Commodore did really well over its 40+ year life, was to invoke passionate fans, but now that passion is seen in fans of Tesla, not Holden. Can you honestly get excited about any of their vehicles right now?
Other than the Corvette which is simply an import from parent company General Motors, the rest of their cars are really boring and safe when it comes to design.
By trying to appeal to everyone, Holden ended up appealing to nobody. Sure there’s a few people who still buy Holden for the badge, but that’s not the new generation of buyers, they’re brand agnostic and will happily switch brands in a heartbeat.
Developing a fully electric car is the only play they have at a successful long-term future. That costs billions of dollars of investment and takes time, especially when you’re already years behind. Forget about EVs making up a small percentage of overall sales today, but the time the next product cycle is here, it’ll be a landslide.
The whole game has changed. You now need a charging network, as well as saying goodbye to the dealership model, as EVs need far less servicing and consumers expect to be able to order online. There’s the technology stack that has to be a ground-up rebuild and then there’s the question of where you’re sourcing batteries at scale from.
The best thing Holden could do, is to allow our creative engineers loose and to work with the resources of GM to create a platform that allows vehicles of all types and work bloody hard to have them in market yesterday at an affordable price point. Certainly not easy. This seriously could be a decade of pain for Holden and GM.
While GM created the all-electric Bolt, it’s done nothing to excite the market and we never seen it in Australia. Even their biggest rival, Ford recently announced the all-electric Mustang Mach-E which shows that they finally get what its going to take to stay relevant in the future.
The other piece of the puzzle once you’ve found a way to completely retool and start producing EVs, is autonomy. If you’re behind now, catching up will be insanely expensive at a time where sales, revenue and profit are falling dramatically, that’s a huge ask.
In 2018, the Colorado became Holden’s best selling vehicle with 60,754 units sold. Australia is one of the most competitive vehicle markets in the world, with an insane number of nameplates on offer.
While Aussies love their Utes, tradies, those that tow boats on the weekend will also be eyeing off new entrants like Rivian and that ridiculous Tesla Cybertruck which will land in the next couple of years.
The future survival of Holden is really on the line here, it is absolutely that important. Choose wisely Holden (read: EV), or the Commodore won’t be the last thing that reaches its expiry date.
I’m glad I got to review the 2017 Holden Commodore VFII SSV Redline, it was one of the best they ever made and I remember my time behind the wheel fondly, it may be the last Commodore I ever drive.