Holden will sell cars in Australia beyond 2017

When we heard about Holden's plans to shutter its Australian plants after 2017, we didn't know quite what to think. The General Motors subsidiary was cagey when it came to details, claiming that the brand would remain a presence in Australia -- even maintaining its design office there. Oddly, we couldn't get anyone to say, in black-and-white terms, what vehicles would be sold there under the Holden name after its plants close.

The automaker's recently launched “We're Here to Stay” campaign seems to have cleared up some of the fogginess that surrounded the original announcement. For one, we know that our brothers and sisters down under will still be able to waltz onto a dealer lot after 2017 and drive away in a brand-new Holden -- at least if everything goes according to plan. Getting the Holden you own now serviced won't be a problem, either.

Yet what Holden claimed a few weeks ago -- that it will build no new cars in Australia after 2017 -- remains true. 2,900 jobs will be lost. The fates of Australian-built cars like the Commodore remain uncertain. And that's got to sting.

Having experienced the death of numerous American automotive nameplates in the past decade, we totally understand that a lot of Aussie enthusiasts are feeling disappointed -- betrayed, even -- by the news. That the Australian government has been subsidizing money-losing Holden to the tune of hundreds of millions of dollars a year can't help. Still, their explanation of why domestic production will end is tough to argue with:

“A raft of economic drivers have worked against continuing to manufacture vehicles locally. Australia's automotive industry is up against a perfect storm of negative influences, including the sustained strength of the Australian dollar, high cost of production, relatively small domestic market and arguably the most competitive and fragmented auto market in the world.

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Since 2001, the Australian dollar has risen from U.S. $.50 to as high as U.S. $1.10. The appreciation of the currency alone means that at the Australian dollar's peak, making things in Australia was 65 percent more expensive compared to just a decade earlier.

The sustained and unprecedented strength of the Australian dollar, combined with the weakening of currencies of our imported competitors, means importers are at a significant advantage.

In planning for the next generation of Commodore and Cruze models due later this decade, we have looked at every possibility to make those business cases stack up. Unfortunately, there is no viable way to make the numbers work.”

While this decision represents a blow to the struggling (some might say dying) Australian auto industry, it doesn't seem like Holden will have a hard time closing the production gap. We think of the marque as a builder of raw, V8-powered sedans and utes, but the truth is that many of its offerings are already built and sold in other markets as Chevrolets (and Opels, Daewoos and Isuzus). Though Holden claims it won't be replaced by Chevrolet in the Australian market, it already has been, in some sense.

The Holden Trax small crossover, for example, is built in South Korea and Mexico; the Holden Cruze--essentially the same as our Chevrolet Cruze sedan but joined by a hatchback variant--is built everywhere from Brazil to India to Kazakhstan to Ohio. The car should be easy enough to source even after Holden's Elizabeth, South Australia plant shuts down.

And though Holden's publicity campaign does answer a few questions, others remain. Take the Chevrolet SS, a badge-engineered Holden Commodore: Where will it be built after 2017, assuming that it remains in production that long? Will the V8-powered rear-wheel-drive muscle cars Australian hoons love be built overseas and rebadged as Holdens, a complete reversal of the current situation?

Holden fans are going to have to take it a day at a time from here on out. More news is sure to break before the hammer falls in 2017.

By Graham Kozak