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Published 17 January 2013 11:46, Updated 28 January 2013 08:20
The Holden Commodore and its noisy, revved up engine has played an integral role in shaping the Australian motoring industry and car culture for half a century. So its American parent company’s confirmation of its plans to kill off the vehicle by 2016 raises the question: can a company survive when it drops a well-known, much loved brand?
Holden’s decision – confirmed at the Detroit motor show by General Motors Holden chairman and managing director Mike Devereux – was one that needed to be made. Demand for large sedans such as the Commodore and its long-time competitor, the Ford Falcon, has been falling steadily for the past few years as consumers favour smaller, more fuel efficient four-cylinder vehicles and sports utility vehicles as family cars.
But the question remains: Can Holden – a company so entwined with its Commodore brand – remain relevant to consumers?
Holden will need to orchestrate its next moves carefully in the local market, according to the chief executive of retail consultancy Retail Doctor Group, Brian Walker.
“On a global scale, the name Holden Commodore isn’t of great significance,” Walker says. “As a business decision it makes sense ... but from a local perspective it has negative consequences ... there is great brand equity in the local market.”
Changing consumer buying habits will make the transition easier. Commodore sales have gradually declined since the influx of Asian cars in the early 1990s. That, combined with an increasing global marketplace, has led to a more cosmopolitan, aware and educated consumer. “Aspirational European brands are having a great year,” Walker says.
He predicts General Motors will phase out the Holden brand itself, similar to what Vodafone has just done to Crazy John’s.
Holden’s Commodore lost 25 per cent of its sales last year, dropping to a record low of 30,000. The Falcon reported a similar drop as the demand for fuel guzzlers slides. Holden has committed to manufacture locally until 2022 but the type of vehicles it will produce remains to be seen.
The news coincides with Holden’s confirmation that the jobs of 320 workers at its Port Melbourne VS engine facility are at risk beyond 2016 due to the shift in consumers’ vehicle buying habits.
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