GM committed to Holden in Australia

Another year, another Holden MD.

Officially starting within days, Mark Bernhard will be the first Australian to take the reins of Australia's favourite GM brand in 25 years. And importantly, he's worked his way up through GM's ranks to reach this position.

It's likely that Holden's staff and management will be praying for some stability from Bernhard's leadership, following the volatility at the top since the departure of former MD Mike Devereux and the announcement Holden would cease to manufacture cars in Australia.

During the launch of the Holden Insignia VXR last week, motoring.com.au spoke with Peter Keley, the company's Executive Director of Sales, and Sean Poppitt, Director of Communications. The two GM execs shared their views on the way forward for Holden over the next five years, a period that straddles the end of manufacturing in Australia and ends with the first three years of full-line importation for the Holden brand.

Over the first two years, Holden will continue to build and sell the Commodore, an indigenous design built locally, and the Cruze small car. Unlike arch-rival Ford, Holden will continue to produce and sell both cars after the local imposition of the Euro 5 emissions standard (ADR 79/04) from November next year. Ford's inline six is not Euro 5-compliant, which makes it an expensive proposition to keep in production beyond October 2016.

Keley says that Holden is yet to determine precisely when production will cease at the Elizabeth plant in South Australia, although it will be sometime during 2017. The new emissions standard may not have much of an effect on the end of production date for the Commodore and the Cruze hatch/sedan.

"Our engines are global engines, be they four-cylinder or V6, they're both global engines," says the Holden exec. "Euro 5 is a factor; it doesn't necessarily become an absolute definitive thing, because it's not a matter that it's impossible to make it comply; it just comes down to, again, the business case and the investment, versus the sales, versus where you are in the rest of your product cadence around replacing vehicles as well. There's a few things in the mix there..."

Holden is a name strongly associated with manufacturing GM products in Australia. During his term leading Holden, Devereux told motoring.com.au that ending the Holden brand for GM products sold in Australia was a possibility once the company became a full-line importer. That idea has now been canned.

"GM is 100 per cent committed to the Holden brand. It's one of the strongest brands in the country. In terms of unaided brand awareness, it's right up there..." Poppitt said last week.

"We're changing the Holden brand from 'Australia's car company' to 'the car company that knows Australia the best'. That's what the whole gist of everything is," Keley noted too.

In one sense, Holden may no longer mean 'manufacturing' after 2017, but it will continue to be a brand flying a flag for GM products that are specifically tweaked for the Australian environment.

"There will be tangible proof points along the way," Keley continued. "We will bring in cars that we know will [suit] the Australian consumer. We've talked previously about tailoring them to the Australian market. So it's not just taking off the shelf and hoping and praying it works in the Australian market. It's actually taking the product, understanding what we still need to do to finesse that product the consumer needs here – and get into it."

Asked what would be the advantage to dropping the Holden badge in favour of Chevrolet, Keley explained it in dollar terms.

"You'd save a million dollars per car on not having to [make] a front fascia, and a million dollars per car on a global platform is chicken feed. There's not a lot of advantage."

All the same, it's hard to imagine a Chevrolet Camaro (and even harder to imagine, a Corvette) wearing a Holden lion badge on the front. With rumours of one or the other Chevy sports cars entering the local market through Holden's dealer network, the question has arisen as to whether these cars would be badged as Holdens, or as Chevrolets. Keley believes that the two sports cars are so iconic they need not be badged as either Chevrolet or Holden in Australia.

"Both the Camaro and the Corvette... their brand names are more powerful than Chevrolet. Everyone knows exactly what they are; whichever one is chosen, they'll be in the Holden showroom, and Holden will be the destination to come and buy that vehicle."

That's the theory, at least. But what will be the practice? Would either car be physically badged Holden?

"We haven't made any particular decisions around that at this stage. The emphasis would be on the [model] name: Corvette... Camaro," Keley replied.

The end of Chevrolet as an international brand in Europe – with a concomitant impact on production at GM's production facilities in South Korea, does not have a significant impact on Holden, Keley says.

"We will continue to source cars from Korea, Thailand – and we'll continue to source cars from the US as well."

Would GM's plants in South Korea build Opel designs (Astra versus Cruze, for instance, or Mokka instead of Trax) for the Australian market?

"It depends on the economics and overall demand of things like that," Keley replied. "At the end of the day, an Opel Mokka comes from Korea; so it's an Opel car, Opel design language, Opel features and performance – and it comes out of Korea.

"It's less about where the car comes from, than that they're General Motors cars. People seem to get a bit hung up with GM about where cars come from. No one asks Mercedes or Volkswagen where their cars come from.

"We're going for the best cars we can get for the Australian market. If it happens to be an Opel-sourced vehicle, great, if it happens to be a Chevy-sourced vehicle, great. It's not being a slave to it. If we become a slave, then we lose the flexibility of what Holden's about."

In essence, that flexibility allows Holden to target different buyer types. Holden can theoretically draw in budget buyers, semi-prestige buyers and performance/sports buyers. Keley doesn't couch it in those words exactly, but the sales boss is confident that the company is overcoming the initial confusion that arose in the period after announcing the end of manufacturing.

"We're at a point in time where we now know exactly where we're going; we're focused on a growth strategy, which won't be some sort of meteoric rise. We have our plans in place, we're meeting our [sales] targets, we're meeting our business plan – and that's what's important to us.

"For the moment, we'll give you a couple of hors d'oeuvres – the GTC, the VXR and Insignia today.

"Then in January, with the new Spark, we'll start with the entree, and then we'll build up. Each step's a very deliberate step.

"When we first announced closure... [it was] new ground. We [made] certain assumptions about what was going to happen, but... it took us a little while to really come to grips with what was really happening – the true public reaction to it...

"We're past that. We're now in a very stable period. One of the things that you can judge how a distributor or manufacturer is going is the amount of inventory that they're carrying... 'cause sometimes your eyes are bigger than your stomach. Our inventories are, and have been for some time, in an absolute first-class state. I don't have an inventory problem on any car line, dealers are actually growing their order banks, so our business plan is on track.

"That's why I speak very confidently about where we're going in future."