Holden Cruze set to overtake Commodore in 2012

The Holden Commodore’s 16-year reign as the country’s top-selling car – the longest winning streak in Australian automotive history – is likely to come to an end next year.

But there’s every chance a Holden will still be on top of the car sales charts with the ramp up in production of the Cruze sedan and hatch.

Motoring.com.au understands Holden is planning to scale-back production of the Commodore in 2012 in anticipation of weakening demand during what will be the vehicle’s sixth year on sale.

When Holden unveiled this generation Commodore in 2006 – before the Global Financial Crisis and the swing to more economical cars – an all-new model was expected in five or six years, according to the then managing director, Denny Mooney.

Holden executives today say publicly “customers will decide” which is Australia’s top-selling car next year, however privately Holden has already locked away production plans for at least the next 40 weeks – almost a full year – and, as per normal, has given order forecasts to component suppliers.

Holden would not disclose to the media whether its planned production output next year favours the Cruze or the Commodore. But it did say the forecast production of each model can be adjusted marginally about three months in advance.

During a phone conference with Federal Industry Minister, Senator Kim Carr on Monday, the sales and marketing boss of Holden John Elsworth said Holden would sell a “similar” number of Commodores and Cruzes next year – but would not be drawn into which would be the top seller among the two.

“We want to build the number one and number two [selling] cars in Australia. At the moment we build number one and number five,” he said. “We are absolutely committed to making cars in Australia. What we make will be determined by what the market wants.”

Sales of large cars such as the Holden Commodore have been in steady decline over the past decade as buyers have shifted to small cars, soft-roaders and crew-cab pick-ups.

In 2011, the Holden Commodore has faced its biggest battle in the history of the nameplate. It has swapped the lead swapped six times with the Mazda3 and has also been beaten by the Corolla to the top of the charts on three individual months.

With two months of the year remaining, the Commodore is only a few hundred sales ahead of the Mazda3 – 34,995 versus 34,624 according to VFACTS data from January to October 2011.

Mazda Australia has said it would not discount cars in an attempt to claim top-seller status. Last month the managing director of Mazda Australia, Doug Dickson, said he’s “not going to die in a ditch” if the Mazda3 doesn’t outsell the Commodore.

“I know it sounds a bit trite but we don’t see that as something that will help us,” he said. “If it happens that’s great but it’s not something that we actually set out to do. It’s not that important for us.”

In October, the top-three selling passenger cars were small hatchbacks or sedans: the Toyota Corolla, Volkswagen Golf and Mazda3. The Golf had its best month on record thanks to sharp drive-away deals that ended on October 31, and which prompted some dealers to register cars to cash-in on the incentive before it expired.

The Cruze ranked fifth but will get a lift next year with the arrival of a hatchback model, which typically accounts for 58 per cent of sales in the segment.

Holden has launched the new Cruze with a promotional price of $21,990 drive-away for the sedan or hatch. New for 2012, all models – sedan and hatch – now come with voice activated Bluetooth phone connectivity and changes to the suspension to improve ride and handling.

The Holden Cruze sedan went on sale in Australia in June 2009 as an imported vehicle from Korea. But with $149 million in taxpayer assistance from state and federal governments, the sedan went into production at Holden’s factory in Adelaide in March this year and the hatch came on line locally this month (November).

The Cruze’s addition to production capacity has enabled Holden to add a second shift, 300 jobs, and improve the viability of its local manufacturing operations. Holden says it will build 100,000 cars this year, the highest annual output since the GFC, but still at least 50 per cent short of its peak of 165,000 units in 2004.

More than half of the parts that make up a Cruze are sourced from overseas but Holden says it is gradually increasing the number of components sourced from local suppliers.

Meanwhile, a survey by Holden revealed 30 per cent of owners of the original, Korean-built Cruze thought it was made in Australia.

But since local production began, Holden says its research found 92 per cent of Cruze buyers know it is now made in Australia – and 75 per cent of Cruze buyers said it was a factor in their purchasing decision.

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