Holden responds to Pontiac announcement

The news that GM will close the Pontiac division comes as no surprise. Pontiac, a slightly upmarket alternative to Chevrolet, has been on death row for some time.

Formerly GM's North American performance division, the company employed slogans like "We build excitement" and, more recently, "Pontiac is car" -- leading one on-line wag to observe that "car is dead".

Far from the days of the original GTO and the Firebird 'pony car', Pontiac's brand image had suffered from years of controversial products like the Aztek -- and the Holden Monaro-based GTO. Credible whispers from the US began to leak out on Friday of last week (more here) concerning an official announcement that the brand would cease to exist.

Now that GM has made it public that Pontiac will close its doors from the end of next year -- with all that implies for Holden's export of the Pontiac G8 to the US -- the Carsales Network sought comment from Holden's National Media Manager, Scott Whiffin.

"GM intends to eliminate its Pontiac brand from the end of 2010 and continue with the four core brands of Cadillac, Chevrolet, Buick and GMC," Whiffin confirmed.

"GM is having to make some tough decisions as part of its viability planning in the wake of the Global Economic Crisis and this is unquestionably one of those tough decisions.

"There are direct implications for Holden in this and specifically our Pontiac G8 export program.

"We will work with Pontiac to manage the phase-out of the G8 through to the end of next year. The announcement has only just occurred so we don't know what their expectations might be, as the car is currently selling really well."

That said, Whiffin was doubtful that Holden would ship any more G8s to the US in light of the announcement. Chances are that dealer stock of the G8 will run out well in advance of Pontiac ceasing operations.

"Certainly I don't think there are any plans at this stage to put more stock on the ground over there," Whiffin agreed.

In spite of critical acclaim from the American motoring press, the G8 had been a slow mover in the US market until the recent implementation of a sales incentive program. That program boosted sales of the Australian-built car to levels originally forecast prior to the recent oil shock and the subsequent Global Financial Crisis. Sales of the G8 may have also picked up since fuel prices have returned to reasonable levels and there's another possibility to explain the upturn in G8 sales: collectability.

With word floating around that Pontiac would follow defunct GM brand Oldsmobile into the annals of history, buyers may have rushed out to buy the G8 while the opportunity remained. As far as Holden is concerned, both the G8 and the previous GTO programs have been useful training exercises.

"It is true to say we're disappointed the G8 program is coming to an end -- it is a great car that has been exceptionally well received and reviewed in the US," says Whiffin.

"It's worth noting that we shipped more than 36,500 G8s to North America in 2008. Our focus now is on finding new markets for what is a world-class vehicle in addition to continuing to export cars to Asia, Africa, Europe and the Middle East."

Sources have suggested that the Commodore could return to North America badged as a Chevrolet, but that's by no means certain to happen. In other markets, the Commodore is sold as the Chevrolet Lumina, but the 'Lumina' nameplate is tarnished by association in the US with an older front-wheel drive car that isn't fondly remembered. Chevrolet already offer two cars that bracket the Commodore in size: the Malibu and the Impala.

Both vehicles are front-wheel drive and rear-wheel drive cars are traditionally a hard sell -- particularly in the 'snow belt' states and Canada. For the time being at least, Holden is likely presuming that the North American market is closed to exports entries. Plainly, there'll be some considerable impact on Holden's production output without the G8 to sell in North America.

"G8s are assembled at our plant at Elizabeth SA where we have been modifying our production volumes and we will continue to do so," says Whiffin. The key words there are "continue to do so", but Whiffin believes that jobs will remain safe at Elizabeth.

"Notwithstanding the fact that this has only just been announced, we don't envisage there will be any job losses at Elizabeth as a result of this decision."

We asked Whiffin for clarification. Had Holden seen this coming and adjusted the VE Commodore production accordingly (more here), ahead of the announcement?

"Not at all," says Whiffin, who outlined the scope of the new situation, reducing output in line with demand and effectively easing production planning difficulties for suppliers, while allowing workers to plan their lives better.

"The existing pattern is month-by-month, two shifts, two crews. We're shifting to a two-crews/one-shift arrangement.

"[That decision] was made, 'A', to protect jobs and, 'B', bring more continuity into the way we're [building cars]."

Whether intended or not, Holden's production balance has been tailored to suit the new world order, post-global financial and economic crisis -- and post-Pontiac.

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