Ken Gratton•21 Aug 2013
NEWS
Hopes fade for Holden to sell Opels
The lion brand may flog off remaining Opel stock through its dealer network, but after that...?It's now well known that Opel officially closed down its Australian operations with effect from August 2, but the sudden end to the GM brand's sales here raises more questions than it answers.
What's happening with the remaining Opel inventory here, for a start? What of Zafira (pictured), the people mover that was due to be launched during the week after the announcement was made? How many of the stillborn MPV are in the country and what is the degree of difficulty involved in offloading a vehicle that was never formally announced, promoted or advertised?
How about THAT sentence* in the Opel press release announcing the closure – the sentence hinting that Holden may yet again import Opel models wearing the local badging? Where would HSV fit in that scenario? Is there a business case for OPC models being sold through HSV, or Walkinshaw Performance?
And what sort of time frame is involved?
Holden is keeping tight-lipped, but Phil Brook, the company's Executive Director for Sales and Marketing, told motoring.com.au last week that Opel's remaining stock on the ground here may yet be sold through Holden's dealer network. Brook couldn't offer any further details on how that would pan out – and as of yesterday, nothing further had been decided between Holden and its dealer council.
"We're in talks about that," Brook said last week, following the presentation of the new Trax to the local media. That it's still too early for a definitive answer suggests Opel's closure came as a shock to Holden as much as it did for the rest of the market. As we go to press, Opel dealers remain open and you can still negotiate to buy a new Opel model if you wish, according to Michelle Lang, Head of Marketing and Public Relations for the brand. It's a "slow process" winding down the network, she explained, and much of that process is subject to commercial-in-confidence discussion.
"Bill Mott, our MD, is seeing each of the Opel dealers at the moment – and his priority right now is to sit down with them and talk through the exit strategy and the solutions around that," said Ms Lang. "And I believe that's what's also happening with the Holden dealer council. It's not something that we can really share with the media, because it's commercially sensitive."
One point that Ms Lang could comment on and was willing to emphasise was that the decision to pull the plug on Opel in Australia was not made by the local management team. Certainly the decision wasn't based on the brand's sales, which were comparable with other European importers, in spite of Opel being permitted just 12 months of operation to find its feet.
"The general reception that we've received when announcing that we were closing," she explained, "was 'surely you didn't expect to sell more cars than that in your first year anyway? You haven't even been here a year...'
"So it's not simply a question of [sales] volumes, it's more a question of... getting the required volumes at a price that would give us sustainable profit in the key segment of – the Astra – small passenger. And what's changed over the past six to 12 months, from when we developed the business case and everything behind it is that everybody else is now dropping their prices to a point that just wouldn't be profitable for us. And we don't think that's a temporary thing; that's going to be ongoing, it's just that the entire market is repositioned in our most important segment and basically we can't sell the Astra at... those kinds of prices, without really undermining our profitability, long term."
Ms Lang reiterated that at the Australian end of the operation the intention was to remain in the market for an extended period, and the decision to close down the local arm was made in Germany.
"Absolutely nothing to do with us," she confirmed. "There was no way we would locally have made this decision. We were here for the long haul."
At Holden, Phil Brook is not looking any further than the immediate near future where Opel is concerned.
"Right at this point in time we're just trying to get our heads around Opel and what's going on... It's way too early to be going into that, to be honest," the Holden exec said during a Q&A session at the Trax launch.
The suggestion Holden might take Opel models in future looks like a sop – perhaps aimed at the two multi-franchise dealers in the country selling both Holden and Opel? – rather than a cohesive business tactic. All Opel's mainstream models in Australia were more expensive, but were matched by equivalent Holden models. The Insignia OPC was only marginally cheaper than the new GEN-F HSV ClubSport – yet the HSV boasts a lot more power and presence. HSV insiders have told us quietly that the OPC models have already been written off as additions to the HSV range. Out at Clayton it's felt that they might lose sales of the locally-manufactured cars to the imported OPC line. Or just as likely, HSV will be left with imported stock they can't sell.
If there is one model that might conceivably sell – in small numbers – without cannibalising sales from Holden's existing model range, it might be the as yet untried Zafira, which as everyone will recall was a name marketed by Holden in the past. It won't be tarnished by association with a failed enterprise since it hasn't formally gone on sale through the Opel dealer network – but don't expect big sales in a market that prefers SUVs to people movers.
*"Opel will now begin analysis together with Holden regarding the potential for future Holden-badged niche product, in order to ascertain if opportunities for individual carlines exist."
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Written byKen Gratton
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