Why Holden should stay

The cost to rebrand Holden with Chevrolet would be “a bridge too far”. That’s the view of recent brand boss and industry expert, Justin Hocevar

Hocevar was the MD of Renault Australia until very recently. Under his leadership the importer's sales grew from less than 2000 units (2010) to over 11,000. So, he speaks with some authority when discussing what it takes to build, or rebuild a brand.

Prompted by reader input that GM should ditch the Holden brand, motoring.com.au asked Hocevar for his read on the brand’s future – specifically, whether parent company General Motors should drop the name in favour of Chevrolet.

"Without knowing [GM's] broader brand strategy... I think that they're at risk of throwing the baby out with the bath water, so to speak," Hocevar stated.

"One of the underlying drivers of many people's purchasing decisions is 'a brand I know and trust'."

Hocevar believes that the need for trust in a brand accounts for as much as 25 per cent of the purchasing decision.

"In Australia, Holden is a known and trusted brand, regardless of whatever transition they need to go through now – and that transition is incredibly broad, on many different fronts."

To illustrate how hard and challenging that transition is, Hocevar offered an anecdote pertaining to Holden's local dealers.

"Let's think about the dealer network; there's multi-generational Holden dealers out there who themselves have invested over decades now, to establish Holden's brand values within their local community.

"That's all of those charity nights that they've done, there’s football or netball teams that they've sponsored. It's all of the things that they've done over so many years to win over their local community.

"And the interesting thing is that in regional centres, an automotive dealer – particularly a big-market-share automotive dealer like Holden's – is one of the high-turnover businesses in the community. It employs people, it's generating a lot of revenue, it's often a talking point around the second-largest purchase that people make in their life after their home.

"So if you said to all those dealers: 'Hey, by the way, tomorrow we want you to pull down the lion, we want you to put up the Chevrolet badge and change the corporate identity... and now go out and tell everyone in the community about this wonderful new brand and what it stands for' ... That's a huge amount of disruption that a lot of the dealers would be scratching their heads and saying: 'You know what? I'm a multi-franchise dealer now because you've lost so much market share... I'm going to turn my attention elsewhere'."

Hocevar's explanation of how loyal dealers might feel about GM rebranding from Holden to Chevrolet in the light of falling sales suggests the Holden brand is damaged.

That may be so, he says. But it's easier to fix a damaged brand than build one from scratch, as would be the case with Chevrolet, he says.

"I personally don't think it's that damaged. I think they've got a difficult transition to make... They can obviously steer to adapt the things that people are rejecting at the moment, or don't like about the brand at the moment, and they can work on those.

"But I'd rather work on a few attributes than all of them."

Brand values start with people, says Hocevar – and there's a lot of people employed by an organisation selling over 80,000 cars a year in the local market.

"If they want to go out and educate from top to bottom, nose to tail, an entire organisation, around the new brand values – the Chevrolet brand values – and how to deliver upon them and what they mean, it's a huge undertaking.

"And I can't help but think it would be met by a fair amount of rejection, because there's some very long-term passionate people [at Holden].

"An example could be a service adviser. Can you get all the service advisers in the dealer network to all of a sudden start [marching to the beat] of the Chevrolet drum and to just cast aside their decades of passion, experience, commitment and discretional effort for the Holden brand?

"I just think [rebranding] is a bridge too far."

Hocevar believes the next few years for Holden will be demanding as it is, without throwing in the added complexity of brand reinvention.

Hocevar feels that Holden's iconic Aussie stature and its 'last domino to fall' withdrawal has left it an easy target for critics.

"Perhaps Holden's getting a lot of the sour grapes and negativity that should really be directed towards the demise of the overall automotive industry in Australia and the real reasons behind that... Given that they're last to go, given their product portfolio is in 'fruity' shape at the moment, given that they haven't come out with a clear strategy to say: 'this is where we're going', that's probably what's drawing out most of that vitriol..."

In the main, the vitriol is coming from 'enthusiasts' and 'influencers'.

"I think that there's a bunch of enthusiasts that know about Chevrolet," says Hocevar.

"But I would say that the broader public... probably couldn't tell you anything about the current [Chevrolet product] portfolio – what the brand stands for, its price positioning or anything else.

"I suspect that most people's understanding of the Chevrolet brand would be a historical reference point that really goes back a long way...

"At a real enthusiast's scale, there are those people who will pull the Holden badge off and stick a Chev badge on... [But] they're really a miniscule [number]. I'm talking probably 0.1 per cent of the buying market.

"They're an influential bunch of people, because they're passionate about cars and they probably speak pretty broadly about them... so they've got an audience. But at the end of the day, they're not going to have the reach and influence to tell a compelling story to the mainstream purchaser of not just emotive products, but also products that are servicing purposes in current industry segments – small SUVs, light SUVs, pick-ups, et cetera."

Hocevar feels Holden is on the right track. This week, it will reveal Equinox, its replacement for the Captiva, an SUV unloved by enthusiasts but popular with buyers.

"The biggest segments now are medium and large SUV. To be a significant player and to support the dealer network they've built here in Australia, they [Holden] need solid products in those segments."

Holden's large SUV candidate will be the Acadia, which is due here around the middle of next year. Both Equinox and Acadia are very different from the much prized Chevy Camaro many fans would like to see here, imported by the factory to battle it out with Ford's Mustang.

"A Camaro may not be a significant brand shaper to help influence consumers that are buying medium and large SUVs," Hocevar cautions.

"It will help [Holden] if they want to do a sporty version [of an SUV] perhaps, but most people are really not that interested in buying [sportier models]. Particularly a large number of female buyers, or family buyers... They're not looking for those attributes."

Hocevar says change for the sake of a uniform global brand would not be one GM makes lightly.

"Perhaps globally, the parent company would say: look, it's time for us to have one global brand; it's going to take us time to communicate one global-brand image and to have shared product portfolios and find efficiencies and economies of scale through centralised production of creative – all the advertising materials, et cetera – but by doing that we can save money... spend less on production and more on various different markets to tell our story...

"If that's what the central 'parent' entity wanted to do, so that they could badge products that they source from all over the world, under one brand – that makes perfect sense.

"But that's a long slog, and they would fully understand just how long [and how much money] it would take to do that."