Founded in 1856 as a saddle manufacturer, Holden joined the automobile industry in 1908 and later became a subsidiary of General Motors in 1931. The company went through various name iterations until it became known as General Motors-Holden in 2005.

A brand with strong Aussie roots, Holden is currently fighting a battle of survival. Record low sales, dealer backlashes, and American leadership that’s biased on left-hand drive markets are pushing the first Australian car manufacturer to obscurity.  

In 2018, Holden posted a record low sale of 60, 571 vehicles — even lower than Ford (69, 081 vehicles) which it used to dominate over the past two decades. Some blame this to the influx of Japanese and Korean cars in Australia. But I think there’s still a bigger issue in play here.

What We Can Learn from Holden’s Mistakes

1. Moving Production Offshore

Holden had been manufacturing cars in Australia for almost 100 years when its production plant in Elizabeth, South Australia was closed on October 20, 2017. Like Toyota and Ford, Holden execs wanted to maximise their profits by moving production to cheaper locations, leaving thousands of Australian jobless.

“The end of Holden making cars in Australia is a very sad day for the workers and for every Australian. It is the end of an era…everyone has a Holden story.” – Prime Minister Malcolm Turnbull

While GM’s top management see this as a “smart” move. Australians felt betrayed by taking away a very iconic local brand that had become an integral part of Australia’s national identity.  

Key Lesson: You are in the business of making your customers happy. Brand loyalty is founded on trust. So, never ever betray your customers.

2. No Longer “Holden”  

Part of Holden’s identity stemmed out its lines of muscle cars like the Monaro 350 GTS Coupe (1971), Sandman (1977), Torana A9X (1977), and Commodore SS Group A SV (1988). However, last 2018, the car manufacturer did not release anything with a V8 engine in it — denting their reputation.  

There is no HSV available in a new shape and there is no attraction for loyal fans to talk about their cars. Furthermore, Holden provides no incentives to make a purchase. There is nothing to create engagement with the brand.

As a result, sales dwindled and dealers are fuming in frustration about it. In the first quarter of 2018, the average Holden dealer only sold 26 new cars every month. This is significantly lower compared to a Toyota dealer who sold 85 units a month. Even Mercedes-Benz which is notorious for their high margins shifted an average of 57 cars every month per dealer.  

In 2018, Holden’s market share dropped to 5.3% after being number one in 2002.

Key Lesson: Don’t deviate from your brand identity. This will leave your customers confused. Customers who don’t understand your why will ultimately leave and go to another brand with a clearer sense of purpose.  

“People don’t buy what you do; they buy why you do it. And what you do simply proves what you believe” – Simon Senek

3. Short-Sighted Management

General Motors is more focused on left-hand drive markets with China getting the biggest cut of the pie. So, they designed the Camaro in LHD. When the decision to sell the Camaro to Australian markets came down, the company had to convert the car to RHD — at a steep cost. As a result, the Australian-spec Camaro wears a price tag of about $90,000. That’s ways more expensive than its arch-rival, the Ford Mustang which is LHD-RHD compatible, priced only at $62, 990.  

The Ford Mustang has been a big hit in Australia since it was launched in 2015. In fact, it’s Ford’s second best-seller (after the Ranger).

“We sold 9000 Mustangs last year [2017]. We were between four and five times the volume of Britain.” – Graeme Whickman, Ford Australia president.  

Key Lesson: Your products must be easily adaptable to the demands of your target audience. Always plan ahead.

4. Turning Back from Its “Real” Customers

Who are Holden’s top customers? For years, it’s been the average Aussie who loves muscle cars and business executives who like to have some fun and power at their foot. But recently, Holden’s been eyeing the minority — executives who love European cars — to better relate to “today’s Aussies”. While the intentions are good, the move was dramatic and a business disaster.  

Holden turned its back on traditional Holden buyers — the segment of the market who are most likely to give Holden’s import-only form a chance. Although there is a market for these executives they are now targeting, these buyers are generally looking for a make of car that sits in a completely different brand position and with a completely different brand reputation. The sudden move was bold, but it was impetuous.

Key Lesson: Don’t turn your back on your loyal customers. They’re the foundation of your brand. If you’re looking to change your target audience, brand position or product, have a well thought out strategy and importantly, do some market research to enable you to measure and prepare for the impact these changes will have – be it negative and positive.

Conclusion

Holden, undoubtedly, has dug a hole for itself. But there’s still hope at the end of the tunnel. The iconic Holden brand is still in the heart of Aussies. But management need to make some swift decisions.

Is the spirit of Holden still in the cars? Or has it been General Motors all along and Holden has reduced to nothing but just a name?