Following Ford’s announcement earlier this year that it will end Australian production in 2016, the country’s other major car manufacturer, General Motors’ owned Holden, said it will stop making cars Down Under – despite initially denying rumors that it would proceed to such a move.
The carmaker said it would “transition to a national sales company in Australia and New Zealand as part of its ongoing actions to decisively address the performance of its global operations”. The company noted that it would discontinue vehicle and engine manufacturing and significantly reduce its engineering operations in Australia by the end of 2017.
“The decision to end manufacturing in Australia reflects the perfect storm of negative influences the automotive industry faces in the country, including the sustained strength of the Australian dollar, high cost of production, small domestic market and arguably the most competitive and fragmented auto market in the world,” explained GM Chairman and CEO Dan Akerson, who plans to retire next year.
Approximately 2,900 people will lose their jobs over the next four years as a result of GM’s decision, including 1,600 from the Elizabeth vehicle manufacturing plant and approximately 1,300 from Holden’s Victorian workforce.
Nevertheless, the Holden brand will continue to exist in Australia beyond 2017 and the sale and service of Holden vehicles will be made through the carmaker’s dealers across Australia and New Zealand. Warranty terms and spare parts availability will remain unchanged as well.
However, GM didn’t say where it will manufacture Holden vehicles that are now made in Australia. GM will continue to be present in Australia through a national sales company, a national parts distribution center and a global design studio.
Since 2001, the Australian dollar has risen from US$0.50 to as high as $1.10 compared to the USD. Because of the appreciation of the currency alone, manufacturing in Australia at the local currency’s peak was 65 percent more expensive compared to just a decade earlier, GM said.
As it stands, Toyota will be the only car-making company in Australia after 2017, but that may soon change…
By Dan Mihalascu
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