http://www.drive.com.au/Editorial/Ar...eID=20803&vf=2


Wanted: Commodore buyers
Richard Blackburn, The Sydney Morning Herald, 13/10/06




Holden's billion-dollar baby has made a less than spectacular sales debut, reports RICHARD BLACKBURN.


Holden VE Commodore Omega
Despite the biggest investment in Holden's history, the new Commodore is not meeting industry sales expectations. The first month's sales of the all-new model were about half of the last all-new model of nine years ago.

Sales figures from the Federal Chamber of Automotive Industries for September show that Holden sold 5255 Commodores in the new model's first full month on sale. However, once the 1100 superseded Commodores (including almost 700 wagons) are taken into account, the figure drops to 4155 - just 592 more than the ageing Ford Falcon, now the oldest model in the large car market, and 303 more than the Toyota Corolla.

The September result provides a contrast with the debut of the last all-new Commodore, which in 1997 notched up 7448 sales in its first full month on sale and 8152 the month after.

The comparison is significant, given the new-car market was much smaller in those days than it is now. In 2006, close to a million new cars will be sold; in 1997, Australians bought 722,427 new vehicles. Translation: Holden is selling fewer Commodores in a booming market.

The September result is also down on the Commodore's 2005 monthly average sales figure of 5566 and sales increased by only 8 per cent compared with the same month last year. Toyota's four-cylinder Camry, which was launched in August, logged 2847 sales, up 19.2 per cent on last September.

Holden spokesman Jason Laird says the new Commodore's September result was "solid".

"I think it will take until the end of the year to get a full picture of the market reaction," he says. "It was our highest Commodore result in 2006 and it was enough to give us passenger car leadership for the month."

He says dealers are still filling their inventories of new Commodores. But fleet managers say there has been a buyer backlash because Holden has scaled back its discounts. Fleets customarily account for about 80 per cent of large-car sales but Holden is trying to woo more private buyers by slashing the retail price (by up to $8000 on some models) and not discounting so heavily to fleets.

One industry source says Holden has cut Telstra's discount from 39 per cent off retail to just 21 per cent. Rental company Avis has apparently received the same news.

A fleet manager at a rival manufacturer says "the phones lit up" when Holden told dealers of its fleet pricing strategy. One source claims Holden has lost "half-a-dozen" fleets since the launch of the new Commodore.

Apart from scaling back the fleet discount, Holden has reduced the amount of money it gives dealers for negotiating large fleet orders, which means they are less able to do deals.

Fleet buyers are also annoyed by Holden's decision to exclude them from a special introductory deal for retail customers. The Omega V deal, which includes standard air-conditioning, alloy wheels and a spoiler for the listed price of $34,990, brings the retail and fleet prices even closer together.

Holden's decision to slash prices on its Calais and SS range also has angered fleet managers as it will damage resale values of previous-model Commodores.

The Holden strategy bears a striking resemblance to the path Ford took with its AU Falcon, where the maker chased the private dollar at the expense of fleet business. Industry analysts say the move played a role in that model's disastrous sales performance.

Laird says there has been a lot of discussion with fleets about the company's new pricing structure but denies there has been a backlash. "Fleet buyers are in business to get the best deal they can, so it's inevitable there will be some comment, but there has also been a lot of positive feedback on the new structure and our efforts to improve resale values," he says.

The new Commodore is also believed to be striking resistance from government fleets, especially in NSW, because, as with the Falcon, it only meets the Euro 3 vehicle emission requirements. Some government fleet purchasing managers now have to meet emission requirements as part of their performance criteria.

 

Don't believe everything you read in the papers.

Yes, the sales are not as good as for VT, which is the yardstick as far as the author is concerned... but we live in a different climate to that of 9 years ago as fuel prices have skyrocketed and people are buying up SUVs in increasing numbers.

Besides, Holden have learnt their lesson by heavily discounting to fleets. The VE is priced substantially higher than the superceded VZ model and is not being discounted anywhere near as bad... which is a good way to retain resale values. Holden MD Denny Mooney has also stated that should domestic sales be below forecast, it provides a good opportunity to increase export volumes. Which leads me to this IMPORTANT point... Holden are working 2 shifts now compared to the 3 shifts when VT/VX were being built... and at 650 cars/day, the plant is at maximum capacity!!!

Like I said, don't believe everything you read in the papers.

 

The new Commodore was off to a sluggish start, but it's by no means selling poorly by any standard used in the Australian market.

The article mentions some very important points.

First, at a difference of 592, the car is selling roughly 8 or 9% better than the Ford Falcon and a very rough guesstimate of 3-5% over Toyota. Nothing to be ashamed of.

Second, like our industry here in the US, Holden is getting away from excessive incentives. Also like our own industry, there's a bit of buyer backlash. People there (not to mention here) have gotten used to waiting till the next sales event. Holden isn't even making any real deals to "fleet" buyers.

Finally, although Australia isn't running up recession risking debts and is essentially energy independent, market prices of energy are still driving up the price of oil, which is affecting their large car market.

Although Australia has enough oil that they can't even be remotely held hostage by OPEC (Australia is essentially energy independent), if the international price for oil is $60 a barrel, oil still goes to the highest bidder in the world market.... meaning the price of fuel goes up in Australia just as it does in the rest of the world (unless oil is nationalized, companies can sell it wherever they can get the highest price).

 

If AUS demand for VE is low I can think of 2 markets that could very easily absorb a few ten thousand models should the need arise. NA and Arabia.

 

what amazed me about the article..home built Australian cars outsold the Toyota counterparts..

ohh remember the days in the U.S. when that was true?? and people actually didnt have a preceived 20 year old notion of better quality???

 

But did Holden go through the bad times like GMNA did?

 

No..... worse!!!

Think of it like this: Imagine GM-NA being reduced to buying performance engines and ecoboxes from Nissan, pimping themselves for Toyota, and Ford owning something like 50% of the entire US market with GM having a bit less of the market as they have now.

Holden sold the Nissan Pulsar as the Holden Astra, Toyota Corollas as Holden Novas, and Camrys as Apollos. In return, Holden Commodores were sold as Toyota Lexcens. Similar situation here would have the press declaring GM dead and GM fans jumping from buildings.

Holden's turnaround in the 1990s has to be recognized as one of the most amazing turn arounds in world automotive history! Holden turned to Opels to fill out their lineup (foreign, but at least Opel is part of GM), Commodores got their respect (and sales) back, and with the introduction of the new VT Commodore in 1998, complete with supercharged V6 and LS1 V8 engines (combined with Ford's failed experiment with Taurus and their restyle, bizzare looking Falcon), Holden virturally blew Ford out of the water.... and rolled back Toyota's onslaught.


In the grand scheme of things, despite what's being written, Holden is still a pretty powerful company, and one of the strongest subsidaries of GM. Holden (not North America) is supplying large cars to GM's world networks. Holden made RWD Chevrolet Caprices & Luminas supply Chevys in no fewer than 3 nations, Holden is still the number one selling brand in Australia, and Toyota isn't anywhere close. Combined with that number 1 position and extensive exports, Holden of Australia is over twice the size as Ford Australia in overall production, manufacturiung capacity, and operating budgets.

If I have my numbers right, currently, Holden is the 3rd biggest car division in GM global behind Chevrolet and Opel.

Not bad for a division that was abandoned by GM, and left for dead in the 1980s.

By the way, if anyone's intrested, an excellent book on Holden: "Commodore Lion King Celebrating 21 Years" by Bill Tuckey with introduction by Peter Brock is absolutely a must have for anyone wanting to know anything about Holden. I have one I brought back in 2000 when I went down under, and if you like automotive history along with behind the scenes tidbits and a fantastic history of Holden's Aussie produced cars, I highly reccomend the book. 256 pages. Hardcover. About $22US.

Drop me an e-mail if you want one.

 

Lets also not forget that GM Daewoo is a part of GM Holden. That means that Holden is the Volume RWD Homeroom,the Compact-Subcompact FWD Homeroom, and the Small Crossover Homeroom, as it seems the T2x and all the other Thetas are Daewoo designs. Holden seems like GMs savior much more than the other way around.

 

The author is a former public affairs body from Ford Australia, and has done very recent time at Toyota's external PR agency. He does understand the large car market and has a bit of an insight.

Rare to disagree with Guy, but Holden isn't the biggest-selling brand in Australia. Toyota is, and by an increasing margin.

The commodore is still the biggest-selling nameplate, though. I have quite a few Holden dealers who are telling me they're extremely worried about model mix, volume and profitability. But, on the flip side, what dealer hasn't whined about any of that? apart from the Lexus dealer in Vegas?

 

Yep, I mis-spoke. Instead of refering to Holden as the biggest selling brand, I should have said Commodore was the biggest selling car.

Considering the Commodore line (including it's variations like the Statesman & Senator) is the only all Holden vehicle sold, you might understand my error.