The Australian dollar is currently at $0.925 (a ~24 year high). The aust $ also looks like it will continue to increase against the US.

FYI, If(when) the currency goes 1 to 1 a G8 GT will cost a little over half of what we will pay for the same car in aus. And be about the same as a base model Commodore. That can not be good for Holden. (or whoever is taking the hit on these currency changes)

So, with the Ute already being on shaky ground, at what point will GM become desperate to move G8 production to the NA?


BTW, around when the G8 was first shown, Holden was of the opinion that they would be providing the G8 for 6 years (until the next redesign). For some reason I doubt it now....

 

That's been my thought for quite some time... I was just toooooo afraid to ask the question.

You know why? B/c it could spell disaster for Holden given the company relies heavily on exports.

 

The Aus dollar is not increasing in value.

The American dollar is dropping in value, and fairly quickly.

 

Don't expect prices to drop in Australia or Canada. I have a feeling things are going to get nasty in the USA in the next few years.

 

Manufacturers have already dropped many of their prices in Canada ... some through more generous incentives, and some by dropping their MSRPs outright (Porsche has done this I think). While it can be problematic to reduce stickers on existing models because of resale value and pissed off owners, I would hope that brand new model introductions would start to see more reasonable pricing (personally I hope the G8 GT is the first one to test this and lands in the very low-30s, but I doubt it).

However prices will always be higher in Canada than the US, even though our dollar is currently worth a few cents more than the greenback. We have a huge country with relatively small population and higher taxes, so the fixed costs of doing business are naturally higher. Also, companies can't immediately respond to such huge currency swings; they have to take a longer term view. No one up here was complaining when the loonie was worth 62 cents and our cars were relatively cheap. Plus the currency situation will eventually change and our dollar will fall again. It's just that a lot is going right in Canada's economy right now and a lot is going wrong in the US. That will change.

 

I strongly suspect that the current AUS->NA programs are hedged -- that is, that GM has bought currency futures in order to lock in an exchange rate, at least for the next year or two. Longer-term, however, things could get complicated.

 

When do they become unfeasible?

Sometime in the 4th quarter 2008 I believe

 

Nice to see someone else mention Canada - in the grand scheme of things, Australia imports aren't exactly a major influence on the US market. The slippage of the USD versus the Canadian dollar, however, is going to cause some major pain here in the US for any manufacturer that builds vehicles north of the border.

 

I might have some good news... if you download the following pdf you will note on page 1, Holden MD Chris Gubbey, was quoted as saying that the high dollar is not really bad news for Holden as "what it loses in exports through high exchange rates it gains in imports."

It's reassuring to know a hedge is built into VE through overseas suppliers. No doubt the deals would have been signed off on US dollars!