Holden culls 30 dealerships as market share shrinks
HOLDEN has culled 30 dealers from its 230-strong network as the car maker deals with declining sales ahead of its factory closure in October.
The company has confirmed the dealers have been told their franchise agreements will not be renewed when they expire on December 31.
It is believed that more than half the affected dealers are from metropolitan areas, although Holden will not say which outlets are affected as it is bound by confidentiality agreements.
Melbourne has the highest concentration of dealers and is likely to be hardest hit, but it is believed high profile Sydney dealer group Suttons may lose its dealerships in Waitara and Homebush. Suttons was contacted for comment.
Elsewhere O & H Holden in Kyogle, NSW, and McLeod's Whyalla in South Australia have also reportedly lost their franchises.
Whyalla Holden dealer principal Malcolm McLeod declined to comment.
Holden's executive director of customer and dealer operations, Peter Jamieson, said the "difficult decision" was critical to the company's transformation from local manufacturer to importer.
"Holden has conducted a review of our dealer network footprint as we transition out of local manufacturing and make the change to a full-line importer for the long term," Mr Jamieson said.
"Taking into account a number of factors, the difficult decision has been reached that the size of the dealer network must be reduced."
He said the company's network was still the second biggest in the industry.
Holden's market share has slipped dramatically in recent years. Once the country's undisputed number two brand behind Toyota, it has been overtaken by importing powerhouses Mazda and Hyundai.
Last month it was outsold by archrival Ford, despite the fact that the Blue Oval closed its factory doors last year.
The company relies heavily on Commodore sales to drive numbers through dealers.
Roughly a third of its total sales are locally made products, whereas Ford has successfully weaned itself off the Falcon and Territory.
Holden sales are down by more than 10 per cent this year, following an 8 per cent decline last year.
Twenty years ago, one in five Australians who bought a new car chose a Holden. So far this year that has dropped to seven out of 100.
A senior automotive researcher who declined to be named said consumer "intent to purchase" a Holden has plummeted in recent years, as buyers turn to imported SUVs.
"They are just not on people's radars any more. They've got a huge carpark of owners but loyalty is really low," he said.
He said it was inevitable that the brand's sales were no longer enough to keep so many dealers afloat.
"They missed when Australians moved on from football, meatpies and Holden cars. They've recognised now, but it's too late."
Mr Jamieson said changes were necessary to ensure the company had "the right dealer network in the right places to meet the needs of our customers, today and tomorrow".
He said the decision hadn't been made lightly.
"This will be a challenging period for those dealers impacted and their staff. Just as throughout the wind-down of our manufacturing operations, we are trying to put our people first and help them wherever we can," he said.
"We are supporting our dealers and their teams in a number of ways including redeployment, retraining and support services."
Originally published as Holden culls 30 dealers as sales slide