HOLDEN has cited the high Australian dollar and one of the "most open and competitive car markets in the world" for its decision to sack 500 workers in South Australia and Victoria.
From August 1 Holden will make 335 cars per day in its Elizabeth production facility in South Australian, down from 400, with 400 people to lose their jobs.
A further 100 product development positions will go from Holden's Victorian operation.
The iconic carmaker said there had been a massive reduction in demand for its Cruze small car, with managing director Mike Devereux admitting it was becoming increasingly difficult to compete with overseas-made cars.
Mr Devereux said the decision to sack 500 people was a "last resort".
He said there was a "major structural shift" going on in the economy, making it difficult to manufacture anything in Australia.
"The Australian automotive industry is heavily trade exposed. The appreciation of the currency means that making things in this country is 60% more expensive than it was 10 years ago," he said.
"Competition in the Australian market is brutal, just between June and July of 2012 our Cruze volume decreased by 38% and it hasn't come back - that is not a natural decline in a normal, stable market.
"There are huge external forces at play here."