Holden to shed 30 dealers as shutdown looms

Holden to shed 30 dealers as shutdown looms

THE locally made Holden Commodore isn’t the only Australian icon about to disappear, with the carmaker now believed to be shedding one in 10 of its dealerships nationally.

The axe is believed to have fallen on about 30 dealerships spread across regional and urban locations.

Most of the 269 Holden dealers throughout Australia have contracts with the carmaker that roll over on December 31, meaning those affected will have about six months to find a way to remain viable by either picking up another brand, servicing rival brands’ cars or relying more heavily on used car sales.

In its heyday in the 1960s, Holden’s dealerships were scattered throughout Australia and helped elevate the car maker to account for one in every two new cars sold here. Today, the brand accounts for seven out of every 100 sales. Beyond the end of the year, Holden says it will still have Australia’s second largest dealer network, behind Toyota’s more than 270.

Ford is believed to be the only other mainstream brand to have also reduced its dealer network nationally, culling a small number over several years in the lead-up to quitting manufacturing in October last year. A number of other leading brands who responded to inquiries from Wheels said they had not reduced dealership headcounts.

In a statement issued to Wheels, Holden confirmed it had made a review of its “dealer network footprint” in the lead-up to the October 20 deadline for local manufacturing.

“Taking into account a number of factors, the difficult decision has been reached that the size of the dealer network must be reduced,“ it said in a statement.

Holden customer and dealer operations executive director Peter Jamieson said the decision was critical to the company’s transformation, helping to ensure a “sustainable and successful future” for the network.

“This decision has not be made lightly, as with any decision that impacts the hard-working men and women at Holden and in the network,” he said.

“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.
 
“We are supporting our dealers and their teams in a number of ways including redeployment, retraining and support services.”

Speak to the dealers, though, and it’s a different story. One who will be hit hard is Kyogle, NSW-based O&H Holden. It has been part of the Kyogle community for 30 years, where it sponsors the local soccer and netball teams and employs 14 locals.

Dealer principal Tim Hoffman, a second-generation Holden dealer, said he’d been told this week at a meeting with his zone manager and Holden’s dealer network development manager that his franchise would not be renewed – even though it has a 30 percent market share and had won an Australia-wide award two years running for beating its sales targets.

“Basically they stated that this is our decision, it’s final, we’ve done a footprint study and you don’t fall in the footprint,” Hoffman said. “They said it was a national decision. Reading between the lines I realised that there was more than just me involved in it.

“They wouldn’t give me any detail at all into how it was decided or why we don’t fall into the footprint. And that was basically it.”

Hoffman said Holden had even contacted him to say that once the contract expires, the car maker would send someone to take down $30,000 worth of signage. He will also lose the right to service Holden-badged cars under its capped-price servicing scheme – any cars he sells between now and the day the signs come down, he’s unlikely to see again when service time rolls around. Holden will also buy back any unsold new cars, parts and specialist tools.

“Until December 31 we can trade as per normal, if normal is the right description for it, but from that point on we’ll have no affiliation with Holden at all.”

He said the only support Holden had offered him to help his business was a two-hour consultation with an adviser to help his dealership adjust to life without the Red Lion. He and his staff will have access to other support services offered by the car maker.

Hoffman fears that as community anger grows over the decision to pull out of Kyogle, Holden will fall harder as buyers who would have come to his dealership drive 40km to Lismore, where the next closest Holden dealership is based, and go straight to a rival carmaker’s showroom.

“I want to leave the opportunity open to look at other franchises, but I think that’s going to be very hard being a town of 3500 people.”

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