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mauser Offline
#1 Posted : Tuesday, 14 November 2017 6:33:49 PM(UTC)
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http://www.msn.com/en-au...n/ar-BBEP4vo?li=AAgfYrD

Opel, which designed and builds the Astra and Commodore for Holden, has been sketching out its future this week. It was sold by GM in March, and now wants to run away from the GM legacy as fast as it can.

So, following the closure of Holden's local manufacturing, it looks like more upheaval is on its way in Australia. Let's back up and summarise the two big events leading to all this shenanigans.

The first is well-known: GM closed holden's local plant because it lost money, deciding instead to bring in and rebadge a motley collection of cars from its offshoots in South Korea and Europe, as well as the US.

The second reason then struck. GM decided earlier this year to sell off that European division, again because it couldn't be relied on to make money. In fact, it has been a bad loser.

Just one day before the Insignia/Commodore was first shown to the public, France's Peugeot-Citroen group purchased the Vauxhall and Opel brands, factories and centres of design and vehicle development. Vauxhall and Opel, by the way, once built separate ranges of cars from each other but are now identical bar the badge. Vauxhall sells in RHD Britain and Opel across the rest of Europe.

This week the bosses at the former GM European division have set out a plan to turn the ship around. It hinges on integrating deeply within Peugeot as quickly as possible, and cutting its GM ties. The mainstays of the GM-based cars will be killed off by 2021 and replaced by cars based on Peugeot platforms.

This should improve the bottom line by reducing four outgoings: development cost, factory tooling investment, purchasing prices and licensing fees to Detroit.

So here's the thing. The new Holden Commodore is a version of the European front-drive Opel Insignia, and is built in Germany. Before it's even gone on sale, GM globally walked away from it. That puts Holden in a weak position.

What follows is no surprise. Opel said this week it isn't really interested in building the new Insignia for long. We hear the car will die in about 2021. It'll be replaced by a saloon of similar size, but built on Peugeot's platform and using Peugeot's engines. It'll be a bigger version of the platform under the Peugeot 308 – a car we really rate.

So then, the new Commodore. On sale for less than four years. Orphan or collector's item? We'd say the former.

Holden will likely replace it with a version of Detroit's Chevrolet Malibu. Meanwhile the Astra will doubtless be swapped out for a hatch version of the current Oz Astra saloon, which is known as the Chevy Cruze in America.

This does not bode well. Check our tests of the Holden Astra saloon (a rebadged Chevy Cruze) and the Holden Astra hatch (a rebadged Opel Astra). The hatch is better-driving than the saloon, and better finished inside, and has more safety kit. It feels more expensive. More premium.

By the same token, the new Commodore might have attracted some criticism for being FWD. But it's actually a refined well-made car with loads of tech and safety features. The Malibu has been criticised (even by the soft American press) as dull to drive and lacking safety kit. The new Commodore has an AWD and V6 option. The Malibu stops at four cylinders and FWD. It doesn't even have HID headlamps, never mind the LED adaptive jobs you can get on the Insignia/Commodore. Nor head-up display or TFT instruments. You get the picture.

So it looks like Holden will lose the opportunity to sell Euro-developed cars, and rely instead on cheaper-feeling Korean and American ones.

Meanwhile, what of the future here for the new European combine? Well, Peugeot and Citroen have a distribution network here, so it wouldn't be that hard to re-launch the next generation Opel-Vauxhalls. They'd share lots of parts with the French-branded cars, which would make repair simpler. It's like the Skoda-Volkswagen-Audi setup.

This week's announcement said Opel would enter 20 new markets by 2022. Because Vauxhall has a deeper history than Opel in Oz, that might well be the brand they choose to use here. The Holden plant built Vauxhalls here until the late 1960s. The Opel badge could be too tainted by the disaster of its 2012-2013 foray into this country.

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Do you think they will refund the money for people who brought dealerships? haha

Mauser

Edited by user Tuesday, 14 November 2017 6:40:59 PM(UTC)  | Reason: Not specified

wbute Offline
#2 Posted : Tuesday, 14 November 2017 8:01:08 PM(UTC)
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Holden is stuffed. No control over production of any car they now sell doesn’t bode well. All the other brands at least build a car somewhere. No one is going to buy cars that can and will be obsolete within 4 years. The resale value will be about as bad as Lada was.
I reckon the brand will just be allowed to fade away by GM as the local loyalties disappear.
wbute Offline
#3 Posted : Tuesday, 14 November 2017 8:05:13 PM(UTC)
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Actually, why on earth do GM even want or need the brand Holden or even sell cars here? The market is minuscule and on the other side of the world. I doubt they can sell a brand that makes nothing to anyone either.
Silverfox Offline
#4 Posted : Monday, 27 November 2017 11:21:37 PM(UTC)
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HI

Well I reckon Holden could well go the same way as Opel with a sell of or the Brand just disappearing. General Motors could well bring its own Brands to Australia. It is appaering more so every day that GM wants a one brand image world wide. ...or just three , one in each market segment i.e. Chev, Buick and Cadillac. I reckon they don't need Buick either. So maybe just two Chev and Cadillac. Vauxhaull could be in trouble too. The other thing which is interesting is that the overwhelming market is Left hand drive. So it must cr@p manufacturers off that they have to tool up for the smaller RHD market.

Interestingly is see a few middle driver position cars on the horizon. Watch Tesla etc.

I think the Aussie lion could be critically endangered.
Cheers
Nick.
"HOLDEN MONARO. OUT TO DRIVE YOU WILD!"
commodorenut Offline
#5 Posted : Tuesday, 28 November 2017 5:31:03 AM(UTC)
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The 2-prong approach has worked well for Toyota/Lexus, and Nissan/Infiniti. Hyundai is modelling Genesis the same way.
I think you're onto something there with just Chev/Cadillac.
Cheers,

Mick
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Tour Director Offline
#6 Posted : Tuesday, 28 November 2017 9:57:32 AM(UTC)
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Over the years with Holden there has been a good supply of spare parts for the Aussie built cars. This has been partly due to GMH having the storage area, the suppliers having the tooling locally, regular servicing of the cars and a longer life of the cars themselves. On average our car park is about 11 years old with a strong restoration backup for the local models. We also have the aftermarket and their ability to produce service parts. So while some parts will become harder to find many service items will continue for years to come.

With a lot of the imported vehicles we have lower sales per actual model and continual changes in their production during the model life. This results in a greater range of parts required to be held for service and repair. This inventory carries a huge cost in storage along with longer supply times with parts coming from overseas. When a supplier starts making parts for a newer model they rapidly lose interest in producing for the spare parts divisions and it is common for the pricing to increase or often the tooling is lost or damaged. It is not uncommon for a supplier to lose the contract for the next model which further compounds their lack of interest in spare parts. That is why we often refer to some of these cars as "throw a way's" as either the cost of new spares are either exorbitant or not available.

The question would be is if this would happen with the new "Commodore" particularly with the changes in ownership of the parent company PSA and it's suppliers. If a current Opel supplier of parts has to compete against a current PSA supplier who would be the winner?. Chances are the French would be the successor. History may be a decider.

While the expectation is that parts are carried for 10 years from model end the reality is that it doesn't always happen. There were many lessons learnt from Mitsubishi's closure as to the actual stock that was produced. After the 10 years they still have most of it in storage but some essential parts had run out well before hand. Many of the suppliers had actually closed down so the parts could not be reproduced regardless.
We have already seen most of our parts suppliers either close or change direction and vast amounts of machinery being auctioned off. So the same situation is possible with other countries.

Edited by user Tuesday, 28 November 2017 10:00:04 AM(UTC)  | Reason: Not specified

tuckerbag Offline
#7 Posted : Tuesday, 28 November 2017 6:45:12 PM(UTC)
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Australia’s Edsel
commodorenut Offline
#8 Posted : Tuesday, 28 November 2017 9:12:12 PM(UTC)
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Originally Posted by: Tour Director Go to Quoted Post
..........Many of the suppliers had actually closed down so the parts could not be reproduced regardless.
We have already seen most of our parts suppliers either close or change direction and vast amounts of machinery being auctioned off. So the same situation is possible with other countries.

We have just had an example of the difficulty the local car industry faces right now - mere weeks after the factory closure, because of this change of direction for suppliers.

For a number of years we supplied components to a sub-tier to GMH, who further value-added to them with parts from other suppliers, and labour, to deliver completed assemblies for production purposes, and a small number for spares. That sub-tier went out of business a couple of years back - but not before they completed all the forecasted production & spares stock requirements.

However, they severely underestimated spare parts needs when they did that "final" batch (or maybe it was the accountants driving the system).

So we have now been handed a very thinly veiled "request" (more like demand) to get them out of the smelly brown stuff.
Fortunately, we have the capability locally of either procuring globally, or making locally, all of the parts required, and have the processes & equipment to manufacture a suitable assembly. There's some minor variations to the original version - mostly to suit evolution of our products, but these were acceptable to GMH. Now they want them yesterday.....

One of the biggest problems, is we no longer keep those particular items in stock, so to make them will require a special run (so setup time which = more cost) and we need to make some jigs/tooling for the assembly & testing process, resulting in the unit price ending up some 4 times what they originally paid for them with the old supplier (maybe that's why they really closed?).

We're only making minimum margin on all the parts, and covering our labour. If we wanted to put general industry margins on it, the unit cost would be 20-30% greater again. I don't know what they charge for this item as a spare part, but you can bet the customers won't like a 4x increase in price, assuming they pass all the added cost on.

So the question of "where does that leave them?" is either a very expensive part when others have to tool up to produce a low volume run, or with no support at all.
Cheers,

Mick
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Tour Director Offline
#9 Posted : Wednesday, 29 November 2017 8:12:42 AM(UTC)
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This is only the start of the many problems that will grow as time moves on.

Firstly the car companies have to accept that pricing increases by a new supplier or tooling must be accepted, as why would you make anything at a loss. They can then determine what they need to sell it at and if that will resolve complaints by the customer and avoid any ACCC pressure. If you were making normal production quantities then it might be viable but the chances are the requirement would now be for a very small quantity and you must consider set up and labour in the equation.Often the mark up by the car companies has to allow for storage, distribution, transport, profit and the various pricing levels they operate with. In the end it is the consumer that has to either accept or reject the pricing.

Over the years the car companies have decimated suppliers and their profits with cut down rates on supply. This is where they calculate a lower cost each year as they say you should be getting better at producing a part. Then you are threatened with competition from overseas cheaper sources which they end up using anyway. GMH once had a team of design people to do drawings etc. then reduced their staff and put the responsibility on the supplier. In a lot of cases, such as some headlights, they then sent the supplier drawings to competitors in Korea to produce at a lower cost.

As a supplier, in the past the tendency was to bend to pressure by the car companies or risk losing ongoing work. When GMH announced their closure at a supplier meeting many suppliers stated that the role has now been reversed and the pressure was now on the car companies to supply and accept increases. If you are a supplier only meeting local supply then obviously you may not get any more work from the car companies so what favour do you now owe them. The reason that many companies closed was they worked out it was not profitable just to be a supplier to the car companies.

Luckily some of our manufacturers were able to diversify earlier by either supplying both the car companies and the aftermarket. Others, such as Marand were able to move from car parts to aircraft parts for the USA. MTM is a company that is still doing good business in supplying door checkers to the USA. Ryco/GUD have a healthier business in the replacement parts sector than the car companies. Unfortunately many suppliers left it too late or missed opportunities to change.
commodorenut Offline
#10 Posted : Thursday, 30 November 2017 5:22:16 AM(UTC)
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The old annual cost-downs.... they reckon you've paid off the R&D + tooling investment after a short time, and can make the part cheaper - conveniently ignoring increasing energy, labour & material costs.... I first had to deal with this in the 90s, and for one line of parts, the company replied back with "take it or leave it" and had the cost-downs removed. Mind you, 10 years later, they were still making the (evolved) part for the same unit price, so still essentially went backwards.

Ryco survived because of the sheer size of the (global) company - and the fact they offshored production years ago.
It is good to see some suppliers diversify & succeed, but as you say, it's the exception to the rule unfortunately.
I deal with some of those names you mentioned, and the successful ones turned away from automotive long before rumours started about closures.
Thankfully where I work has such a diverse range, that automotive didn't have a massive impact on us.
Cheers,

Mick
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Tour Director Offline
#11 Posted : Friday, 1 December 2017 9:14:55 AM(UTC)
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One of the failings with some suppliers is that they never checked their actual costs as materials and labour increased. They still supplied at the original pricing when they were doing production quantity. Then there was the reluctance to approach the car companies and negotiate any increases due to the attitude of the car company buyers.So they then went into producing and supply at low cost or even at a loss.

It is interesting to note that many of those buyers are no longer employed due to the closures, retirement and redundancy. Many sought work in the aftermarket but had burnt their bridges or their reputation preceded them. Their days of long lunches and Christmas gifts only added to the cost to suppliers. On the other hand the new generation of graduates that were employed in the last remaining years had lost the ability to negotiate and understand the industry. They had little background in Automotive and the tier structure of the supplier system. For most it was the adding of companies to their CV for future applications in some other industry.

Like many it is sad to see the industry disintegrate and disappear from our shores but the memory will continue with the restoration and display of the cars that built our heritage.
ExportHolden Offline
#12 Posted : Tuesday, 5 December 2017 4:23:56 PM(UTC)
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Thank-you commodorenut and Tour Director. Very interesting insights. Such a shame we have lost this industry.
castellan Offline
#13 Posted : Wednesday, 6 December 2017 10:11:43 AM(UTC)
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I would say that the new Commodore will reflect the future of a big car for Australia, 4 cyl will be the main go.

Australia's future is RS, Fuel could be $2 a Litre not to far off, easy as because Australia has given up on refining our fuel as well so that's out of our hands to do anything about and a recipe for disaster and Tax on rego etc will go through the roof, the Government debt still will not be addressed, so you have another recipe for disaster, not to mention the USA is bankrupt and the fact that only Donald Trump is the only man who could deal with that, not to mention the only one who could be bothered with addressing the issue, as the rest of them are just like 5 year olds who reject to comprehend the facts of reality, but then again they have been working as hard as they can to destroy the USA totally with their Marxist agendas.
So it don't look good and as Russia says they don't want to deal in USA dollars, because it's worthless, China and other Nations are saying it, so you have another recipe for disaster if Trump can not get on with his way.
High inflation is on the cards as well, so how many could by a V8 down the track.

I am all for RWD V8's but we have been sh-tting in our own nest for far to long and the Political Correct Marxist sh-t for brains Nazis are in control of everything, just working to enslave all of us with all their total BS, not to mention their is no need for their crap at all.
Silverfox Offline
#14 Posted : Sunday, 10 December 2017 10:41:38 PM(UTC)
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Just an update on my earlier comment.

With HSVs info release on the Chev badged range they will sell in Australia. I posted this on Facebook earliier tonight:

The beginning of the end of the Holden brand? Or clearing the way for a sell off of Holden by GM? Something is cooking. They have already got rid of Opel and Vauxhall. Moving forward GM appears to be sourcing cars from Opel and Vauxhall for the Holden badge. So would a purchase of Holdens by Opel strengthen that group? I have had the feeling GM is softening markets around the world for the Chevrolet badge where they are not used. GM could get rid of Holden while creating the Chevrolet brand via HSV. It is interesting to note the GM management saying they aren't shooting it at the Mustang....Bollocks. They have to say that because Ford not only has the head start in this market. It also has reduced its production cost by tooling for Right hand drive in its factory and is now marketing it to many RHD markets. HSV Camaro is converted in small quantity adding a lot to the bottom line. The Camaro comes into OZ fully built as LHD and has to have a huge modification including major teardown and re assembly along with many small volume special parts made. Highly labor intensive and costly. It borders on crazy. Then to expect the Australian market to cough up 20 to 30k more for a car which is marketed directly at the Mustang in the USA. General Motors must think the Australians are lambs to the slaughter. If you can live with four doors and the fact you can now only buy second hand Commodore based HSVs then your money will go so much further. Our Commodore HSVs in so many cases equal or better Camaro performance and function. Cheers.

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HK1837 Offline
#15 Posted : Monday, 11 December 2017 5:38:38 AM(UTC)
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Chevrolet has been a brand in Australia for a long time Nick. Not a lot since the 70’s though, however a portion of the population must rate it as they think their LS powered Holdens are Chevrolets.

The next Camaro will be factory built RHD. The GFC was the reason the prior Camaro wasn’t and why we didn’t get it here. Holden always planned to have the Camaro.
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Silverfox Offline
#16 Posted : Tuesday, 12 December 2017 10:03:30 PM(UTC)
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Hello Byron.

Understand the history of Chev in Australia. I am not referring to its history in Australia. This about the future. I wish to discuss the possibilities. My thought is that Holden is a brand which General Motors is becoming less interested in.

General Motors has killed off, shelved or sold off some big brands over the last two decades. Some which come to mind: SAAB, Pontiac, Oldsmobile, Opel Vauxhall. Other operations also.

GM is presently going through changes.

Cheers.
"HOLDEN MONARO. OUT TO DRIVE YOU WILD!"
HK1837 Offline
#17 Posted : Wednesday, 13 December 2017 5:55:28 AM(UTC)
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Nick, my point was there is no need to soften Australia for the Chevrolet brand. It has a long history here.

Holden is already dead in Australia in many people's eyes, the GFC killed off any chance of a future for a locally built Holden car or Ford for that matter. Unless Holden somehow import and sell a brilliant dual cab ute and an SUV they have no future in the current market, and then who cares if they are branded Holden or Chevrolet anyway? Personally i'd rather have a Chverolet branded car than something with a Holden badge whacked on.

The Camaro is done by HSV which is no longer Holden based, same with the Silverado trucks. I feel Holden's interest in HSV having the Camaro is for the time being people still associate the two, and it gives them an arm's length figurehead until the Corvette can be sold here RHD. When you think of the three most iconic touring cars in our history there is a Camaro, a Monaro and a Mustang. Ford have their Mustang (albeit a shadow of its performance past in most available power plants) and now Holden can point to their Camaro. Whether or not GM allow Holden to have large volumes of the next Camaro in factory RHD we'll see. Hopefully we see it in Supercars in the future.
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If we all had the same (good) taste, who would buy all the Fords?
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