Will the Holden brand survive?

[Adamz Ghia]

Originally Posted by Crazy Dazz

The simple fact is that successive Australian governments, of both colours, have pursued what they believe to be "Free Market" economics. In particular lowering the impediments to imports, and reducing incentives for Australian Manufacturers.

The issue is that practically no other country reciprocates. All our major trading partners protect some or all of their industries in some way. This can be blanket bans or massive tariffs on certain imports, short-selling of their currency (China, and Japan previously) or other sneakier measures such as "luxury goods" taxes.
But of course our Pollies are aware of this.

There are a few reasons why we still pursue "Free Trade."
The "Economy" is essentially divided into 3 sectors, Primary, Secondary, and Tertiary. Primary is basically Mining & Agriculture, Secondary is often referred to as the "Manufacturing" sector, and Tertiary as the "Services" sector.

Australia has traditionally had a massive Primary sector, very small Manufacturing sector, but a large Services sector (by GDP). For a long time this actually made us quite unique amongst OECD nations. (Developing nations normally distinguished by big Primary sectors and not much else.)
Hence sacrificing our Manufacturing sector, has oft been seen as a relatively small price to pay.

Also, many FTAs, and their predecessors, are pursued for Political reasons. Some I agree with, some I don't.
Sucking up to America, generally a good idea.
Encouraging China's dependence on Maritime trade, is probably currently the greatest protection against war in the Pacific. (Although I sometimes wonder if we aren't feeding the dragon that will one day devour us?)
Our perpetual need to promote Australia as some kind of regional power in ASEAN, is I feel a sad joke, but that's just my opinion.

And lastly, there is the domestic politics. Traditionally manufacturing workers, especially heavy industry, have been cast-iron Labour voters. So simple fact is that the Libs are quite happy to see those industries dismantled. They certainly see no votes in saving them.
The problem for Labor, is the Greens irrational hatred for heavy industry.
I don't profess to understand exactly why Labor chooses the precise path it does, but clearly it involves some attempt to garner either green votes, Greens preferences, or Greens Senate support.

One of the ironies, is that I consider myself slightly pro-environment, at least in a practical sense. I believe that instead of shipping ore (and coal and LNG) o/s to be smelted in dirty & dangerous smelters. We should build clean, state of the art smelters HERE, and only export the (much smaller) final metal.
I also believe that our addiction to cheap disposable Chinese crap is not only wasteful but harmful to the environment.

Voters fault. Governments no longer play the long game, they play for the next three years because voters fall for it.

[Sprintey]

Great post Dazz completely agree.

In the last election, Joel Fitzgibbon's seat (I think) in Hunter Valley was nearly rolled by One Nation. That area is coal country and currently its very busy with new mines going in. ON and Palmer picked up big in the north QLD seats that lost Labor the unloseable election. These were working class people who might have seen labor representing inner urban greenies instead of them. Kind of makes sense with the outcome of the Button Plan too. So ALP has a problem, how to reconcile the greenies with the mad SJWs with the traditional workers.

Here's a link of this problem to be reconciled, for the lulz:

https://www.abc.net.au/news/2019-04-...y-qld/11051390

If you take a look at One Nation industrial/manufacturing/trade policy, it looks like old school labor, and it mentions protecting industry.

[jpd80]

Without deep dive into politics, I believe conservative governments around the world
are now so right wing with policy that it's driving Labor and the Democrats nuts
and forcing an over reaction that's far too left (socialist) for most voter's liking.
This is the real reason why both will struggle to win respective elections anytime soon..

back on Holden, the only thing they can do is just keep selling whatever products they have
with heavier emphasis on SUVs, just simply selling vehicles or getting vehicles that dealers
are able to sell to buyers is key here as well as knowing buyer preference, Acadia needs a diesel.

It still amazes me that GM will build a Corvette in RHD yet is incapable of giving Holden either
a factory RHD Camaro or 4-door Alpha sedan that would be a closer replacement for VF Commodore.
This could be a way of restoring the "glue" for sales, a return of high series buyers and their extended
families showing renewed interest in Holden products.....

[blue sleeper]

I wonder in the next coming decades as India becomes more opulent whether GM, Ford etc might regret not having facilities that mass produce right hand vehicles.....

[Fordman1]

Originally Posted by blue sleeper

I wonder in the next coming decades as India becomes more opulent whether GM, Ford etc might regret not having facilities that mass produce right hand vehicles.....

Ford will have a joint venture in India with Mahindra, no problems there.

[Bill M]

Re manufacturing, sadly some don't understand the influence of manufacturing industry as well as they think they do.
The contribution made by the automotive industry to Australia with engineering know-how more than justified the taxpayer funds used to support it.

The skill-set involved in the design and execution of automotive electronics packaging translates across to many other disciplines and has done for decades.
I think you have to experience it in practice to understand it not just quote some articles in the newspapers.

The current international situation demonstrates why some self sufficiency is needed. It is changing and changing fast.
Unfortunately Australia's leadership across the political spectrum in the last 20 years has been sorely lacking and now we are reduced to begging the USA to bolster our meagre 28 days of fuel supply reserve. Pathetic.
Bill.

[mondeomatureguy]

Hi Boys,
The big SUVs killed off the station wagons.
my wife has a VE Commodore station wagon and its a great car ( not as good as my Mondeo).


we have made some mistakes we as the Politicians and I think one of the biggest mistakes was closing down our Fuel Refinerys and not making our own fuel.


Caltex in Kurnell closed down in 2014 and now its a Fuel Import Terminal still run by Caltex of course.

We are currently dependent on imports for more then 90% of its fuel needs which is wrong.

[Vesper Martini]

Originally Posted by mondeomatureguy

Hi Boys,
The big SUVs killed off the station wagons.
my wife has a VE Commodore station wagon and its a great car ( not as good as my Mondeo).


we have made some mistakes we as the Politicians and I think one of the biggest mistakes was closing down our Fuel Refinerys and not making our own fuel.


Caltex in Kurnell closed down in 2014 and now its a Fuel Import Terminal still run by Caltex of course.

We are currently dependent on imports for more then 90% of its fuel needs which is wrong.

To take you point on another tangent, I believe If Australia Built LPG powered cars from scratch, and charged what they should for the fuel we have in Abundance. you would be amazed at how many people would drive a car that cost so little to run.
I'm not talking about adding a system to an engine & car designed to run on petrol. I'm talking Purpose built.

[Bossxr8]

Originally Posted by hackney

Not “misguided” @ all,do not (again) seeing good money been thrown away(especially on a auto maker)The industry was never going to last(fact) we could never ever compete against the likes of the Koreans,Japanese etc...Wages etc are so high here.I wonder whether you actually understand or get this side of it?How do we compete? We cannot,is the plain answer.I am sure you will have another answer for this though.Anyhow enough said for me,time to move on.Cheers

Government can't predict the future. Can only invest on the info they have on hand.

And for your info the koreans, germans, yanks (legacy workers, not new hires)etc auto workers wages are higher than ours were. If anything with the aussie dollar being historically lower than the US dollar, our wages were a fair bit lower in real terms with the big manufacturers trading in US dollars.

With the aussie dollar at 67 cents our wages are cheap for the US companies who still employ people here.

One of the biggest issues the industry faced were the size of the factories. The new mega factories can pump out 250,000 + cars a year. Broady was maxed out at around 100,000.

[roKWiz]

I think this deserves to be here...

https://youtu.be/LcoQyzitZjk

[CyberWasp]

It is a very simple equation.

(Money Invested by Australian Govt) < ( Money Generated By Industry in the form of Taxation / GST / Fees)

The new Equation is

(Money from Australian Govt) = (Welfare)

[jpd80]

Just look at the revenue drain out of the country,
It should be painfully obvious as to what’s going on
when dealers make barely a few hundred dollars off
the sale of most new cars, regardless of their origin.

The govt happily gives up on price transferrring just to
Keep the peace with out major exports of mineral resources.

Free trade by a$&

[hayseed]

https://www.betootaadvocate.com/unca...n-e-catalogue/

[DMXR6T]

Cost of doing business in Australia is not just high wages, it is also:-

IR laws
3 levels of government red tape meaning multiple bureaucrats with many powers wanting time and money.
High taxes at state and federal level (company tax, payroll tax, capitol gains tax,.....)

All of the above caused me to set up an office in Singapore. Had no choice.

With regard to making cars in Australia, it does not make sense as the unit cost of production is far to high. we all end up paying a lot more in subsidies or purchase price and this cost is reflected throughout the economy so we also pay in other ways (cost to business for vehicles is higher). Trade between countries means that we export what we are good at and import products that another country is good at. We export biomedical, IT, coal, iron ore, rare earths, etc. Government subsidies for any industry have never worked (remember the government buying car companies in UK). Unfortunately bureaucrats never send money efficiently and it costs all of us (yes, I have worked for state & federal departments before I set up my own business so I have seen it first hand).

The car industry was simply not viable - volumes far too small. Better off now being a design centre and importer.

[DFB FGXR6]

It continues...........

https://www.caradvice.com.au/788729/...olden-equinox/

"Holden is hoping a simplified range will give its Equinox mid-sized SUV a sales boost for the 2020 model year."...................."increase from $27,990 drive-away to more than $32,000 before on-road costs with the revised line-up."

[danzvtil]

Originally Posted by DFB FGXR6

It continues...........

https://www.caradvice.com.au/788729/...olden-equinox/

"Holden is hoping a simplified range will give its Equinox mid-sized SUV a sales boost for the 2020 model year."...................."increase from $27,990 drive-away to more than $32,000 before on-road costs with the revised line-up."

Yep, increase the price by $4k to “increase sales”. Makes perfect sense

[lra]

Originally Posted by danzvtil

Yep, increase the price by $4k to “increase sales”. Makes perfect sense

Well, it does make sense … in a way.
They drop the poverty spec models which have specifications that nobody wants, move the vehicle up-market to include stuff as standard that buyers want. They are not going to sell the extra fruit at the previous lower price, they are not Santa Claus.
Result, they 'increase' sales of specific models. Simple, really. Just smoke, mirrors and creative accounting.
Did some-one mention 'customers and buyers' ? Oops, forgot about that.

[BENT_8]

Ford drops the entry level Fiesta and increases the ST by 6k and it's marketing genius, Holden drops its entry level SUV and ups the price of its upper spec model and it's good luck with that...

[ebv8]

they will drop them to $27,990 soon enough after just don't be a muppet that buys one at full price

[Dr Terry]

Yeah, a lot of new car dealers are doing it tough these days.

Not just Holden, it's all brands.

Apart from a few models that are actually in high demand, it's buyers market

Dr Terry

[BENT_8]

Originally Posted by Dr Terry

Yeah, a lot of new car dealers are doing it tough these days.

Not just Holden, it's all brands.

Apart from a few models that are actually in high demand, it's buyers market

Dr Terry

Agreed, when you have one manufacturer selling in excess of 2 to 1 over second best and the next 9 separated by a few thousand sales there is only 1 real winner and a bunch of also rans.
When that winner supposedly flogs white goods it speaks volumes about the desirability of the rest.

[Syndrome]

Originally Posted by BENT_8

When that winner supposedly flogs white goods it speaks volumes about the desirability of the rest.

It also speaks volumes about the buyers.

[au2000]

Every one is doing it tough now, all have dropped sales, what has me curious is what kind of profit in Australia Toyota will make compared to Ford.
Will the mass market white goods sales bring in a better profit margin than Fords new premium price mantra?
At the end of the day the overall numbers don't lie, Toyota is giving the buyers what they want,

[Bossxr8]

Originally Posted by prydey

Take your blinkers off. You also have an unhealthy hatred of anything Holden.

How have I said anything that's not a fact? Holden ran heavily slashed drive away prices only months after the ZB and Equinox were released, because they massively over ordered stock and had to get rid of them.

If you are saying that's untrue then you are full of crap.

Yeah they aren't the only ones who discount, but not many heavily discounted as much as they did trying to clear that stock.

And shock horror, someone who dislikes Holden on a Ford site. Well i'll be giggered

[vztrt]

Originally Posted by Bossxr8

How have I said anything that's not a fact? Holden ran heavily slashed drive away prices only months after the ZB and Equinox were released, because they massively over ordered stock and had to get rid of them.

If you are saying that's untrue then you are full of crap.

Yeah they aren't the only ones who discount, but not many heavily discounted as much as they did trying to clear that stock.

And shock horror, someone who dislikes Holden on a Ford site. Well i'll be giggered

Good buying if you want a full size sedan. German built. Good warranty. Cheap price.

[BENT_8]

Originally Posted by vztrt

Good buying if you want a full size sedan. German built. Good warranty. Cheap price.

Agreed, im not sure why people get so worked up over discounting when everyone knows we get shafted on price in this country so that heavy discounting is probably closer to realistic pricing in any other market, but that doesn't fit the narrative..

It wasn't that long ago that certain people pointed to Toyota's discounting of its Hilux as the reason for its commanding position on the charts yet nothing has been said on that subject with regard to Ranger sales despite similar discounting since late last year.
One could argue that neither of them are necessarily discounted at present and more likely where they should be without the Australia tax we get slugged with for being a relatively small market isolated at the **** end of the world.

[jpd80]

Just to give some perspective regarding sales and profitability in this country,
let's take Toyota's most recent achievement for FY19 (tax year ends March 31, 2019)...LINK
Toyota Australia FY19:
After tax profit was $209 Million
Sales were 223,096...

I know this is simple math but that works out to an average of $936 per vehicle.
Now three things are possible,

1. Toyota operates on very skinny margins on all vehicles?
(unlikely)

2. A lot of Toyota's vehicles make little or no money?
( Maybe vehicles below say $40K don't add much profit?)

3. A crap ton of price transferring is going on?
(Products from Asia sold to Toyota Aust at near full retail price?)

Not disparaging Toyota's strong sales in Australia but just be aware that either
they're not making all that much money or it's being sneakily siphoned off
to another region.

When you consider those are the figures on the runaway sales leader in Australia,
you have to wonder what's in it for the others....

[Syndrome]

Originally Posted by jpd80

Just to give some perspective regarding sales and profitability in this country,
let's take Toyota's most recent achievement for FY19 (tax year ends March 31, 2019)...LINK
Toyota Australia FY19:
After tax profit was $209 Million
Sales were 223,096...

I know this is simple math but that works out to an average of $936 per vehicle.
Now three things are possible,

1. Toyota operates on very skinny margins on all vehicles?
(unlikely)

2. A lot of Toyota's vehicles make little or no money?
( Maybe vehicles below say $40K don't add much profit?)

3. A crap ton of price transferring is going on?
(Products from Asia sold to Toyota Aust at near full retail price?)

Not disparaging Toyota's strong sales in Australia but just be aware that either
they're not making all that much money or it's being sneakily siphoned off
to another region.

When you consider those are the figures on the runaway sales leader in Australia,
you have to wonder what's in it for the others....

My experience says it is option 3 with the profits going back to the head office.

[jpd80]

Originally Posted by Syndrome

My experience says it is option 3 with the profits going back to the head office.

When Ford and Holden made a loss, at least all the money stayed here in the community.
Look at all the money being dragged out of the country today with very little taxable profit.
They threw our car industry and trade tariffs under a bus so they could take the lot
and our government let them do that. ~$30 Billion in annual revenue flowing out of the country.

[hayseed]

Originally Posted by jpd80

Just to give some perspective regarding sales and profitability in this country,
let's take Toyota's most recent achievement for FY19 (tax year ends March 31, 2019)...LINK
Toyota Australia FY19:
After tax profit was $209 Million
Sales were 223,096...

I know this is simple math but that works out to an average of $936 per vehicle.
Now three things are possible,

1. Toyota operates on very skinny margins on all vehicles?
(unlikely)

2. A lot of Toyota's vehicles make little or no money?
( Maybe vehicles below say $40K don't add much profit?)

3. A crap ton of price transferring is going on?
(Products from Asia sold to Toyota Aust at near full retail price?)

Not disparaging Toyota's strong sales in Australia but just be aware that either
they're not making all that much money or it's being sneakily siphoned off
to another region.

When you consider those are the figures on the runaway sales leader in Australia,
you have to wonder what's in it for the others....

I couldn't be bothered wading through the Financials..
But, I bet that Toyota Australia's EBITDA is a hell of a lot better than $936