GM hopes treasured Holden endures when plants Down Under go dark

SYDNEY -- It's as much a part of Australia as kangaroos, the Sydney Opera House or vegemite, and General Motors' decision to stop manufacturing Holdens in the country looks like the marketing equivalent of a car crash.

Australians have reacted with a mixture of anger, sadness and resignation to GM's pre-Christmas announcement that it will stop making cars in Australia by 2017 due to high costs and a cripplingly strong currency.

But GM and independent brand experts are confident Holden will not only survive the public relations nightmare, they expect it to endure as one of the most valuable assets GM has ever built down under.

"The fact that they're no longer made here will cause some dissatisfaction and backlash but there'll still be a lot of people who like them," said Danny Samson, professor of management at Melbourne University. "It's a very well regarded brand and there's no way you'd want to throw it away."

While a combination of a strong pipeline of new models, effective retraining for affected staff and continued investment in its distribution network would help Holden mitigate the fallout, its biggest asset will be its long and much-loved history in Australia.

As Australia rose to prosperity in the 1950s and 1960s, feeding and clothing a Europe recovering from World War 2, the vehicle it drove was the Holden ute.

The ute -- short for utility vehicle -- became ubiquitous in both Australia's countryside -- the bush -- and the suburbs, its pickup style flat bed handy for transporting surfboards or sheep.

Holden's popularity continued to grow during the 1970s, driven by the success of its HQ series and the celebrated in its advertising campaign featuring the jingle "Football, Meat Pies, Kangaroos and Holden Cars" -- an Australian version of the North American "Baseball, Hot Dogs, Apple Pies and Chevrolet" ad.

A fierce rivalry with Ford, most famously on Bathurst's Mt. Panorama race track, took the brand to passionate heights.

One Holden model was even named a priceless national treasure by the National Library of Australia and the death in a 2006 rally crash of Holden racing stalwart Peter Brock, the undisputed "King of the Mountain", was a day of national mourning.

Here to stay

GM is adamant the Holden brand with its "lion and stone wheel" logo will remain in Australia after its two plants near Adelaide and Melbourne are closed in 2017.

"Holden is here to stay," GM Holden CEO Mike Devereux said after announcing the planned production shutdown. "The brand is going to be a part of the fabric of this country for a very long time."

Even so, the costs of maintaining a separate brand in such a small and fractured market have prompted speculation that GM will eventually rebadge its imported Holdens as Chevrolets.

Holden is currently the second-best selling auto brand in Australia, with its market share of around 11 percent trailing Toyota Motor Corp.'s near-20 percent.

But with more than 60 makers fighting for a market selling just over 1 million vehicles a year, Australia represents a small pie being sliced very thinly.

GM already imports the majority of the Holdens it sells in Australia, mostly from South Korea and Thailand, and may ramp up imports from such plants once Australian production halts.

Paul Nicolaides, a logistics manager at an industrial company and life-long Holden fan, said that would weigh on whether he continued to buy Holdens after 2017.

"I've been a Holden man all of my life and I've actually got the latest model, Commodore," he said. "We would have a rethink about what we would buy, (but) there's nothing else Australian anymore, with Ford gone and now Holden, where would we go?"

Australian made

That highlights a broader challenge to the "Australian Made" campaign that promotes buying locally made goods but has already seen the domestic auto industry gutted and a host of other companies moving production offshore.

In October, Swedish appliance maker Electrolux AB announced it would close a manufacturing plant in New South Wales, while global food giant Heinz last year moved some production from Australia to New Zealand, where costs are lower.

"What (Holden's departure) reflects first and foremost, is that Australia has become a very high-cost country," said Ian Harrison, the chief executive of Australian Made Campaign Ltd, the not-for-profit organization behind the certification and marketing tool. "There is not one thing in this country that you can't get more cheaply somewhere else."

Melbourne University's Samson questioned whether the "Made in Australia" factor had ever been particularly powerful.

"Only if the Australian product is every bit as valuable do they then say alright, I'll buy the Australian one, but in many categories, it's not that big of a deal," Samson said.

Indeed, government funding for Australian Made was turned off in 1996 and the organization is now solely reliant on license fees for its green and gold kangaroo triangle for its A$2.5 million annual budget.

In the meantime, Holden fans will mourn.

"A bit sad, very sad actually, because I've been a follower of Holden with my father," said Bruce Lethborg, president of Holden Sporting Car Club of Victoria. "My father had Holdens, my very first car was a 1966 HR Holden, it's just devastating really."