The Holden brand – the latest victim of globalisation

It’s a sad week for many Aussies as the news breaks about the end of an era, the end of 72 golden years of Holden as an iconic Australian brand.

But the writing was on the wall and the time has come for many automotive brands to take stock of the current market, keep up with technology and consumer demands and embrace the new future of the automotive industry.

BrandMatters’ Managing Director, Paul Nelson reflects on the brand:

“I’m a multi generational Holden fan and my sentiments are a mix of nostalgia and frustration. Sad to see the demise of a brand that was part of my social fabric growing up. Frustrated to think of what might have been, with a different mindset.

So what happened? To me it ultimately came down to leadership looking backwards on what made the brand great in its heyday and losing connection with the next generation of consumers and what they were looking for in an ideal car.”

So what were the factors that contributed to the demise of the Holden brand?

1. The brand suffered from its US owners (General Motors) who didn’t have visibility or a committed understanding of the Australian market. 

2. Holden sales have been in systemic decline, especially since the decision to stop manufacturing here was announced in 2017. As a global player, GM would have been looking at this market and making decisions on the best way to exit.

3. The dependence on Commodore as the replacement for the Kingswood, when the market demanded a much broader range of styles and sizes of vehicle. 

4. Since local production stopped, GM were committed to sell what they had, rather than what we wanted. After all, the Australian market would have represented a very small, and potentially insignificant share of its overall focus. GM further claim their focus was on left-hand-drive markets – Australia today is right-hand drive which, at only 25% of all cars manufactured, meant higher re-tooling costs. 

5. As the range was narrow and the relevance too low, so was the investment in brand building and advertising. A drop in loyalty and pride in owning a Holden soon followed, as Holden had decreasing relevance with a younger audience, who aspire to new emerging, efficient, environmentally friendly brands that increasingly are the norm. 

In a statement made by GM’s President, a nod was made in recognition of the love of this brand in the Australian market “At the highest levels of our company we have the deepest respect for Holden's heritage and contribution to our company and to the countries of Australia and New Zealand," he said. So what was it? What led to the failure? Was it the traditional marketing forces?

It could well be argued that it lacked market commitment, product range, competitive offers and customer understanding. Its brand weakened dramatically as a result. All these factors meant it didn’t take long to lose relevance for today’s customers.

So it was all these local factors that began to spell the end for Holden. But the bigger and more fundamental factors were global.

Global competition ultimately caused the demise of this local brand. In an industry with such high manufacturing costs, a focus on innovation and the need for economies of scale, it seems near impossible for an automotive brand to be localised like the Holden brand was.