If you’re thinking about buying a Holden, don’t. The brand’s set to fail in 2018. Here’s why.
MARCH 2018 UPDATE: Holden sales hit record low as the rest of the new car market powers ahead
Holden posted its worst monthly sales in 70 years this February. The brand seems set to drop out of the top 10 - it is currently eighth, the lowest it has been since it was established in 1948.
The race out of the top 10 is incredibly close. Holden (down 18 per cent) finished February just 18 vehicles ahead of Volkswagen (up 1.1 per cent) in ninth, and 25 vehicles ahead of Kia (up 12 per cent) in 10th.
This is what happens when you betray Australia on so many fronts - accepting millions from the taxpayer and failing to meet your moral obligations in respect of jobs and manufacturing, and betraying customer by the thousands with low quality products, poor reliability and appalling customer service.
Holden's market share has fallen from a high of 21.6 per cent in 2002 to 4.9 per cent today. Sales in February represented a massive slump of more than 18 per cent.
Despite its previous brand cachet, even in ute obsessed Australia, Holden cannot insert the Colorado into the top 10 - despite the fact that four utes are represented in the 10 most popular vehicles: Hilux (1st), Ranger (2nd), Triton (7th) and Navara (10th).
Small cars are the long-term most popular segment in the market - and yet Astra is unrepresented in the top 10. Corolla is 3rd, Mazda3 is 4th, Hyundai i30 is 6th, and Hyundai Accent is 9th.
SUVs (CX-5 in 5th and RAV4 in 8th) make up the balance.
TOP 10 CARMAKERS
(18,281 sales, up 12%)
(9913 sales, no change)
(8001 sales, up 14%)
(7142 sales, up 24%)
(6059 sales, up 7%)
(4962 sales, up 55%)
(4863 sales, up 10%)
(4689 sales, down 18%)
(4671 sales, up 1%)
(4664 sales, up 12%)
A MESSAGE FROM SPIN CENTRAL
I'd hate to be a Holden spin doctor, because coming to work to talk up the disaster that was February would just make me feel dirty.
[Holden had been] “planning for a slower start to the year in terms of sales but it’s always our aim to sell more vehicles and our current market share is not where we want it to be” - Holden statement
“We’ve got our strongest product line-up ever, with more in the pipeline, so we expect to bounce back quickly.” - Holden spokesman Mark Flintoft.
You'd probably agree with my conclusion that things are pretty bad if that's the best the spin doctors can manage...
The fact is: Holden is on the nose with the Australian public. Poor reliability and atrocious support are well documented - and declining popularity poses the risk of extreme depreciation in three to five years if you make the mistake of buying a Holden today. Here's how, when and why they went wrong.
HOLDEN'S FALL FROM GRACE
I propose we change the title for the person who runs a car company from CEO to CBO, more accurately to reflect their principal output, which (so far as I can determine) is bullshit.
I’m using Professor Emeritus Harry G Frankfurt’s academic definition of bullshit >> which is not the same as accusing anyone specifically of lying.
Look it up if you’re unsure.
The CBO of Holden is Mark Bernhard (right):
“...we went through a very emotional time with closure last year and as we have got through closure the shackles are now off.” - Holden Boss Mark Bernhard
Honest personal opinion: I’d suggest it was not as emotional for you, Mr Bernhard, as it was for the people you boned. But … free at last! That’s the apparent outtake from the CBO in a brief but no less significant Holden suck piece >> by Paul Maric in thinly veiled advertising delivery system CarAdvice, recently. Mr Maric is technically quite capable of doing the research, analysing the numbers, and presenting actual data, for balance.
What a pity he didn’t.
To test CBO 6 Bernhard’s 'shackle busting freedom hypothesis', we need the ‘way back’ machine. Or Marty McFly’s Delorean - but we need go back only to 2010. Can you remember what happened in 2010?
Name one big thing.
2010 IN A NUTSHELL
In 2010, 33 Chilean miners were trapped 2000 feet underground. More than a billion people worldwide watched the rescue. (Top left.)
The Burj Khalifa (top right) - the then-tallest manmade structure - opened in Dubai. (That’s the one in Mission Impossible: Ghost Protocol.)
The Deepwater Horizon oil well in the Gulf of Mexico exploded (bottom left), killing 11 and becoming the biggest oil spill in history.
(Here in Australia, Julia Gillard upended Kevin Rudd in a leadership spill, becoming Australia’s first girly Prime Minister and turning Australian politics into a global joke - which had nothing to do with gender. I couldn't bring myself to posting pictures of either #selfrespect...)
2010 also marks (in my mind at least) the point at which the death of Holden became a certainty. Holden sold almost 133,000 vehicles that turbulent year, securing 12.8 per cent of the market.
Every year since has been a farce.
2010 saw GM close Pontiac, effectively killing the Holden factory (the Commodore was exported to the USA as the Pontiac G8). To me, that’s the moment I saw Dr Kevorkian over the bed. He’s saying: “I’ve got good news and bad news. The good news: They have cricket in heaven. The bad news: You’re opening batter next Thursday.”
MEDIA WATCH FAILS TO DETECT WRITING ON WALL
I said this all publicly at the time, because it was hardly a state secret, on national TV in an interview pre-recorded by the Seven Network on the grounds of Parliament House, Canberra.
"And away we went with a report full of sweeping generalisations that have got Australian carmakers fuming." - Jonathon Holmes, Media Watch, 'Today Tonight's car crash' 20 June 2011
'I'd be very surprised if we had a viable car manufacturing industry in Australia in 10 years' time" - Me (one of those alleged 'sweeping generalisations' in that report, inconveniently...)
Given how things turned out I was pretty conservative with the calendar, and bang-on in terms of accuracy. Therefore, to Media Watch at the ABC I say a heartfelt ‘fuck you very much’ - and the taxpayer-funded horse you rode in on.
That grab on TV didn’t go over very well. Holden blacklisted me, so it wasn’t all bad. (Because then the shackles came off and I said what I really thought. I’m still saying it, liberatingly enough.)
THE TRAIN WRECK IN SLO-MO
Observing Holden since then has been like watching a crash test in slo-mo. Sales have plummeted almost 43,000 units between 2010 and 2017. Market share has dropped a staggering 41 per cent. It’s a spectacularly tragic implosion.
This formerly iconic brand has transformed itself into an anachronism. Like a swan becoming an ugly duckling.
But last year - 2017 - was Holden’s annus horribilus - which is Latin for ‘unattractive anus of a year’.
The factory closed, after the most undignified lingering death ever. They were forced to fire 10 per cent of their dealers, which was incredible, as admissions of commercial defeat go.
Unless of course you’re the CBO, talking it all up:
“It was purely a footprint review. It wasn’t anything to do with their competence or anything.” - Holden Boss Mark Bernhard
Really? Why not seize this opportunity to bone your worst performing, shittest dealers? One could make the case that not doing so would be negligent. Nobody culls randomly. Or perhaps this is just a convenient soundbite of plausible sounding bullshit.
THE FRENCH CORRECTION
Also in 2017, General Motors, sold another of its loss-making disasters (in other words the entire GM Europe operation) to a global specialist at running loss-making automotive disasters, Peugeot-Citroen.
This was $2.6 billion worth of liberation for GM, but a kick in the guts for Holden, which right then lost any leverage on future products. Holden is adrift, and I see no evidence of a rudder.
The new Commodore will continues be made in Germany, but the product decisions will need to be approved by the French in the future. So Holden's future inventory will be whatever scraps the Frogs choose to throw its way, and of course much of the balance of its product is sourced from the old Daewoo factory in South Korea.
So, you put a Daewoo, a Peugeot and a Citroen in an industro-sized NutriBullet … and out pours Holden’s future inventory. If that’s the shackles coming off, it might have been better to remain manacled.
That Daewoo factory was so on the nose the were forced to change its name to GM Korea in 2011. (A cheaper option than fixing the crap product for which it remains globally renowned.)
THE ACCC GIVES HOLDEN A PULL-THROUGH
Finally, after a prolonged investigation, in August 2017 the ACCC publicly placed Holden’s head in a vice, while simultaneously ushering its hindquarters into the prison shower.
(Classic Fed pincer movement. The two-pronged approach.)
In this undignified Cirque du Soleil contortion, Holden was forced to admit openly and publicly that it had been wilfully and intentionally screwing its customers over, for many years.
Holden’s Court-enforceable Undertaking >> personally signed on the 1st of August last year by the CBO himself, Mr Bernhard, and ACCC Chairman Rod Sims, is a 22-page litany of institutionalised consumer violation stretching over six very long years.
The company has also been forced to rewrite its dealer franchise agreement in a way that is not publicly disclosed. Those details are redacted in the public version of the ACCC’s Holden spit roast. I assume this means Holden’s previous franchise agreements were intentionally unlawful.
SPIN-DOCTORING THE TRUTH
Interestingly, here’s how the CBO encapsulated this rather large issue to the (opinion) Dyson cordless corporate fellatio machine that is CarAdvice:
"Certainly the enthusiasm is there and the dealers are really buoyant on the product side of the business and efforts made around customers and looking after customers." - Holden Boss Mark Bernhard
I’d suggest to Mr Bernhard:
- The dealers’ buoyancy is a direct consequence of Archimedes’ principle.If you make one in 10 dealers walk the plank, the plimsol line simply bobs up, closer to the meniscus. #FFS
- The 22-page ACCC spit-roaster you signed five months back proves that Holden has been a Kim Jong Un of customer service on the Australian automotive landscape. Whatever changes you have made are a penalty imposed by the feds.
This is what gets me more than anything else about Holden. Why not simply strive to hang on to the customers you’ve got, by treating them decently, thus sidestepping this popularity implosion?
It is incredibly short-sighted and entirely counterproductive to behave otherwise.
If you were teaching a Master’s Degree in Customer Relations you could simply advise the students:
Make detailed notes of everything Holden did. Then, just do the exact opposite and you’ll be OK.
I met many board-level senior executives at Holden over the years, on product launches, et cetera. My impression of them was of one shared, defining characteristic:
They seemed to think Holden was so desirable that they could do anything and people would just queue up.
Apparently they still think that:
"This car, the next generation Commodore, it sets us up as this is what we are as a sales, marketing, engineering and design company going forward." - Holden Boss Mark Bernhard
No, Mr Bernhard - that’s not what Holden is. It is a failed manufacturer, out of touch with the public, selling French leftovers and use-by date-expired kimchee in the discount bins, one step removed from spending the next three to five in Federal court for treating customers like Bill Cosby treated aspiring starlets.
I mention all of this not to rub Holden’s nose in the shit sandwich degustation of their own making, but to inform you, if you’re in the market for a car.
Perhaps you grew up, like so many of us, with Holden as something of a cultural driveway icon.
MAINSTREAM AUSTRALIA: OLD V NEW
There were three choices where I grew up: Holden, Ford or Jap crap.
Perhaps this lingering sentiment moves you to consider buying a Holden today. My advice is: Don’t - for these three reasons:
One - product quality - all-time low.
Two - customer support - terrible. This company thinks just complying with Consumer Law is tantamount to excellence. Just complying for Holden, philosophically, it’s like doing a handbrake turn in the QE2: You can’t.
Ask yourself if merely complying with the law is the loftiest ideal of customer support. Surely not. If you just spent $40,000 on a car, don’t you deserve more than just compliance? Don’t you expect to be treated as if you really matter?
Reason three: 10 years of plummeting popularity - another unarguable truth for the CBO. This paints a very bleak picture for resale value in three to five years. Ask the owner of a Holden Cruze or Craptiva how they went recently at trade-in time...
Used car prices are driven by supply and demand. Declining popularity means declining demand and sinking prices.
Today’s new Commodore should come with a free pair of asbestos gloves. Thick ones...
There are two ways to get burned on a new car. The most obvious is to pay too much when you’re buying, but the most insidious is to get violated by depreciation at trade-in time. The depreciation risk with a new Holden today is unacceptable.
2018 is shaping up to be an even less attractive 'annus' of a year than 2017 for Holden, despite the considerable angular momentum of the CBO and the extreme suction capacity of CarAdvice. That’s what the entrails are telling me. Do yourself a favour: Watch from the sidelines. Buy something else. It’ll be quite interesting, and a lot less painful.